The Millionaire Next Door: Are You One?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
IlliniDave
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Re: The Millionaire Next Door: Are You One?

Post by IlliniDave » Mon Jun 30, 2014 2:38 pm

1210sda wrote:
LateStarter1975 wrote:
Sidney wrote:
Grt2bOutdoors wrote:Not totally reliable, but if the said neighbor explicitly tells you they were given a gaggle of stock options in their company and you know the stock has appreciated considerably - well that is one indicator. The other indicator is vacation travel to places that cost $$$. Owning a Benz outright is considerably more costly than leasing. Sure they could have taken a loan out, but the loan will still term out and in the end they will still own it outright - the money has to come from some place. One of my neighbors owns 2 benz's and a cadillac - all 2005 models, I doubt he's leasing all three vehicles or even paying a loan on them after eight years, homes paid off and he's retired. Suffice to say, I think its a reasonable bet he's got wealth.
If he is spending his money on expensive vacations and cars, he may not have wealth.

That's how I would tend to see it
That's how I see it too.

I find It interesting that folks with "things" are viewed as wealthy and that they'll likely waltz into a very comfortable retirement.

The reality is that the higher the standard of living one has in their pre-retirement life (relative to income) the more difficult it will be to duplicate in in retirement.

1210
I also find it interesting that folks with "things" are viewed as happy and that they will likely waltz into death with a great deal of satisfaction that will necessarily elude someone with a material horde that's a little less copious.
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Re: The Millionaire Next Door: Are You One?

Post by lululu » Mon Jun 30, 2014 2:44 pm

I can't tell current cars apart. If it's not an old classic, I have no idea whether it's new or decades old.

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NAVigator
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Re: The Millionaire Next Door: Are You One?

Post by NAVigator » Mon Jun 30, 2014 2:58 pm

I agree with nchowrin, that another motivation for saving is that life sometimes throws you a curve and sometimes twice! Like him, I was also working as a software engineer at a megacorp and much of my department was laid off when our jobs went to a cheaper labor source in another country. I was 51 with my house paid for. I watched friends lose their homes, took meaningless jobs, etc. I got a job after 18 months. I worked for a few years when I got another curve thrown at me; a serious medical condition. Suddenly I was disabled at 56. Having financial security is immensely satisfying so you can focus on other priorities.
TimeRunner wrote:"The Millionaire Next Door" was written in 1996. Inflation from Dec 1996 through May 2014 is about 50%, so you should be asking if you are the $1.5M next door neighbor. :mrgreen:
Indeed! One must adjust for inflation and that is a good figure. I don't include my home because that is an asset you can't spend.

Like others have stated, it is important to have a fun life while you are young. True, because you never know when you might not be able to travel. I have enjoyed many nice trips, and I even bought the T-shirts.

Pay your self first, make it affordable by spending less than you make, start early, invest wisely. It is a simple process that works! Like HomerJ, it helps to eat PB&J, ham, and turkey sandwiches at your desk. I did and still socialized and made friends at work.

When you personalize your lifestyle to achieve your goals, it is gratifying when you succeed. Like Taylor often says, there are many roads to Dublin.
"I was born with nothing and I have most of it left."

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Re: The Millionaire Next Door: Are You One?

Post by The Wizard » Mon Jun 30, 2014 3:00 pm

I actually read The Millionaire Next Door book a year ago.
I recall it being rather repetitious and annoying.
The author whines about pretenders who TRY to appear rich by purchasing upscale vodkas and BMWs, which they buy over time or lease, not with cash.
Whereas the ACTUAL rich folk tend to underspend, buying cheaper vodka and utilitarian cars.
He says all this about six times.

Apparently there are people out there who try to impress others with their purchases; that's the take-away I got from the book...
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Re: The Millionaire Next Door: Are You One?

Post by investor1 » Mon Jun 30, 2014 3:08 pm

No, I'm not a millionaire. I also don't live next door. My neighbors do.
Yes, I do live below my means.
No, I don't generally do anything to attempt to keep up with the Jones or the Smiths or the Rodriguezs, etc.

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kenyan
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Re: The Millionaire Next Door: Are You One?

Post by kenyan » Mon Jun 30, 2014 3:18 pm

I'm not (yet) by either 2 comma status or PAW status, but the formulas used in the book are extremely unfriendly to younger people (which I believe the author has acknowledged). Not easy to accumulate many multiples of one's income when one has only earned - gross - a few multiples of said income and only had a few years to allow it to grow. I finished school at 27, with 2.5 years of career work experience by the time I hit 30. A PAW at 30 needs to have 3 * 2 * Income = 6 times income accumulated. Needless to say, I did not make that milestone. I am now 36, with 8.5 years of experience, but require 7.2* Income saved to be a PAW. 7.2 times my current income is greater than my gross lifetime earned income, and much greater than my net lifetime earned income. Now, eventually it's certainly possible to have more saved than either of those numbers, but that requires a bit of time for compounding to work.

Now, we are Bogleheads, and certainly live below our means, but do not practice first-world privation. My friends do think I'm cheap, though, so maybe they wouldn't be too surprised if they knew our net worth.
Retirement investing is a marathon.

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Re: The Millionaire Next Door: Are You One?

Post by placeholder » Mon Jun 30, 2014 3:38 pm

1210sda wrote:If only we knew how long that "one life" would last. (and how bad inflation would get and how much medical care we would need and......)
Sure because part of the savings are to handle the unknowns like stays in assisted care or whatever plus if I die leaving a nice bit of money to my siblings I DON'T consider that to be money that was "wasted" and to be clear I don't deprive myself to save I just generally don't want most things.

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Re: The Millionaire Next Door: Are You One?

Post by Grt2bOutdoors » Mon Jun 30, 2014 3:51 pm

1210sda wrote:
LateStarter1975 wrote:
Sidney wrote:
Grt2bOutdoors wrote:Not totally reliable, but if the said neighbor explicitly tells you they were given a gaggle of stock options in their company and you know the stock has appreciated considerably - well that is one indicator. The other indicator is vacation travel to places that cost $$$. Owning a Benz outright is considerably more costly than leasing. Sure they could have taken a loan out, but the loan will still term out and in the end they will still own it outright - the money has to come from some place. One of my neighbors owns 2 benz's and a cadillac - all 2005 models, I doubt he's leasing all three vehicles or even paying a loan on them after eight years, homes paid off and he's retired. Suffice to say, I think its a reasonable bet he's got wealth.
If he is spending his money on expensive vacations and cars, he may not have wealth.

That's how I would tend to see it
That's how I see it too.

I find It interesting that folks with "things" are viewed as wealthy and that they'll likely waltz into a very comfortable retirement.

The reality is that the higher the standard of living one has in their pre-retirement life (relative to income) the more difficult it will be to duplicate in in retirement.

1210

Then I recommend a re-read - this neighbor I speak about is retired, not only does he own 2 benz's and a Cadillac, but he's made very costly capital improvements to his home over the last 5 years (I know because I've seen the workmen come and go and the home looks much better) and travels to far away locales and that costs $$ to do so. The reality is for this particular individual they are living the same if not better standard of living in retirement, not that their standard of living prior to retirement was meager by any means. He is TMND.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: The Millionaire Next Door: Are You One?

Post by kaudrey » Mon Jun 30, 2014 4:14 pm

gouldnm wrote:I drive a 1999 Toyota Camry. I could easily afford a new car, and yet somehow, I just can't bring myself to buy a new car when my old one seems to be running fine. At this point it's become like a badge of pride that I drive an older car. I look around at all the people around me driving newer and/or more expensive cars, and I get a certain amount of satisfaction knowing that:

I'm like a textbook example of the "millionaire next door". I just wonder how many other people out there are in this situation where they live well below their means, and people have absolutely no clue how much they're actually worth?
I drive a Saturn (although my DH has a new BMW Motorcycle); and we live in the same townhouse I bought 15 years ago. We travel and enjoy good restaurant meals (on occasion), but I doubt any one would guess our portfolio crossed the million dollar mark last year. Many of our neighbors drive fancier cars than my lowly Saturn (which I actually hate, but can't bring myself to get rid of it yet - it is a 2008 with 90K miles. Maybe next year...)

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Re: The Millionaire Next Door: Are You One?

Post by HomerJ » Mon Jun 30, 2014 5:22 pm

The Wizard wrote:I actually read The Millionaire Next Door book a year ago.
I recall it being rather repetitious and annoying.
The author whines about pretenders who TRY to appear rich by purchasing upscale vodkas and BMWs, which they buy over time or lease, not with cash.
Whereas the ACTUAL rich folk tend to underspend, buying cheaper vodka and utilitarian cars.
He says all this about six times.

Apparently there are people out there who try to impress others with their purchases; that's the take-away I got from the book...
That was his new book, and it was boring, and it did mention vodkas and cars multiple times...

The old book Millionaire Next Door was much more interesting. It had a lot more "case studies" which are much more fun to read. Dr. North and Dr. South, and the two brothers, one who was a lawyer, and one who was a teacher.

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Re: The Millionaire Next Door: Are You One?

Post by bs010101 » Mon Jun 30, 2014 7:22 pm

We bought a big house, which was our biggest step in the wrong direction from the MND perspective (and I had read the book before buying, but liked the house!) On the other hand, we are pretty frugal with everything else, driving two inexpensive paid for cars, taking local vacations, etc. So I'm not really sure what people think. Our wealth accumulation score is 1.17 (net worth / ((age/10) * income))), so I guess we are squarely in the average category, though net worth is over $1MM.

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HomerJ
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Re: The Millionaire Next Door: Are You One?

Post by HomerJ » Mon Jun 30, 2014 7:38 pm

bs010101 wrote:Our wealth accumulation score is 1.17 (net worth / ((age/10) * income))), so I guess we are squarely in the average category, though net worth is over $1MM.
Take that "wealth accumulation score" with a grain of salt.. Basing anything on your income TODAY gives funky results...

You could make $70k a year for 5 years, save a ton, get a promotion to $100k, and suddenly, you're not a good saver...

Or like my wife and I... Together we were making $250k a year ago, now she's retired, and I make $115k... Did we suddenly become amazing savers? Our ratio went WAY up.... That ratio seems to show that we are much better off, now that we're making a lot less. :confused

What it should be is <Expected expenses in retirement> not <income>

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Re: The Millionaire Next Door: Are You One?

Post by baw703916 » Mon Jun 30, 2014 8:08 pm

staythecourse wrote: As much as we like to believe different bogleheads are human. Like every other human we tend to want acceptance from others that we "belong" and want positive reinforcement of their actions. In the real world most try to get that through material objects. Here at bogleheads we get that through finding other LBYM mentality folks. For some it is helpful because it reinforces their actions.
This is something that bothers me about this board sometimes. I dislike both the keeping up with the Joneses mentality regarding material things and trying to outdo each other in terms of savings rate, net worth, etc. I see both of them as detrimental to achieving good personal finance practices. I could elaborate a little more, but it's probably best done in a separate thread in a different section.
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amitb00
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Re: The Millionaire Next Door: Are You One?

Post by amitb00 » Mon Jun 30, 2014 8:17 pm

Interesting thread. I have no idea about the financial status of my neighbors.

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Re: The Millionaire Next Door: Are You One?

Post by Schu » Mon Jun 30, 2014 9:09 pm

No, I'm not a MND. All I know and care about is that I'm doing okay for me. As a 30 Rock fan, I understood very well in my own way when Jack Donaghy said "Money can't buy happiness. It is happiness."

Others disagree. They are right, too.

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Re: The Millionaire Next Door: Are You One?

Post by IlliniDave » Mon Jun 30, 2014 9:43 pm

baw703916 wrote:
staythecourse wrote: As much as we like to believe different bogleheads are human. Like every other human we tend to want acceptance from others that we "belong" and want positive reinforcement of their actions. In the real world most try to get that through material objects. Here at bogleheads we get that through finding other LBYM mentality folks. For some it is helpful because it reinforces their actions.
This is something that bothers me about this board sometimes. I dislike both the keeping up with the Joneses mentality regarding material things and trying to outdo each other in terms of savings rate, net worth, etc. I see both of them as detrimental to achieving good personal finance practices. I could elaborate a little more, but it's probably best done in a separate thread in a different section.
I guess I don't see much of that on either side of the ledger when I read here. People ask questions and people answer honestly. I know in my case I really don't care if my savings rate is lower or higher than the next Boglehead. I do the best I can to meet my goals and live the life I want to live. I enjoy hearing about how other people meet their goals, be it buying a yacht, a million dollar house, or turning a modest salary into multimillion dollar portfolio to change both their own lives and maybe that of their descendants. That people are proud of accomplishing what they want out of life is a good thing, even when it's different than what I want to achieve. In my opinion it's incumbent on the reader to take things for what they are and not let themselves get derailed every time they encounter someone who has a different outlook and a different set of goals. That shouldn't be perceived as a threat. Some people can spend very little money and have a high degree of material contentment along with an aggressive savings rate while another person can buy a new luxury vehicle every three years while still handling their overall finances in a very prudent manner. Many roads to Dublin, and all that.
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Re: The Millionaire Next Door: Are You One?

Post by Nestegg_User » Mon Jun 30, 2014 9:47 pm

rec7 wrote:
livesoft wrote:All my neighbors are multimillionaires, but I have no clue to their actual net worth. It could be as low as $2 million and probably as high as $30 million. I just don't know.

Some do drive Camrys and Civics, etc. But others drive other vehicles.
Sounds like a nice place Livesoft. Where I live I would says it can be quiet a walk between millionaires for the most part. Someone with two million would be a very long walk.
Maybe in the city (except along, say, Lindell), and in North or South county....but in West County, where I'm at...(and not talking Huntleigh, Ladue, Country Life Acres, etc.) there's probably quite a few .. and, yes, some would likely be several $M.
[we even qualify at nearly two (edited, yea ! :) )...I usually only consider available funds (taxable, IRA's, 401k's, etc toward "two-comma"-dom. and I thought the formula was going to be hard to beat, but even at current earnings we are above (are PAW) but we do use the funds as we need some balance]
Last edited by Nestegg_User on Tue Jul 22, 2014 7:46 pm, edited 1 time in total.

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Re: The Millionaire Next Door: Are You One?

Post by investingdad » Tue Jul 01, 2014 6:18 am

baw703916 wrote:
staythecourse wrote: As much as we like to believe different bogleheads are human. Like every other human we tend to want acceptance from others that we "belong" and want positive reinforcement of their actions. In the real world most try to get that through material objects. Here at bogleheads we get that through finding other LBYM mentality folks. For some it is helpful because it reinforces their actions.
This is something that bothers me about this board sometimes. I dislike both the keeping up with the Joneses mentality regarding material things and trying to outdo each other in terms of savings rate, net worth, etc. I see both of them as detrimental to achieving good personal finance practices. I could elaborate a little more, but it's probably best done in a separate thread in a different section.
I think what you're seeing is folks that managed to get to a good place financially in a way that bucks the trend of the general population. As far as I know, the people here are not, generally, highly paid CEO or athlete type millionaires...but grind it out with college degree (I generalize) type millionaires (when they reach that goal). Granted, I speak from my own experience.

Since the general population lumps all people together that have achieved higher levels of financial success and assumes most of them are elitists mega millionaires that ought to be taxed into oblivion, refusing to stop and look at how many of them got to where they are, this forum is one place where said people can share their successes w/o getting dumped on or blasted. And so you get a lot of folks that want to share how they're doing because there are few other avenues to do so. Again, that's my take on it.

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Re: The Millionaire Next Door: Are You One?

Post by scrabbler1 » Tue Jul 01, 2014 7:44 am

I hit the $1M mark in investments a few years ago after getting close to it in 2007 before the markets crashed. I live in a studio apartment in a large co-op complex and have been here for 25 years. It is mostly an older crowd with many elderly retirees. Some of my neighbors know that I am an early retiree (I am 51 now, been retired since 2008) so they know I have to have some money in order to have achieved that. But I surely don't look like a MND and don't drive an expensive car. In our parking garage, my 2007 Corolla fits in with the other 23 cars, as there are several other Corollas which look like mine. Some residents have bigger, costlier cars (which is tough in a garage with cramped parking spots) while others do not. I don't dress like a total slob but I wear decent, casual clothes as I do my daily activities. I'm just one of the ~60 apartment owners in my building and ~225 in the complex.

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Re: The Millionaire Next Door: Are You One?

Post by laughlinlvr » Tue Jul 01, 2014 9:28 am

Clark Howard went to an elementary school to talk to kindergartners about money. One of the questions he asked the children was: "What makes a person rich?" The kids were shouting out answers: "jewelry!", "swimming pool!", "mansion", etc... Clark just laughed, then told them: "No. Those are the things that make a person poor."
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Re: The Millionaire Next Door: Are You One?

Post by gouldnm » Tue Jul 01, 2014 1:14 pm

John151 wrote:I'm in the club too. I'm single, I'm retired, I drive an older car, I live in a modest condo, and I spend only one percent of my assets a year. Sometimes I think, "I really should spend more of this money. It's not doing me any good just sitting there." But then I can't figure out what to spend it on. I like my car, I like my condo, and I have a strong sense of security knowing that the money is there if I need it. When I'm gone, my charities will be pleasantly surprised.
Hi, John, OP here.

This is exactly how I feel. I just can't figure out what to spend my money on. My job is too demanding to take lengthy vacations--maybe when I retire. I'm not into designer clothing (yes, I'm female). I do enjoy going out to eat at nice restaurants, but there's only so much fine dining one can take without getting sick of rich food. I have absolutely zero interest in expensive toys or fancy cars. My life is about friends and community. I grew up in a small town in the midwest, the child of parents who'd survived the Great Depression, so let's just say that I have simple tastes.

I don't need a big house, but someday I would love to retire and live in a condo in a big city close to big-city-type amentities. Maybe that's what I'll spend my money on, although even then, I don't need a LARGE condo.

Maybe I'll leave it all to my cats.

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Re: The Millionaire Next Door: Are You One?

Post by letsgobobby » Tue Jul 01, 2014 1:17 pm

gouldnm wrote:
John151 wrote:I'm in the club too. I'm single, I'm retired, I drive an older car, I live in a modest condo, and I spend only one percent of my assets a year. Sometimes I think, "I really should spend more of this money. It's not doing me any good just sitting there." But then I can't figure out what to spend it on. I like my car, I like my condo, and I have a strong sense of security knowing that the money is there if I need it. When I'm gone, my charities will be pleasantly surprised.
Hi, John, OP here.

This is exactly how I feel. I just can't figure out what to spend my money on. My job is too demanding to take lengthy vacations--maybe when I retire. I'm not into designer clothing (yes, I'm female). I do enjoy going out to eat at nice restaurants, but there's only so much fine dining one can take without getting sick of rich food. I have absolutely zero interest in expensive toys or fancy cars. My life is about friends and community. I grew up in a small town in the midwest, the child of parents who'd survived the Great Depression, so let's just say that I have simple tastes.

I don't need a big house, but someday I would love to retire and live in a condo in a big city close to big-city-type amentities. Maybe that's what I'll spend my money on, although even then, I don't need a LARGE condo.

Maybe I'll leave it all to my cats.
without kids or a spouse, I can understand why it'd be hard to find ways to spend your money. with, it seems I have little difficulty. :oops:

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Re: The Millionaire Next Door: Are You One?

Post by mojave » Tue Jul 01, 2014 1:41 pm

In our group of friends we are but not millionaires. We are the highest earners of our friends, I know this because I know my girlfriends' incomes and I know their husbands' incomes are well below my husband's because of the careers they have. All of them have pets or/and kids, and own townhomes or homes that are underwater. We are renting an apartment with two vehicles paid off (although we had to get a commuter car for my husband), while they talk about getting new cars. We have several retirement accounts, I don't think our friends have retirement options with their jobs and most people in their 20s are pushing retirement off. It's a nice feeling for sure.

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Re: The Millionaire Next Door: Are You One?

Post by dumbbunny » Tue Jul 01, 2014 1:44 pm

gouldnm wrote:Thanks to being a boglehead all these years, I'm worth a lot more than most of my peers, but THEY HAVE ABSOLUTELY NO IDEA.
Money changes everything. My DW doesn't know. The only person who knows I'm a MND is my Vanguard Flagship representative.
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Re: The Millionaire Next Door: Are You One?

Post by abuss368 » Tue Jul 01, 2014 2:30 pm

One of the best books I ever read!
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: The Millionaire Next Door: Are You One?

Post by truenorth418 » Tue Jul 01, 2014 9:01 pm

"The Millionaire Next Door" was the inspiration that led me to finally put together a plan that ultimately took me to financial independence and early retirement. That book changed my life.

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Re: The Millionaire Next Door: Are You One?

Post by The Wizard » Tue Jul 01, 2014 9:05 pm

Peterjens wrote:
gouldnm wrote:Thanks to being a boglehead all these years, I'm worth a lot more than most of my peers, but THEY HAVE ABSOLUTELY NO IDEA.
Money changes everything. My DW doesn't know. The only person who knows I'm a MND is my Vanguard Flagship representative.
No offense, but how does gouldnm know the net worth of most of her peers?
Do they post it on their mailbox or office door or something?
This is not something I've ever been concerned with myself...
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Re: The Millionaire Next Door: Are You One?

Post by gouldnm » Tue Jul 01, 2014 10:20 pm

The Wizard wrote:
Peterjens wrote:
gouldnm wrote:Thanks to being a boglehead all these years, I'm worth a lot more than most of my peers, but THEY HAVE ABSOLUTELY NO IDEA.
Money changes everything. My DW doesn't know. The only person who knows I'm a MND is my Vanguard Flagship representative.
No offense, but how does gouldnm know the net worth of most of her peers?
Do they post it on their mailbox or office door or something?
This is not something I've ever been concerned with myself...
Well, I suppose my townhome development could be made up entirely of MNDs, but I doubt it. Ditto for all the mid-level government employees that I work with.

I don't know their exact net worth, but I listen to them talk about the debt they have or their worries about retiring. Usually when those kinds of conversations come up, I listen quietly and nod sympathetically. I don't say anything because I don't have those problems, and I don't want to make them feel bad.

I sometimes try to tell the younger people about bogleheads, but only if they seem like they're seriously interested in learning about investing. As soon as they start talking about picking individual stocks, I just completely tune out.
Last edited by gouldnm on Tue Jul 01, 2014 10:40 pm, edited 2 times in total.

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Re: The Millionaire Next Door: Are You One?

Post by ClevrChico » Tue Jul 01, 2014 10:27 pm

It sounds like us a lot! :-)


At our neighborhood park, I'll run into a neighbor, and try to be friendly. There's a few 20 somethings that appear to be pained to even say hello. I just chuckle to myself because they have no clue of our net worth. I think my beater shoes and lawn mowing jeans are good net worth camouflage. I'm guessing their net worth is less than zero.

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Re: The Millionaire Next Door: Are You One?

Post by jidina80 » Tue Jul 01, 2014 11:03 pm

I live relatively modestly compared to what I can afford, but I think my friends and former-coworkers have a pretty good idea of my financial situation. I retired seven years ago in my early fifties. That's a big clue.

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Re: The Millionaire Next Door: Are You One?

Post by lululu » Wed Jul 02, 2014 4:57 am

ClevrChico wrote:It sounds like us a lot! :-)
At our neighborhood park, I'll run into a neighbor, and try to be friendly. There's a few 20 somethings that appear to be pained to even say hello. I just chuckle to myself because they have no clue of our net worth. I think my beater shoes and lawn mowing jeans are good net worth camouflage. I'm guessing their net worth is less than zero.
It's amazing how people judge by clothes. I wear what's comfortable, and I'm not about to throw out a perfectly good sweatshirt just because the cuffs are frayed.

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Re: The Millionaire Next Door: Are You One?

Post by Chan_va » Wed Jul 02, 2014 5:42 am

lululu wrote:It's amazing how people judge by clothes. I wear what's comfortable, and I'm not about to throw out a perfectly good sweatshirt just because the cuffs are frayed.
Making snap judgments based on fleeting visual cues is hardwired into our DNA by billions of years of evolution. When you are a deer, and you spot something yellow with stripes, you don't stop to check if it's a tiger or the LSU mascot. You run.

Wearing worn sweatshirts is your prerogative, just don't be insulted or surprised when you are treated worse than someone snazzily dressed.

madbrain
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Re: The Millionaire Next Door: Are You One?

Post by madbrain » Wed Jul 02, 2014 5:54 am

Definitely not, anyone can tell from my home that I'm a millionaire.

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Re: The Millionaire Next Door: Are You One?

Post by lululu » Wed Jul 02, 2014 6:09 am

Chan_va wrote:
lululu wrote:It's amazing how people judge by clothes. I wear what's comfortable, and I'm not about to throw out a perfectly good sweatshirt just because the cuffs are frayed.
Making snap judgments based on fleeting visual cues is hardwired into our DNA by billions of years of evolution. When you are a deer, and you spot something yellow with stripes, you don't stop to check if it's a tiger or the LSU mascot. You run.

Wearing worn sweatshirts is your prerogative, just don't be insulted or surprised when you are treated worse than someone snazzily dressed.
I'm not insulted. It just makes me think the person making that snap judgment is not too smart.

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Re: The Millionaire Next Door: Are You One?

Post by freddie » Wed Jul 02, 2014 7:34 am

What do you think about the snap judgements that people make when they see someone driving a BMW and they say that person must be in debt?:) People make snap judgements all the time. The smart ones adjust when then evidence suggests otherwise.
lululu wrote:
Chan_va wrote:
lululu wrote:It's amazing how people judge by clothes. I wear what's comfortable, and I'm not about to throw out a perfectly good sweatshirt just because the cuffs are frayed.
Making snap judgments based on fleeting visual cues is hardwired into our DNA by billions of years of evolution. When you are a deer, and you spot something yellow with stripes, you don't stop to check if it's a tiger or the LSU mascot. You run.

Wearing worn sweatshirts is your prerogative, just don't be insulted or surprised when you are treated worse than someone snazzily dressed.
I'm not insulted. It just makes me think the person making that snap judgment is not too smart.

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Re: The Millionaire Next Door: Are You One?

Post by scrabbler1 » Wed Jul 02, 2014 7:42 am

jidina80 wrote:I live relatively modestly compared to what I can afford, but I think my friends and former-coworkers have a pretty good idea of my financial situation. I retired seven years ago in my early fifties. That's a big clue.
I still have the group card many of my coworkers signed when I retired in late 2008. There were a lot of well-wishes and some friendly jealousy. Whenever one of them asked me how I could retire at 45, I would tell them I have the money and don't need to work any more. I was working only 2 days a week at the time and had been working no more than 20 hours a week for the last 7 years so they knew I was not earning a lot of money through salary. They had a good idea I was loaded.

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Re: The Millionaire Next Door: Are You One?

Post by RadAudit » Wed Jul 02, 2014 7:48 am

freddie wrote:What do you think about the snap judgements that people make when they see someone driving a BMW
I think the individual hasn't read Consumers Report on the car's probable maintenance history.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

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Re: The Millionaire Next Door: Are You One?

Post by freddie » Wed Jul 02, 2014 8:20 am

See another snap judgement:)
RadAudit wrote:
freddie wrote:What do you think about the snap judgements that people make when they see someone driving a BMW
I think the individual hasn't read Consumers Report on the car's probable maintenance history.

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TheTimeLord
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Re: The Millionaire Next Door: Are You One?

Post by TheTimeLord » Wed Jul 02, 2014 8:28 am

jidina80 wrote:I live relatively modestly compared to what I can afford, but I think my friends and former-coworkers have a pretty good idea of my financial situation. I retired seven years ago in my early fifties. That's a big clue.
If a co-woorker retires, even in his 50s, it seems listening to them it is because they are fed up not set for life or they just have something else they want to do. I managed a guy for 3 years who told everyone as soon as he could afford he was retiring to his weekend lake house. Not once did it ever occur to me that he was set for life but in retrospect he probably was doing pretty well once you throw in SS and his pension. I didn't think much about it because that didn't fir my idea of a nice retirement but it wasn't my retirement.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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Re: The Millionaire Next Door: Are You One?

Post by TheTimeLord » Wed Jul 02, 2014 8:29 am

RadAudit wrote:
freddie wrote:What do you think about the snap judgements that people make when they see someone driving a BMW
I think the individual hasn't read Consumers Report on the car's probable maintenance history.
WOW.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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Re: The Millionaire Next Door: Are You One?

Post by pennstater2005 » Wed Jul 02, 2014 8:34 am

I am the Thousandaire next door :D
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson

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Re: The Millionaire Next Door: Are You One?

Post by Boglegrappler » Wed Jul 02, 2014 8:36 am

That people are proud of accomplishing what they want out of life is a good thing, even when it's different than what I want to achieve. In my opinion it's incumbent on the reader to take things for what they are and not let themselves get derailed every time they encounter someone who has a different outlook and a different set of goals. That shouldn't be perceived as a threat.
I think this is quite true.....with one proviso. There seem to more than a few people around whose goals are for themselves to reach their goals, and to thwart others from reaching theirs (not so much on this board, of course). But as long as other people's goals don't involve using my income and assets to achieve theirs, I'm all for it. If they do, then I'm watching carefully.

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Re: The Millionaire Next Door: Are You One?

Post by RadAudit » Wed Jul 02, 2014 8:58 am

freddie wrote:See another snap judgement:)
RadAudit wrote:
freddie wrote:What do you think about the snap judgements that people make when they see someone driving a BMW
I think the individual hasn't read Consumers Report on the car's probable maintenance history.
freddie, I'm sorry. I misread the question. Obviously, that's what I think when I see someone driving a BMW.

What I think about the snap judgments when they see people driving a BMW runs to reduction of cognitive dissonance - or something like that if I remember the term correctly from 45 years ago.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

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Re: The Millionaire Next Door: Are You One?

Post by vested1 » Wed Jul 02, 2014 9:33 am

Almost everyone, including my kids think I'm "cheap" because we don't splurge. We have 3 cars, 2007 Toyota, 2003 Toyota, 2000 GMC truck, all paid for long ago. Chances are we'll keep the cars until the wheels fall off. I don't care what the neighbors think, and avoid sharing financial status with my children to forestall overblown expectations, which keeps their heads screwed on straight. I try not to judge others by making assumptions. I only wish that attitude was more prevalent.

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Re: The Millionaire Next Door: Are You One?

Post by 1210sda » Wed Jul 02, 2014 5:17 pm

Grt2bOutdoors wrote:
Then I recommend a re-read - this neighbor I speak about is retired, not only does he own 2 benz's and a Cadillac, but he's made very costly capital improvements to his home over the last 5 years (I know because I've seen the workmen come and go and the home looks much better) and travels to far away locales and that costs $$ to do so. The reality is for this particular individual they are living the same if not better standard of living in retirement, not that their standard of living prior to retirement was meager by any means. He is TMND.
What do you think I missed when I read the book?

Could you be so kind as to provide references and page numbers ?

1210

TRC
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Re: The Millionaire Next Door: Are You One?

Post by TRC » Wed Jul 02, 2014 8:27 pm

Not really. We drive nice cars and have nice things. But our portfolio is big for our age. Best of both worlds!

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Re: The Millionaire Next Door: Are You One?

Post by Rajsx » Wed Jul 02, 2014 8:59 pm

I think some habits die hard, habits to spend less when you can get just about the same product, and there is marginal utility of money...i.e. say for ex...when you can get 90% of driving as a function of driving a Ferari by driving a Camry, then that 10% more function/pleasure is not a good value when you have to spend many multiple times of money what one would spend for a Camry.

The habits/thinking acquired when you are accumulating/striving for financial independence, is difficult to break out of when you have reached the destination, I suffer/struggle with that like any other boglehead.
After accumulating a few millions I and DW still have the same set ways of spending money of a middle class family, exactly the same way when we started this journey together, raised 2 kids and presently are empty nesters. We keep talking, laughing and wondering about how and who will spend this amount of money after we leave this planet. So I do not know whether it is good thing or bad, but it is what it is.

I still go to the same reasonable charging mechanic down the street for all car maintenance, when I can go the Dealership and pay more for the same service, I still buy cash late model used cars because that practice has served us well, frequent the same comfortable eating places and even after reaching most of our financial goals the money not spent still gets saved at the end of the month although the thought keeps occurring at the back of our mind what for?? and why??. even after spending for gifts and charity .

So, the same habits which brought us to this point remain with us. Any deviation from that is an effort, it is a little uneasy, it is a bit foreign to us.
We do not stop laughing because we grow old, we grow old because we stop laughing !!

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Re: The Millionaire Next Door: Are You One?

Post by lululu » Wed Jul 02, 2014 10:47 pm

Rajsx wrote:We keep talking, laughing and wondering about how and who will spend this amount of money after we leave this planet.
Besides leaving it to the kids, consider leaving a portion to some charity whose work you're interested in. Any slice of multiple millions can do a lot of good.

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Re: The Millionaire Next Door: Are You One?

Post by baw703916 » Wed Jul 02, 2014 11:16 pm

A good Boglehead would never inform the neighbors as to MND status without first verifying adequate umbrella policy coverage.
Most of my posts assume no behavioral errors.

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Re: The Millionaire Next Door: Are You One?

Post by TheTimeLord » Thu Jul 03, 2014 8:33 am

Rajsx wrote:I think some habits die hard, habits to spend less when you can get just about the same product, and there is marginal utility of money...i.e. say for ex...when you can get 90% of driving as a function of driving a Ferari by driving a Camry, then that 10% more function/pleasure is not a good value when you have to spend many multiple times of money what one would spend for a Camry.
Okay, I get Camry vs. Ferrari but what about an Avalon or an 350 ES? Surely you will keep the car at least 10 years with your habits so pay the extra $10K and enjoy the ride a little more.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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