Home » Book Reviews » Book Review: The Millionaire Mind

Summary

Are the richest people in the world extravagant spenders? Do they live with flare and spare no expense in their personal lives as a reward for having earned from business or inherited their wealth? Our author in this read, Thomas J. Stanley, sets out to find the truth in this text. Through use of a survey and questionnaire methodology, Stanley examines a cross-section of very wealthy people to examine their way of life.

Specs

  • Author: Thomas J. Stanley
  • Pages: 406
  • Reading Level: Beginner
  • Rating: A+
  • First Published: 2000
  • Similar Read: The Millionaire Next Door by Thomas J. Stanley

Life Cycle Cost – Maximalists

Of the many distinguishing factors of the rich, their viewpoint regarding waste stands out most clearly. Your average consumer tends to buy things as cheaply as possible, wear these items out, and then buy  new. On the contrary, your typical millionaire is most likely to buy quality, maintain it, and continue using what they buy for years to come.

Millionaires look at the life cycle cost of an item. For instance, rather than simply seeing the price tag of $100, they will go a step further and ask how long that item will last them. If ten years is to be expected, then they can view the true cost as being $10 per year. The poor and middle class might decide the $100 is too expensive and instead spend $20 on a cheaper version which, if bought annually, would amount to $20 per year and thus be more expensive over time.

Two examples of actual items the rich apply this life cycle notion to include the resoling of high quality leather shoes and well-made furniture which they may reupholster as needed.

Health and Wellness

The rich place a premium on being and remaining healthy. They exercise regularly with the understanding that by taking care of themselves in the present, they will allow themselves to age well and continue to be productive into the future.

It is no surprise that statistics tend to suggest that triathletes, marathoners, tennis players, and golfers, tend to represent a wealthier segment of the population. The people engaged in these activities recognize the importance of taking a holistic approach to life which includes nurturing the body, mind, and spirit.

If you stop to think about it, it makes a lot of sense, doesn’t it? What is the point of working your entire life to accumulate wealth and riches just to find yourself admitted to hospitals to manage various ailments? I’ve spent considerable time reading bucket lists in order to understand the driving forces behind people’s lives and find what motivates them and I can assure you I have absolutely never seen someone say they want to be sick. Everyone wants to be out there in the world doing things.

A few years ago I went on a Mediterranean Cruise and experienced some of the finest and most historic locations the world has to offer. What stood out the most, beyond the Leaning Tower of Pisa and the Vatican, was how fortunate I was to be there as a young adult and able to actually climb the monuments and experience every bit of it. The majority of the travelers were there witnessing everything for the first time and yet so many were unable to climb even a flight of stairs. Then and there I promised myself I would never let that happen to me – inasmuch as I have a say in the matter.

The wealthy recognize the importance of keeping healthy and so should you if you want to be rich and enjoy your life.

Risk Taking

Any way you slice it, aside from inheriting millions or winning the lottery, getting rich tends to involve risk. Consider the spectrum of investments; the stock market is considered highly risky but also has the potential for huge rewards. Government-backed investments come with the full promise of payback of a nation’s capital but tend to offer very little in the way of returns – after inflation is factored in, the return is often negligible.

Taking a stake in investments without any guarantee takes some guts. Millionaire’s tend to do their research first and then invest confidently, willing to risk the downside for the outsized potential for returns.

On Page 134 of his text, Stanley writes:

“Another part of their pattern is that, independent of the capital they have invested in their own businesses, they also own shares of publicly traded corporations.”

If you think investing to get rich is risky, consider the flip side of the equation; most people try to play it safe and wind up with mediocrity or worse. Not investing has its own risks such as a declining standard of living as inflation erodes wealth. The safety of a bi-weekly paycheque accompanied by some benefits and a few weeks of vacation sounds nice but also grinds down ambition over the passage of time.

If I had to choose which risk to take, the investing route that has enriched millionaires for generations is the one I would prefer.

Conclusion

Most investment books I read tend to cover specific investments. They suggest the best methods to increase one’s wealth by use of specific investment tools and discuss ratios or other financial variables. The Millionaire Mind blows most other financial texts out of the water if you really want to learn how to become rich.

The intrigue of what it takes to get rich is entirely demystified as Stanley looks at the literal nuts-and-bolts of richness. While most people are searching for a get-rich-quick scheme, actual millionaires tend to put far more consideration into choice of spouse, where they choose to live, and taking part in value-added activities such as family sports and building relationships rather than wasteful or trivial pursuits.

The Millionaire Mind is the blueprint for achieving millionaire status and earns my highest endorsement.

Thank you for reading.

Ryan

Have you read any of Stanley’s books? Do you believe there is a roadmap for financial success?

Pictures courtesy of pixabay.com

 

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