I used to think that everyone who had a lot of “stuff†were way better off than I was. You know those people. We all live near them. It wasn’t until I read a book called “The Millionaire Next Door†that I realized how wrong that assumption is. If you haven’t read this book, it should be the very first book you read about money. It really opened my eyes. My favorite quote in the book is, “Big hat, no cattleâ€. Apparently down in Texas they refer to someone who is in debt and doesn’t really have anything to their name as having a big hat and no cattle. Probably because the person is all show but doesn’t have any money to back up the lifestyle.
I am absolutely amazed at how many people I have met that are in the same situation. They almost seem obsessed with purchasing things. Cars, boats, electronics, clothes…. you name it. When Thomas Stanley (author) went out and interviewed millionaires for his book, he found that the people you’d think are millionaires are not. Many of the people he talked to lived in modest houses and drove cars that were over two years old. Another great quote in the book: Mr Stanley asked a millionaire what kind of beer he drank, and the millioinaire’s response was, “I drink two kinds of beer. Free and Budweiserâ€. Anyway, as I looked around, I realized that all the people that I had looked up to as being well off, really weren’t. They were just far more leveraged than I was.
Next time you see one of your neighbors drive up in a fancy new car, or towing a new boat behind their car, or rolling up with a new RV, remember that, statistically, they probably just signed up to pay the regular price for that item plus interest. And don’t forget to read “The Millionaire Next Doorâ€. It really is a great read.