Quote:
Originally Posted by jcyuhn
Remember "The Millionaire Next Door" from 1996? Well, there's a wikipedia page on it now if you don't. It looked at the lifestyles and habits of accumulators of wealth. Typically they were not flashy - lived in the same old house, drove a nice car, but bought it used, owned their own business, etc. Your description of the flashy guy sounds exactly like the folks in MND that have no wealth, and the opposite of those who accumulate prodigious wealth.
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Unless you have access to any individual's private financials, there's really no way to guess at almost any individual's annual earnings, or net worth by how much flash they reflect. Some of the wealthiest folks I know don't have flash, and others do have flash. Commenting on what someone drives, how they dress, or where they live - as knowing their financials?? Is just plain foolish.
Living in the same old house for numerous decades, or driving used cars that are four or more years old is just good sense.
Personal residences are a lousy place to build substantial wealth for any individual, as uncovered by Thomas Stanley. It's so much more productive to invest in stocks or real estate, than reaching for wealth through one's residence. This may be news to a lot of folks. But probably worth their pondering.
Without looking up the exact numbers, here's some of what the author of TMND learned:
One study of CEOs of major corporations that Thomas Stanley collected data from, reflected that these executive's personal residences were in older, established neighborhoods of major metropolitan areas, were two story brick, 4 bedrooms, and had a conservative square footage foot print, of 50'X50' IIRC. One other noteworthy data point was that these personal residences were only 8% on average of the individual's net worth. 8% to me is a good target to shoot for. 6% or less, even better. For most home owning Americans, their home may be their only asset they ever gain a stake of equity in.