The Millionair

e Next Door

32 Observations

1 – Inconspicuous

Lifestyle

1. Inconspicuous Lifestyle

2 - Mentor

Example of successNo commission or profit from advice

Tax advisors preferredExample - CPA

1. Inconspicuous Lifestyle2. Mentor

3 - Modest House

Often a ‘starter’ home

In a middle class neighborhood

My wise father said to me,“Get a modest home andpay off the mortgage . . .

Gordon B. Hinckley

1. Inconspicuous Lifestyle2. Mentor3. Modest House

97% of millionaires are homeowners

4 - High Instance ofHome Ownership

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership

5 - Dr. North (PAW)

vs Dr. South (UAW)

Can you live like Dr. North

Can you see how easy it is to

become Dr. South

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)

6 - EducationIncome

AccumulationEducatio

nIncom

eIncom

eAccumulati

onPhysicia

nsDentistsOrthodonti

stsAttorneys

CPAsFinancial AdvisorsStock BrokersInsurance Agents

Home BuildersActorsArtistsMusicians

Provide Professional Services for a Fee

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation

7 – Income – vs – net worth

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation7. Income – vs – Net Worth

def. – Net WorthFinancial Assets

– Liabilities (debts)= Net Worth

8 - First Generation Millionaires

85% are first generation!

Second generation millionaires

At a disadvantage:

‘Overnight’ millionaires

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation7. Income – vs – Net Worth8. First Generation Millionaires

Odds of being an overnight millionaireOne in four thousand

9 – Inheritances

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances

More than 50%Never receive $1Majority of inheritances

Gone by the third generation

10 – Economic Outpatient Care

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient CareLess than 2.5%Ever received more than a

$10,000 in giftsMore than 50%Never received any education financialassistance from any relativeEOC to Adult Children – Rarely GivenThe more assistance adult children

receivethe less likely they are to accumulate

11 – Monthly Payments

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments To pay . . .

curseTo receive . . .

Million Dollar ChoiceTM

12 – Budget

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense

Intense focus on knowing

where money is spent

13 – Shoppers

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense13.Shoppers – Not Intense

Not extensive time and energy spent

Love NOT giving away their moneyVery aware of where to find a ‘good deal’

14 – Higher Education

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense13.Shoppers – Not Intense14.Higher Education

80% are well educated

No guarantee offinancial success

15 – Higher Education

Spending on Children

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South

(UAW)6. Education / Income /

Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense13.Shoppers – Not Intense14.Higher Education15.Higher Education for Children

“We spend well for theeducation of our children?”

16 – JOY of Prudence

and Frugality

16.JOY of Prudence and Frugality

Delaying GratificationOr

Developing a HealthyPreferred Lifestyle

16.JOY of Prudence and Frugality17.UAW / AAW / PAW

17 - UAW AAW PAWAsset Formula

Current ageCurrent income(x)___________________________10

What Your Current Net Worth Should Be

$ 100,000(x)10 = $ 450,000

$ 450,000$ 450,000$ 900,000

Underachiever UAWAverage Accumulator AAWProdigious Accumulator PAW

=

=

45________________

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance

87% leading cause ofAmerican divorces –

money American Bar

Association

18 - Spouse Significance

I am satisfied that moneyis the root of more trouble in marriage

than all other causes combined.Gordon B. Hinckley

Cornerstones of a Happy Home

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person

19 – Marrying the Right PersonVery Important + Important

I married the right personMillionaire Mind

84%

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate

20 - Divorce Rate

One-half national average

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse

Rarely worked21 - ‘Working’ Spouse

No time consuming professional careers

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome

22 - The ‘Better than My Life’ Syndrome

“I want your life to be better than mine”We forget how we built our resources

Children likely to spend to meet the ‘expectation’We ‘encourage’ inefficient professional lifestyles

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment

23 - Self EmploymentTwo-thirds of all millionaires are self employed

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save

24 - How Much

to SaveMillionaires Save

At least 15%Average of 20%

Joseph to Pharoah - take up a ‘fifth part’ . . . Genesis 41:34

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules 25 - Investment

Rules Familiarity with company or industry

“Dull / Normal” investments Twelve per-cent return over the

past 10 years Increasing Dividends each quarter Same Management Team

Long - term

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits

Rarely purchase:

26 - Purchasing Habits

“I can’t get my wife to spend any money”Being frugal –

a cornerstone to accumulation

Brand namesExpensive items

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business

27 - Most ProfitableBusinesses

Begin with what already worksSole proprietorships:

15 million only made $6,20025% made no profit

Partnerships - 42% made no profitCorporations - 45% made no profit

The Most Profitable BusinessThe One that Compels you Most!

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives

28 - Estate Objectives

AmbitionDiscipline

Independence

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives29.Non-Beneficiary Executor 29 - Non-beneficiary

Estate Executor7 out of 10 named

non-beneficiary as executor

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives29.Non-Beneficiary Executor30.In-Law Conflicts

30 – In-Law Conflicts

Majority of family financial conflictsBest In-Laws – stay out

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives29.Non-Beneficiary Executor30.In-Law Conflicts31.Live Life WELL Below Means

31 – Live Life WELL

Below Means

16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives29.Non-Beneficiary Executor30.In-Law Conflicts31.Live Life WELL Below Means32.Life of DISCIPLINE,

SACRIFICE, HARD WORK

32 – Life ofDISCIPLIN

ESACRIFICE

HARD WORK

1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South (UAW)6. Education / Income / Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense13.Shoppers – Not Intense14.Higher Education – 80%15.Higher Education for Children16.JOY of Prudence and Frugality17.UAW AAW PAW18.Spouse Significance19.Marrying the Right Person20.Divorce Rate ½ the National Average21.‘Working’ Spouses – Rare22.‘Better than Mine’ Syndrome23.Self Employment24.How Much to Save – Average 20%25.Investment Rules26.Purchasing Habits27.The Most Profitable Businesses28.Estate Objectives29.Non Beneficiary Executor30.In-Law Conflicts31.Live Life WELL Below Means32.Life of DISCIPLINE, SACRIFICE, HARD

WORK