1.

Explain the following two (2) concepts addressed in The Millionaire Next Door:
A. Big Hat, No Cattle:
Is an expression used to describe somebody who focuses on appearing wealthy. With luxury
cars, nice clothing, and big houses. Most people associate someone who looks wealthy to be
wealthy, and someone who looks like a blue-collar citizen to be just that; but that is not always
the case. The book talks about a Texan who was a very successful and wealthy business
owner, but just by looking at him, you would never know. It just goes to show that looks can be
deceiving.

B. Go to Hell Fund:
This concept is that you place enough money in a savings account to be able to live comfortably
for a while without having to worry about how to make ends meet while not working. Or an
accumulation of enough wealth to live without working for ten or more years. In this example
from the book, a couple, between the two of them, had enough money to live comfortably
without having to work for 10 years. Even more if needed.

2. In the examples of Mr. Richards (PAW) & Mr. Ford (UAW), both men are close in age &
yearly income. Explain why Mr. Richards has nearly five times the net worth of Mr. Ford.
(Be specific)
Mr. Richards has more money than Mr. Ford because Mr. Richards is a PAW (prodigious
accumulator of wealth) and Mr. Ford is a UAW (under accumulator of wealth). The difference
between a PAW and a UAW are that PAWs The generally have a minimum of four times the
wealth as those accumulated by a UAW. Mr. Richards owns a mobile home dealership with a
total income last year of $90,200. His net worth, using the wealth equation, should be $451,000.
His actual net worth is 1.1 Million. Mr. Ford is an attorney with a total income last year of
$92,330. His net worth is expected to be $470,883. His actual net worth is $226,511. This is due
to the fact that Mr. Ford spends a majority of his income to uphold his rich appearance with the
expensive suits, drives a foreign car, and lives in a large home. UAWs live above their means.

3.Short answers:
A. Most people will never become wealthy in one generation if they are married to people who
are ______________. Wasteful

B.Upon giving his wife $8 million of stock, from taking his company public, what did his
wife continue doing?
She calmly sat at the kitchen table and continued cutting out 25-50 cent off coupons.

C. Why would someone who is a millionaire need to budget?

Someone who is a millionaire needs to budget because if they do this they can keep building up
their wealth, this way they secure their present but also their future.
4. In the example of Theodore Teddy J. Friend and his parents, answer the following
two (2) questions:

A. The book describes Teddy as being possessed by possessions. Explain this

comment.
Teddy is possessed by his possessions because he works for things. He views his economic
success is based on the amount of his possessions. He works, earns and sacrifices to impress
others.

B. What was the small change Teddys parents could have made that would put them in
the millionaire category? (Be specific.)
The small change that his parents could have made for Teddy was to teach him the ways of the
PAWs. His parents had a modest income but they were not frugal with their money. They often
ate out, drank, smoked and overstocked the food pantry. They would often count on the tax
returns at the end of the year before it was even received.

5. Mr. Rodney is a high-income/low-net worth corporate manager. Explain why he is

described as having sold his financial independence.
Mr. Rodney was offered a matching stock purchase plan. He felt like he could not afford to
participate in this plan. He spent all of his income towards his mortgage, leased vehicles, tuition
bills, club dues, and a vacation home.

6. Why did Mr. W.W. Allan decline the gift of a Rolls-Royce?

Mr. Allen felt that once you got one luxury item, you were expected to get more and change
your life style. He believes that products change people. He talks about how he likes to fish, and
if he had a Rolls Royce he would no longer be able to fish. He would not be able to do that with
a Rolls-Royce and would stick out like a sore thumb if he did take it to go fishing. He would
either need to stop fishing or decline the car.

7. Regarding Economic Outpatient Care (EOC), answer the following four (4) questions:

A. Explain this statement: The more dollars adult children receive, the fewer they
accumulate.
The statement is saying that the more you give your adult children money the more things that
they accumulate and cannot afford to pay. It is not being put towards anything of value that will
help them in the long run.

B. What is the likely financial outcome for Mary & Lamar once her Mother passes away?
Mary & Lamar are not sure how much money Marys mother will have in the trust for them but it
is likely they will consume the inheritance quickly. Marys mother is making their mortgage
payments and without her, they will probably lose their home. Mary & Lamar will likely not be
able to financially support themselves.
C. The parents of Ms. BPF were determined to give their daughter every advantage. After
they created an ideal environment for her, what was the result?
Wit the result of Ms. BPF being in her late thirties. She still lives at home. She has no
commercial-related debts. With her parents still continually investing into her business and
continue to do so. With a last year outcome of her business earned her nearly only $50,000.
While her parents continue to give her the support of giving her $60,000 every year. Ms. BPF
parents still feel like she will become a independent individual sometime in the near future.
Though with all of this said we feel as optimistic as her parents in regard of the situations.

D. In the case of Laura (A Woman of Great Courage), explain the primary message
derived from her story?
She showed great courage from having educational background were in great supply and
reasoned that her income from her teaching, editing, and writing jobs were not likely to be
supportive enough to the full potential to help her family's current lifestyle. Laura discussed
various employment opportunities with several informed business owners within the community.
After having these discussions, she decided to try the field of real estate sales. During her first
four months, she earned more selling real estate than she did in her best year teaching English.
As she goes on to say on the term of It's amazing what you can do when you set your mind to
it. You'll be surprised how many sales calls you can make when you have no alter- native
except to succeed.

8. Regarding Affirmative Action, Family Style, answer the following three (3) questions:

A. In the example of sisters Ann & Beth, describe the consequences to Beth & her
husband from receiving EOC?
Beths parents control and criticizes their lives. Beths mother will show up to their house
unannounced anytime she wants because she feels she has a right to do so since the helped
purchase the house. They also only live 2 miles away from their parents. Also, while Beths
husband was in school they lived with her parents and they treated her husband as a waiter,
handyman and chauffeur rather than a son-in-law. Beths parents have also told her and her
husband that they will never be able to live on their own and maintain their lifestyle without her
parents help. She is financially handicapped.

B. Explain the concept weakening the weak.

This means to ignore an issue with your child or someone else. It is not giving that person the
chance or the resources to get help that is much needed. An example of this is a child who has
a writing deficit. The child, instead of getting the help he needed for his writing, was taken out of
the school he was in and placed in another one. When things did not fix themselves, his father
took it upon himself to just write his sons papers for him.
C. Select one of the Rules for Affluent Parents & Productive Children & explain why you
think this rule is most important.
The one I thought was the most interesting is never tell parents that their parents are wealthy.
The reason behind this is that the later in the child's life they are less likely to accumulate wealth
from their high paying job, to trying to live that high lifestyle, just because they know their
parents are rich.

9. Explain the root cause for the conflict between Mr. W & the residents of the vacation
condominiums. (HINT: Its not because of his dog.)
The root cause of the conflict between Mr. W and the residents of the vacation condominiums
was due to the fact that they did not view Mr. and Mrs. W as beautiful people and were using
the dog as a reason to get them to leave to maintain their beautiful people appearance. This
was supported by the fact that Mr. W states that since they were not going to get rid of their dog
that he would just rent out the condo to his factory workers 52 weeks out of the year. Once the
committee heard of this proposal they decided to allow the dog to stay since they did not want
factory workers staying there.

10. Now that you have finished reading The Millionaire Next Door, answer the following
questions in a minimum of three (3) paragraphs.

A. What are the two (2) concepts you found most useful?
i.I found the concept of PAWs and UAWs one of the most helpful. Reading the definitions of
both made me realize that I am a UAW, concerning some of my spending habits. I rely on my
credit cards a lot to get what I want if I do not have the cash for it and that tends to put me in
debt with credit card bills.
I have also found the concept of not relying on your parents for help important as well. There
have been a couple of times that I have asked my parents for money to help me with large sums
of money (car troubles and school tuition for a semester). I dont take it lightly when I ask them
for money, but I know that my parents are willing to help out when I cant pay for something of
large value. Because of this, it is expected that I pay for groceries, rent, isurances, credit cards
and other living expenses.

B. Give a specific example of one small change you can make to improve your financial
well being.
The thing that I found most helpful was learning to put money away into savings. I already try to
put a lump sum of money that is left over in between my paychecks into savings, but putting a
percentage (5% or 10%) would be a good way to build a steady foundation for an ample savings
account.

Reflection:
Completing this assignment helped me to achieve the following 2 SLCC Learning
Outcomes.
The first one is Students develop quantitative literacies necessary for their chosen field of study.
I am going to school to become a teacher. Teachers do not make a lot of money and most of
their supplies for their classrooms come from their own pockets. I can use this to keep in mind
that as cool and fun as somethings will be for my classroom, they are not always needed and I
need to remain realistic about my budget. I will also use this to be able to make my budget and
fit in money aside to be able to afford the things that I need for my classroom and sometimes
buy those fun (not necessarily needed) things. I can also take this into my classroom and help
my students learn the value of a dollar. It is never to early to teach your children the value of
saving and not spending over what they should on toys, candy, rides, ect. It is okay to do in
moderation and when you have the money to.
The second learning outcome is Students think critically and creatively. This course has made
me realize my spending habits and that I am doing okay, but I could be doing better. It has
helped me to come up with some creative ways to still do the things that I like to do while not
spending above my means. It has helped me to problem solve some of my financial issues by
using some of the tools provided in the text and also taking some lessons from the reading
materials. I am going to start applying a majority of these topics to my own life and eventually
secure my financial future and being financially independent.