How to Become a Millionaire-The Simple Truth
Originally Written by Nickel
Author Nickel is the founder and editor-in-chief of the site
fivecentnickel.com-Because Money Matters.
I am sharing this post, How to Become a Millionaire-The Simple Truth with you.
I am trusting that it caught your interest.
Have you ever thought about your own attitude towards becoming a millionaire?
The author, wrote, “a week or so ago, I shared some tips from…
Warren Buffett about how to become a millionaire.
Today, I wanted to share some tips from our eight year old.”
The story follows…
“This weekend, I had an interesting financial conversation with our eight year old.
This is the same kid that has an impressive knack for saving.
To set the scene, we were tooling around town when the subject of cars came up…
As we pulled up to a stoplight, a particularly sweet ride rolled by.
As soon as they spotted it, our kids started marveling at how nice it…
was, and how much it must have cost.
The undertone of the conversation was that the owner must be uber-rich.
Never one to miss out on a teachable moment,
I mentioned that stuff like that isn’t necessarily an indicator of wealth.
“Touche,” I think you did the right thing at an appropriate time.
Taking a page from “The Millionaire Next Door,”
I explained that some of the wealthiest people that they’ll ever meet are the ones that don’t flaunt it.
In fact, most people probably wouldn’t even realize that these people are rich —
rather, they’ll seem just like “regular” people leading a “normal” life.
I like that, “some of the wealthiest people that they’ll ever meet are the ones that don’t flaunt it.”
The operative word there is “some of.”
From my observation, we have some of these and some of those. I think it’s a matter of choice.
I think we have those folks who have a well paying salaried job.
Some live above, their means & some live below, their means. This prompted our eight year old to say:
“Why doesn’t everyone just buy normal stuff? That way
they could get rich. And if millionaires just bought normal
stuff, then they could stay rich.”
While this is a bit of an oversimplification, I think our society could…
healthy dose of eight year old logic.
In fact, if more people thought like him, we wouldn’t be talking about…
negative savings rates and multi-billion dollar bailouts.
The author made a good point here, and the eight year old logic,…
in my opinion is just that, an eight year old logic.
I think if we were to all live by that code, we wouldn’t have the rich…
and diverse way of life that some of us are able to enjoy.
Can we all enjoy a rich and affluent lifestyle? I think so.
I think Mr. Buffet’s own life and behavior lends credence to that.
He is a multi-billionaire, in mine and your lifetime.
He gave away billions of dollars and made it all back and more quickly. Why? How?
I’ll pick this up in a bit. For now let’s continue with the original story.
Intrigued, I asked him if he wanted to be a millionaire. His response?
“Maybe someday, but not right now. If I was a
millionaire, I’d probably just worry about my money
all the time.”
From the mouths of babes… Bravo.
I think part of what the eight year old is saying is that he or she,…
doesn’t fully understand the intricacies of money right now.
Later on with more financial education, it would be more feasible.
A part of that logic could be a reflection of his or her parents own attitude towards money.
I don’t know if Nickel has or not a successful business that provides..
ample, monthly, passive residual income.
Maybe the tone would be different and maybe that 8 year old logic, would be different.
What he said, is right on par with…, accordingly in Mr.Buffet’s early …
life, he lived frugally, investing every extra dollar.
Using leverage to increase his wealth.
I think Mr. Buffet’s own life and behavior lends credence to the notion…
that many of us can live a prosperous life, even if we live above our means.
He is a multi-billionaire, in mine and your lifetime. He gave away..
billions of dollars and made it all back and more quickly.
Why? How? This is my belief.
It comes down to financial education. Having a system to use as a catapult.
He uses leverage in every area of his financial life.
Like the 8 year old logic.
In the beginning, he lived, below his means, investing.
Once he understood the power and use of money, he used bigger…
leverage, by doing so, he never has to worry about money.
That is why he can give it away and never worry about it.
The modest life style he lives, is his choice.
With his system of financial leverage he can afford to live an extravagant..
life-style and never worry about money for the rest of his life.
There were some interesting comments left.
From their tone, it sounds like they were from people who are doing …
what we were traditionally told, what life should be like.
Get an education, go work for a good company and earn linear income.
I think that after sacrificing through college, many people, who…
achieved what they have been taught, wants, to now reward themselves…
with the finer things in, life.
So they go out and over spend. Thinking that they have a great job…
and that they would be able to catch up.
But the problem is that they have one income and no system of…
leverage and no concrete financial or money education.
What they know of money is usually from mirroring their parents.
Below are two copies of comments from people, who are probably business owners.
Their mindset is totally different from the ones that seemed to endorse the 8 year old logic.
Here is the first:
“Beware of Envy. The underlying assumption being pushed here is that someone in a nice car can’t afford it or shouldn’t be allowed to have it.
Regardless of what you may want to believe, there are plenty of folks out there who can afford many nice things and frankly they should be allowed to have them and not feel guilty in the least for that.
Plenty of Average Accumulators of Wealth will do just dandy throughout their lives and will reach financial independence at standard retirement ages.
Not everyone is inclined to become wealthy by living in a small home in a working class neighborhood while driving 12 year old Chevy’s and drinking Budweiser.
The point of being frugal and accumulating wealth is not to live as a miser, but to focus and spend your money on those things you find of value in your life.”
As long as you are meeting all your financial goals (e.g. staying out of…
debt, retirement, college, etc.), why not own a nice car?
Or have a boat in the three car driveway?
Or take out of country vacations?5 Mil.
Sure, there are folks who pretend, but as long as you aren’t one of…
them don’t go projecting your envy on others by demonizing their…
choices of what they like to spend their money on.
Just because I wouldn’t allow myself to spend money on a Porsche…
or Ferrari because I would feel it was extravagant doesn’t mean every…
time I see one I get to assume the person driving it can’t afford it.”
Comment by Anonymous — Dec 8th 2012 @ 2:01 am
And the second:
“I’m a multi-millionaire and I constantly think about making money. I don’t really worry about the money I have because its very safe.
I hear a lot of statements such as rich people don’t buy new cars, big houses, etc.
Some rich people don’t buy new cars. I don’t I purchase my vehicles from auctions.
But some of my rich friends buy new cars and some of them lease cars.”
I have over 30 friends that earn millions a dollars per year and the only thing we really have in common is that we save our money and we own our own businesses.
When we want to buy something we get it, but we understand that business comes first.
It’s too complex to just simply say don’t buy this or don’t buy that because Warren B said so!
Every rich man/woman has their “Thing” that they overspend on. Some buy cars, boats, art, houses, etc.”
Comment by Anonymous — Jan 4th 2011 @10:40 am
This article “How to Become a Millionaire-The Simple Truth” was…
written a few years ago. But the underlying sentiment,
is still what many people hold onto fast today. However, many are …
now putting efforts, to learn money management and get better financial education.
Some have started a home-based business and are making a prosperous living.