Responses The Millionaire Next Door

1. Big Hat, No Cattle is a phrase used in the book in response to a middle

manager of a large banks quote about his view of millionaires driving
expensive cars; wear expensive clothes, watches and other status symbols.
This phrase goes on to basically say many people buy those things when they
really cant afford them to make the illusion that they are wealthy. When in
real life they cant and often use debt to do it. Which makes the problem even
worse.
One of the main concepts of The Millionaire Next Door is to spend less than
you earn. Anyone who spends more money then they make will not increase
their net worth. If you are going into debt trying to create an illusion of
wealth, you will never achieve a stable net worth or even retirement.
2. Even though Mr. Richards and Mr. Ford are both men close in age and yearly
income, Mr. Richards has nearly five times the net worth. This is because Mr.
Ford wants a lavish life style such as nice a higher upper middle class status,
which isnt the type of life style Mr. Richard, cares about. By looking at Mr.
Richard and the way he dresses, the cars he drives you wouldnt be able to
tell the kind of money he has. Mr. Richard has chose to be smart with his
money with saving and investing unlike Mr. Ford who would rather show off
to people the wealthy life style he thinks he has.
3. Mt grandfather was UAW, he lived beyond his means. After my grandmother
passed away 7 months ago, my parents became in charge of helping my
grandfather with paying bills and trying to help him find somewhere else to
live. It was then I realized how little my grandfather actually had. He worked
up until 3 months before he died at the age of 80. He had no retirement and
was struggling to make ends meet with social security, the debt of credit
cards my grandmother and himself had raised, losing income from my
grandmothers social security, etc. With thorough budgeting on my fathers
side he began paying credit cards off but realized he couldnt afford to live on
his own. This was heartbreaking to watch a man who served for our country
and worked hard his entire life have little to nothing. This was eye opening to
me on how important savings, retirement and being smarter with your
money is.
4. Most people will never become wealthy in one generation if they are
married to people who are wasteful.
Upon giving his wife $8 million of stock, from taking his company public,
what did his wife continue doing? She expressed her appreciation when
her husband gave her the stock; even with that amount of money she
continued her routine of cutting out coupons not even worth dollars.
Why would someone who is a millionaire need to budget? Most millionaires
didnt just become millionaires over night. They got there by budgeting,
trying to control how their money was spent. You always here hear that
rich people get richer by never spending their money.
5. Being possessed by possessions is the need to impress people by the things
you own. He works hard for the things he owns, but his main need is to
show others all of the things that he owns and the lifestyle he can have.
Teddys parents were heavy smokers. They viewed buying cigarettes as a
small expense compared to the amount of money they made. But when you
add up those little expenses that recurred over and over again it can add up
quickly. If they would have stopped smoking and placed that money
somewhere smarter such as investments, saving accounts, etc. it would have
went a long way.
6. Mr. Rodney is being described as having sold his financial independence
because when the company he was working for offered him a matching stock
purchase plan and he made the wrong decision. The plan slowly over time
had the potential to be very worth it for Rodney. It would allow him to
withhold a 6% of his income in shares of the corporations. This would also be
beneficial because it would reduce his taxable income. He chose to not
participate because he felt he couldnt afford it, now years later he is feeling
the repercussions and is worried about retirement.
7. My goal is to become financially independent. My plan to achieve this is to
first find a job that has a good income with benefits. Ive actually found that
job that pays well and has a 401k plan that the company will match $ to $ up
to 4%. At that point I will budget my expenses and make sure I am investing
as well as saving my money. I dont want to spend all of my money on objects
that reflect a lavish life style but not feel that way when I look at my bank
account. I will plan ahead as well, putting money away for retirement so I
never have to feel like how my grandfather felt at 80.
8. Mr. W.W. Allan declined the gift of a Rolls Royce because he felt it did not
represent the lifestyle he wanted. He was a big fisher, he felt you could not go
out fishing and put hes findings in that type of vehicle. He worked on
budgeting his money so he didnt have to feel those types of burdens so why
add to what he worked his life to prevent?
9. The financial outcome of Mary and Lamar once her mother passes away is
currently unsure. They didnt have any idea how her mother budgeted her
money, how much money would be in the trust that Mary would receive, etc.
They have the potential though to come into a large amount of money very
quickly. The opportunity of this caused Mary and Lamar to already begin
planning for buying a larger home, traveling all across the world and even
potentially buying several vacation homes. They were already spending the
money in their minds that they didnt even have.
Ms. BPF is still living with her parents at the age of 30. Her parents want to
give their daughter every advantage. They basically coddle her and dont
push for her to be independent. She may own her own business, which her
parents continue to invest in; it only makes her $50,000 as of last year. Along
side that her parents continue give her $60k every year. They feel optimistic
about her growing up sometime soon, but why would she? Theyve made a
nest for her to just continue the route she is on.
 The primary message of Laura (A Woman of Great Courage) story is that it
can be amazing when you set your mind on something what you can achieve
when you have alternative except to succeed. Even though she went to school
and got an education to teach English, she felt she wasnt making enough to
support her family. Thats why she started in real estate sales. With her
dedication, in the first four months she made more money than a year of
teaching English.
10. The consequences for Beth and her husband for receiving EOC is judgment
from her parents. When her husband was in school, they lived with her
parents. Instead of treating him like family, especially a son in law, they
thought of him more as a waiter, handyman and chauffeur. Once they were
ready to purchase their own home they received help from her parents.
Which in the end doesnt seem worth it because now her mother thinks she
can come over when ever she wants without notice to sit in judgment of how
they live their lives.
The rule of Affluent Parents & Productive Children that I find to be the most
important is Never tell your children that you are wealthy. I find this so
important because children need to realize how important savings and
budgeting is on their own. If they know their parents are rich they feel that
they can have their parents bail them out of financial situations. They also
wont try to be as rich as their parents this could lead to debt of trying to
just reflect a lavish lifestyle.
11. The conflict between Mr. W and the residents was because they didnt view
him and his wife as beautiful people for the community. They just tried to use
the dog as an excuse for them to leave since he refused to get rid of the dog.
Mr. W got back at them by stating he would just rent out his condo for 52
weeks to his factory workers. This seemed to be the worse of 2 evils for the
people on the committee so they decided to let the dog say.
12. After finishing The Millionaire Next Door, the most important concept from
the book that I found useful is spending less than I earn. This was a problem
that I had when I graduated high school. I ran up credit card debt like it was
nobodys business, with clothing, accessories, etc. Now that I have sense paid
everything off and have a lot better handle on budgeting my money, I look
back and wonder how much money I could have saved or invested.

Another concept I found to be useful was Economic Outpatient Care. When it

stated that parents who give these acts of kindness are considerably less
wealthy than their peers who have economically independent children. I
thought of my own parents who continue to bail out my older brother time
and time again. They have missed out on vacations, spending all of their
savings, having to move in order to get my brother out of financial trouble.
Even in his thirties with children he didnt budget properly with his wife that
they couldnt afford diapers for their son so my parents had to buy them, yet
the got season tickets for REAL.
 One small change that I could make to improve my financial wellbeing is to
put a percentage of my income into a 401k to prepare for retirement. After
watching my grandparents suffer trying to live without having proper
savings and retirement plan has forever changed my thoughts in regards to
saving money. I want to not have to worry about working my entire life to
survive, after working and supporting kids for years I want to be able to relax
with my husband in retirement.

SLCC Learning Outcomes:

Completing this assignment after reading The Millionaire Next Door helped me
achieve being able to Think Critically & Creatively from the SLCC Learning
Outcomes. I learned a lot about saving and investing money while reading this book
and now I can apply things I learned to my own budgeting. Such as spending less
money than I make. I dont want to be in debt and be able to retire, so now I can
apply critical thinking towards making and saving money.

Another SLCC Learning Outcome I gained from this project is Developing

Knowledge & Skills to Work with Others in Professional Manner. I learned a lot
about millionaires in this book and how you cant just assume someone who drives a
nice car and lives a luxuries life style is a millionaire. Often times those people just
want the illusion of that type of life. The guy who has a beat up truck that goes
fishing could have even more money then the next. Have a professional manner
regarding everyone and you can learn something from everyone you interact with.