The Millionaire Mindby Wojciech Adam Koszek ⋅ May 15, 2013 ⋅ Menlo Park, CA
Very interesting take on the finances in the USA. Mentions approaches used by financially capable people to retain wealth. Interesting read.
Slightly updated version of the previous masterpiece.
My understanding from the book is that Stanley assisted by his friend picked 3000 households with net worth in range of $1M–$10M and got about 750 replies. Among them very pretty interesting notes..
..on how people from the group get their shoes repaired, instead of thrown away.
Some pretty interesting obvious stuff is mentioned in this book. For example: how a gentleman with no college made a very obvious statement: what sense does it make to enter a business with a lot of competition? Little. He entered niche business: selling used truck car parts. Sevenfold profit on each of the part.
His mechanic was earning similar salary to an MD (at the time of writing the book, I guess?).
The overall conclusion is that there’s no relationship between wealth and how person did at school. Most millionaire weren’t top performing students. Most of them were average.
All millionaires are very careful about picking partners. Physical appeal matters, but more important is how much support they get while doing risky stuff. There’s a “$100 startup” example mentioned too – husband decides to take the risk of not working full-time for some time, while the wife manages the home budget and supports the household with her salary. He fails for the 1st time, but succeeds the 2nd time and they’re done. Working wives help.
Looks like most of the wealthy people are family guys. Their free time they spend with their kids and families, not doing too much fancy stuff.
Most of them drive used cars and try to buy used things. Some inherited. If they decided to invest in physical stuff, it must be things of the highest quality. If it’s furniture, it’s either applied-art, or antic furniture kept in the family for a long time.
Most of the households are run very smartly. Without using credit cards or running over the limit. Most of them live below-their-means, without borrowing money.
Interesting point was describing how they actually acquire the real-estate properties. “If you’ve paid the asking price for a house, you’re not a millionaire”. Unless it’s a bargain deal, about which their lawyers and real-estate agents informed them. Most of them try to bid the lowest possible price, try to get the house from fore-closure, try to find two sellers and use one’s price to lower the price of the another one. Most of them try to haggle always.
Really enjoyed reading this book. Unless data is made up, author did an excellent research and huge amount of work to get a lot of statistics on wealth presented in a very friendly and readable manner.
I’d recommend to everybody interested in home finances.