The Millionaire Next Door: The Surprising Secrets of Americas Wealthy

by Thomas J. Stanley

GIVING PRECIPITATES MORE CONSUMPTION THAN SAVING AND INVESTING.

For example, affluent parents often subsidize their children’s purchase of a home. The intent may be to help their children “get started on the right foot.” The parents assume that such gifts are a once-in-a-lifetime phenomenon. Some have told us that they thought “this would be the last dollar the kids would ever need.” They assume that the recipients of their kindness will be able to “do it on their own” in the near future. Nearly half the time, they are wrong.

But observers who make such predictions overlooked the fundamental rule regarding wealth building. Whatever your income, always live below your means. Henry, in spite of his smaller salary, lives below his means. Josh, on the other hand, lives substantially above his income. In fact, Josh “really counts on that $10,000 from Dad and Mom to keep in balance.”

No matter how wealthy you are, teach your children discipline and frugality.

I have set up trusts for my children… some estate tax advantages. But my plan will not distribute money to my children until they are forty years of age or older.

They can take your business, but they can’t take your intellect! What does this mean? A government and/or a creditor can confiscate a business composed of land, machinery, coal pits, buildings, and so on. It can’t confiscate your intellect. What do professionals sell? Not coal, not paint, not even pizza. What they sell most of all is their intellect. Physicians, for example, can take their intellect anywhere in America. Their resources are quite portable. The same is true for dentists, attorneys, accountants, engineers, architects, veterinarians, and chiropractors. These are the occupations held by a disproportionate number of the sons and daughters of affluent couples throughout America.