Something happened to me that completely took over my mind and made me think non-stop about money. I completely transformed every facet of my existence to thinking more and more like a millionaire. Come on, you know you have it bad when you think about it during sex.
What type of mindset do you have to have in order to become a millionaire? First off, let me say that I am a firm believer that in order to reach a goal you must first be the specific person, that takes the actions, that reach that goal. Be, do, have! I’m also a firm believer that one is much better off learning proper money management techniques while they have 1 dollar, instead of waiting until later in life and not knowing how to manage.
Dr. Thomas J. Stanley has taken a couple of decades of his life to do extensive field research on millionaires. In fact he has surveyed and personally interviewed +1,000 millionaires during this time. Carefully analyzing this statistical data, as well as their direct advice, and coming up with many fundamental success principles that are shared by these millionaires.
For the past couple of weeks I’ve been listening to the audio version of Dr. Stanley’s book ‘The Millionaire Mind‘. The facts I learned surprised me, but more importantly they changed my paradigm, and my actions towards money.
I’ll share a few of the interesting and unexpected facts I learned in this book, and if you’re interested you can certainly find the book at Amazon or your local library. Remember these facts are statistically significant for MOST millionaires, not all of them. The mentality could be used by anyone for success.
Defensive Money Strategies from Real Millionaires
- House Purchases. Real Millionaires do not get houses custom built, nor do they move into new developments. They live in clusters with each other in OLD neighborhoods, in OLD houses. Most are 15 years old and they often triple in price since their purchases.
- Clothing Purchases. They aren’t going to buy really expensive clothes. They may frequent thrift shops or even Walmart to get their clothes. So don’t be embarrassed to go cheap, just think of it as acting like a millionaire. They will buy really expensive shoes, and resole them when necessary. Since they’ll wear them for a couple of decades the cost per wear will be marginal compared to constantly replacing a cheap pair.
- Furniture Purchases.Real millionaires do not buy the latest styled furniture. They’ll go out and buy a $10,000 antique table made from REAL wood, not modern saw dust. They’ll repair and refinish this table when needed. They can keep it for a lifetime, pass it on to their children, and not worry about upgrading to the latest. Guess what? Antiques raise in value, so their net worth doesn’t take a hit at all! As far as other furniture goes, they re-upholster it a couple of times in their life time, which is way cheaper than buying new again.
- Vehicle Purchases. Real millionaires will not buy the latest car while it’s still sitting on the lot. They’ll keep their cars well maintained for many years, and when it comes to make a new purchase they’ll find a used car that is in good condition. This way they can avoid that initial depreciation that comes with driving a brand new car off the lot.
First Cost Vs. Life Cycle Cost Defense Strategy
This applies to the amount of money that can be saved when purchasing an item, versus how much fixing and replacing this item will cost over a life time. The furniture purchases and shoe purchases I mention above are pretty good examples, but it can apply to many other situations as well.
A good example that Dr. Stanley used was in the case of paying a plumber to do some work for you. You might be able to buy a cheaper boiler, install it yourself, and save a few hundred dollars. However, you aren’t thinking about the big picture.
Factors To Consider
- Your Working Hours. While you were being a do-it-yourselfer you weren’t generating income from your regular job. Even if the professional that you hired was earning more money per hour, you must consider the work you’re missing. If the plumber makes $100 and you make $75, then by doing it yourself you only saved $25 per hour.
- Your Lack of Skills.Your lack of skills in this specific profession may cause unexpected monetary losses. The install will not go as planned and you will ruin the item that you purchased, having to spend more for a new one.
- Possibility of Injury. Whatever you’re undertaking may cause an injury. If you were to be injured at your job, chances are your job would cover it. If the professional you hired were to be injured, his job would cover it. However, if you hurt yourself doing work around the house, you will be responsible for your own injuries.
- Purchasers Insurance.When a professional does work for you it will often times come with an insurance. If a problem is to arise you just dial the number and get someone over to fix it. If you did the job yourself you’re taking more time off work to do the fixing yourself.