Top 10 lessons learned from the book- The Millionaires Next Door

Stay in the same home for a long time.

Most millionaires stay in the same house for many years.

They live in affordable homes to save and invest more of their income.

The choice of a household and neighborhood has a great impact on the ability to create wealth.

Keep the same spouse

The majority of wealthy people are married to the same spouse.

Having a spouse with the right financial habits is crucial to building wealth.

A couple cannot accumulate wealth if one of the spouses is a hyper consumer.

Don’t drive their wealth away

Most millionaires own their cars and don’t lease them.

About 25% have a vehicle from the current year and another 25% have a vehicle that is four years old or older.

More than 33% have used cars.

Buying a luxurious car isn’t being rich.

Avoid Status Traps

A common obstacle to wealth is displaying a high-status lifestyle.

People who appear wealthy with fancy houses, clothes, and cars are not millionaires.

Millionaires are frugal and do not seek a status symbol but rather invest their money in assets.

Financially independent people tend to be happier

Financially independent people are happier than those who are not financially secure, with similar income and age groups.

There’s a peace of mind that comes from having money in the bank and investment accounts.

Budget

Most millionaires have a budget or ways to track their expenses.

Those who don’t budget practice what is called economic environmental scarcity, also referred to as paying yourself first.

Their priority is to invest a part of their income before they can spend it.

Differentiate income from wealth

Millionaires grow wealth faster outside of their income.

Society tends to think that getting rich is having a high income.

The reality is that income needs to be invested in assets in order to accumulate wealth.

Conscious about time and money.

Most millionaires use their time wisely. They tend to plan their investments and prioritize them before any activity.

There is a strong positive correlation between wealth accumulation and investment planning.

Rational

Millionaires are objective and do not let their emotions get in the way of their financial plan.

They do not overspend their money and focus on investing.

The motion of the market does not scare them, and they let their money work for them.

Work towards lifetime goals

67% of millionaires have defined goals that they pursue.

Whether it is starting a business, investing, creating wealth, or financial independence, they work toward an objective.