I just got done reading a bunch of books by Thomas J. Stanley on millionaires. (They include: The Millionaire Next Door: The Surprising Secrets of America’s Wealthy, The Millionaire Mind, and Stop Acting Rich…And Start Living Like A Real Millionaire). Characteristics of them, mostly. It was super interesting (though I wouldn’t necessarily recommend reading several of his books back-to-back – it tends to get repetitive!)
Anyway, he had several points that I, in particular, found really interesting. One of the phrases that he used is that many people are “Big Hat, No Cattle”. It’s a Texan term, apparently, but easy to understand. It’s the concept that many people look like they’d have lots of cattle, but they don’t. Many people look like they are wealthy, but they aren’t.
They do things that they THINK wealthy people do. They buy things that they THINK wealthy people buy. They wear things that they THINK wealthy people wear. But, they themselves are not wealthy. And chances are, the things that they think wealthy people do, buy and wear aren’t really things that the truly wealthy do.
The typical/average/common millionaire has many different habits than they are stereotyped for. They don’t buy $10,000 watches, wear custom made suits, or even drive $50,000 cars. The chances are really high that they:
- Have their shoes re-soled instead of buying new ones.
- Drive a Toyota, not a Porsche.
- Spend $20 on their haircuts.
- Have a stay-at-home spouse (not part of a 2-income family).
- Have never inherited any money or won the lottery.
- Became millionaires in their 50s.
- Don’t work insane hours.
- Don’t own a boat or a vacation house.
Many people who want to be millionaires mistakenly think that real millionaires spend extravagantly. And since they want to be millionaires, they want to imitate them. But they’re doing many of the wrong things to get there. If they want to get there, they would do things much differently.
Millionaires buy cars that suit their lifestyle and that they consider good buys. A Porsche is not a good buy, but a Ford F150 is great for fishing on the weekends.
They might have high incomes (but typically not the highest incomes). A huge percentage of them own their own businesses, invest their money well (but don’t take huge risks on stocks; they tend to play it safe) and work hard, but not 80 hours a week insanity.
Instead, they make wise choices (compared to their incomes). Sure, they have more expensive watches, houses and cars than I have, but considering their income, they are not extravagant. They likely live in a neighborhood with people who aren’t nearly as wealthy as they are and their neighbors would have no idea. They buy suits that are on sale at Men’s Wearhouse, Kohl’s and JC Penney.
It was interesting reading to me. While there are millionaires that do spend lots of money, it’s not the norm. Those are exceptions rather than the rule.
I’ll share some more thoughts on it just cause I found it interesting. We’re not set to become millionaires or anything (that’s not even our desire)…I just found it really fascinating to think about.
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