Book: 20210420 to 20210504, "The Millionaire Next Door" by Tom Stanley and William Danko

20210420 - 1. Meet the millionaire next door

When the book was published in 1996, "the millionaire" was defined as the one/family own between one million  to ten million USD.

If the annual growth rate is 5%, convert to AUD today(2021), it's around 5 million to 50 million AUD.

Most of the millionaires hide in crowd.

We will learn, for most of the people, how to become a millionaire.

It may take many years, but it's possible.

If 10% of England people migrated to America, but only 0.01% of Russian migrated to America, it's safe to assume that those Russian were more aggressive and willing to pay more to live better than those England people. But after a few generations, their heirs should all adapted to the environment, and are all similar. Then it's more about the new first generation immigrants.

20210422 - 2. Frugal, frugal, frugal

Frugal is the first common characters most of the millionaires share.

No matter the first generation or their heirs, if they want to keep their wealth, they have to learn to live in frugal lives.

What is frugal? Frugal means don't waste money. Apart from the necessities of life, we should invest as much as possible.

Starting from the second generation, most of the heirs cannot be as frugal as their parents. They often spend too much to "enjoy" lives. Maybe this is the reason that why it is so hard to transfer the wealth to the next generation.

Purchasing unnecessary goods and services normally only bring us temporary happiness. It doesn't help with our long term goal.

Both the couple need to feel happy about their frugal life style.

20210424 - 3. Time, energy, and money

PAW and UAW have different preferences.

PAW live below their means, and invest carefully. They understand the luxury goods and items don't help with our long term goal. PAW is cautious about how to spend their time.

20210426 - 4. You aren't what you drive

Many goods are services only give us illusion about our lives.

Expensive cars and clothes don't make our lives more meaningful.

Second hand car and other goods are often as good as brand new one.

To live in frugal, we need to break the illusion of modern "elegant" life style.

For example, exercise at home is often as good as going to gym. Oversea travel doesn't make us wiser.

20210428 - 5. Economic outpatient care

Independent children is a must to get rich and keep the wealth.

This means, the adult children need to understand the meaning of wealth, and the long term benefit of frugal life. They need to make enough money to support their life style, and keep invest.

They need to think more about their long term goal, and avoid getting lost in short term happiness.

They need to focus on improving themselves.

The wealth passed to the next generation is not that important, at least not as important as it looks like. So I think it's better to keep it simple. Let the children get same size of pie, can encourage them to pay more attention on their own growth, instead of the pie from parents.

20210430 - 6. Affirmative action, family style

We need to educate and encourage our children to focus on long term goal. To do that, we have to respect them. They are independent individuals. They need to experience pain and failures to grow.

Money is not that important, if we have enough to meet basic needs.

How to help our children? It's not much about money. Good education is necessary, parents' life style is also a good example. If the parents love reading and live in frugal, then their children would be more likely to love reading and live in frugal.

20210502 - 7. Find your niche

Most of people are good at something. We need to choose the right career to suit ourselves and environment, and making good money.

We don't have to be entrepreneur or small business owner. If we choose to be an employee, then first we need to choose the company which has huge growth potential, then we can choose what type of extra responsibilities we want to take to learn and grow.

Environment is also important. Which place(country, city, suburb, etc.) we should stay?

When the book was published in 1996, there is no Internet. 25 years later (2021), Internet gives us all resources we need to study by ourselves. The demand of a lot of services dropped a lot, such as handy man legal services, financial services and even medical services. That changed the job market.

Only the one who is good at problem solving and good perception of the world can take better position, and have good income/investment profit.

20210504 - 8. Jobs: millionaires versus heirs.

No job can guarantee high income. But problem solving capabilities is always the key.

Seven levels of knowledge: spirit, identity, perception, capabilities, behave, environment.

Problem solving belongs to level 4: capabilities.

But the critical question is, how to find the right problem.

That needs right perception, and a lot of verification. This means, read and practice.

Always focus on long term goal to make sure we are moving forward.

20210509 - PS

How much wealth is enough? If I have got enough money, is it stupid to keep thinking about "more money"? What's the point of getting super rich? Is private jet really so important?

I need meditation, but I want more and more money.