Book Review: The Millionaire Next Door

I am quick to play the victim card in my head. When something doesn’t go my way or I don’t get something I want, I quickly find the outside forces I can blame on why I didn’t get my way.

Most people suffer from focusing on the external forces rocking our world as opposed to the internal feelings, motivations, and preferences that we actually have control over.

External conditioning (how forces outside ourselves shape our decisions) is the theme of The Millionaire Next Door by Thomas Stanley and William Danko. The premise is that many people who have wealth, or what the authors call PAWs (prodigious accumulators of wealth) don’t live like most think they would. Basically, PAWs avoid high dollar luxuries and live frugally, and it’s that very nature that made them wealthy in the first place.

Contrast that to the UAWs (under accumulators of wealth). These folks may have incomes north of 6 figures, but ultimately, they accumulate very little wealth because of their spending habits. They do what comes natural…they spend…a lot.

Granted, that spending allows them to experience some very nice vacations, some very name brand clothing, some sweet vehicles, and some very large living spaces. However, it does not secure their financial future. If these high earners were to have a disruption in their income, many could not go longer than a year before they would be completely broke and some much less time than that.

The contrast between the PAWs and the UAWs takes up the entire first half of the book. Then the authors took a shift that surprised me. In much of the latter half of the book, it turns into a parenting book!

The authors don’t focus on the contrast of PAWs and UAWs children. Instead, they focus more on what happens to children that causes them to develop into a PAW or a UAW as adults.  Being a PAW does not guarantee your children will pick up on the principles that helped their parents accumulate wealth.

In fact, research shows that children who receive substantial financial support from their parents often never develop the ability to sustain themselves. They survive on what the authors call Economic Outpatient Care (dependency on financial gifts and support from the folks).

It is reasonable and seemingly virtuous for a parent to want to help their kid, especially for something such as advancing education via college. But the research showed that large financial gifts to kids can be incredibly dangerous to a child’s ability to become financially independent if such gifts are given before the child has already proven independence.

Perhaps some parents prefer the children to be indefinitely dependent, because with dependence comes a level of control that many parents desire to maintain over their children, or children-in-law, and later grandchildren.

Personally, I want to raise independent kids. And my guess is you do too. Not because I don’t like to keep my kids close or want them to come around often as adults. I certainly do! But I can’t guarantee how long I or their mother will be around. If something does separate us from our children, I expect my kids to mourn. But not  because they are fearful of how they’ll find provision.

My take is this: our children have to experience pain in their lives so seeds of love, joy, patience, kindness, goodness, faithfulness and self-control can be planted deep within their souls. Powerful experiences are the only thing that can get those seeds deep enough into our children’s hearts to make them take root without our constant supervision or intervention. Those powerful experiences often come with pain.

This book shows the difference financial discomfort can have on our kids. Allow your child to know what work is required to be financial successful, or what it takes to earn and pay for a college degree. They deserve that from you!

But it’s not enough to limit the painful experiences to money. Our children need to learn the same when facing relational turmoil or when searching for answers to the universe’s biggest questions.

Before accusing me of masochism, know that I HATE pain personally. I fear pain much more than death. And I HATE even worse the thought of my (or others’) children enduring pain. But I would much rather have my children go through difficult experiences when I am there to comfort and catch them.

My heart breaks for the kids who are sheltered from pain/sacrifice all their lives only to get punched in the gut by the world once they leave home and feel completely unequipped to pick themselves back up.

I didn’t expect to get fired up about parenting when I read this book! But our children’s lives are the legacy that can be far more rewarding and enduring that our net worth. So it’s worth learning what other financially successful people have done to liberate (or handicap) their children.

Regarding this book and the recommendation to read it…I haven’t read enough other books to classify The Millionaire Next Door as a must read. But I think if you find you and your family taking your cues from the world instead of making decisions based on your priorities, including spending and savings decisions, than this book will be of great value.

Finally, if you need some financial empowerment, this book can deliver. The case is strongly made that your ability to accumulate wealth rests solely on your shoulders and your ability to make wise spending (and earning) decisions. If you can do that, financial independence is within reach for you. And for all people…that’s news worth sharing.

Do you know the six greatest words in the English language?

I love everything about these 6 words. They lay at the foundation of my life. And they have a lot to say about your life as well.

The best is yet to come

Those 6 words have 4 attributes which make it profound.

First, is what it means for the future.

Those words are the epitome of optimism. There’s only one alternative to optimism. And pessimism implies that life is mostly outside of your control, which is a defeated and false way to live life.

The second is what those words say about the past, or more appropriately, what they don’t say about the past.

There is no implication in that phrase of whether the past we’ve come from was incredible or terrible.

Some are thinking “the best better be coming because I’ve already been through hell and back” while others are worried they’ve already used up their good years as if it’s a finite resource.

But “the best is yet to come” puts those who’ve been through hell at the same starting line as those who have never felt better. In light of these words, our pasts matter not, there is only our future.

The third quality is the use of the word best.

The definition gives us all we need to know: of the most excellent, effective, or desirable type or quality. There is no room here for decent, pretty good, or half-heartedness. The best trumps all.

The last profound attribute of this phrase is its certainty.

The best is coming, there is no might or maybe. If you believe it in the depth of your being, then it becomes your reality. If the best isn’t here yet, it means you simply have to hold on a bit longer, and it will soon arrive.

Granted, this will not be everyone’s reality. In fact, many will simply refuse to believe it. My heart breaks for them because I can see clearly what they’re missing out on. And it’s really good.

As for me and my family, the “best is yet to come” is our reality which makes it a truth in our lives, and that jazzes me up.

But this isn’t just me and my family. You and your family were also created for a purpose. I hope you see that. That purpose often gets lost in this dark chaotic world. Our adventure is cutting through the darkness to win back the purpose we were created for.

In the meantime, we don’t need to complicate it. It’s as simple as it’s ever been and it’s as simple as it ever will be. Repeat it to yourself hundreds, better yet, thousands of times:

The best is yet to come.

Why the Name Greater Than Financial? For Purpose

So many problems in the world, so many reasons to be pessimistic. No need for an exhaustive list, you’re familiar with the darkness, it’s all around us. And there you sit as a parent in the 21st Century wondering what kind of world you brought kids into, feeling helpless to truly make a difference and find prupose in this daily chaos.

That helpless feeling is one of the worst. You can identify the problems, but there’s nothing you can do. We think “it’s out of my control” or “how could I really make a difference?” And you’re right, the solutions to the world’s problems, our country’s problems, or even our local communities’ problems seem much bigger than you or me. However, we are not helpless.

We do have the power to change what needs to be changed, but the scope of the issues put us at a significant disadvantage. It means we must use every resource at our disposal to make our impact. We can’t afford more hapless attempts that merely bounce off the armor of the problems we face. It’s time to be strategic.

We may not be world leaders or even community leaders, but we do hold the keys to hope for our children’s and children’s children’s world. Which is exactly our advantage.

While there are countless forces beyond our control, we do have direct access to one of the most, if not the most, powerful forces in the universe: the lives and minds of our children. Walt Disney claimed, “Our greatest natural resource is the minds of our children.” And by who or what are those minds most influenced? Those they are closest to: their family. A family always has and always will be the bedrock of healthy societies. And he who holds the hearts and minds of a family holds the keys to the future.

So we find ourselves in possession of a power with unmeasurable potential, holding the keys to the future, and yet we’ve buried the keys in life’s junk drawer while we flip on the game or hop on Facebook. Our lack of motivation to lead our family doesn’t seem like a threat because it seems we are too insignificant to really make a difference. It’s time to start seeing that kind of thinking for what it really is: a lie. We have merely lacked engagement and failed to take advantage of the one thing we have the most influence over.

That is why I created Greater Than Financial. You see, every conversation about your resources (money) is really a conversation about what’s important to you. If we can make it simpler for you to use your resources to lay a healthy foundation for our families on which to flourish, our families will mature into productive engaging forces in our world. If enough families live with that kind of purpose we will see the positive repercussions move throughout our society.

How will Greater Than Financial be able to move families to live with such a purpose? First, eliminate the noise and distractions that paralyze us from moving our families to something greater. What would happen to your family if it became crystal clear what’s truly important to you? Why hasn’t that happened for you yet? Because in the hustle of life, you barely get time to slow down enough to eat and briefly talk together, let alone think about the bigger picture.

You need an intentional intervention, which is exactly what I plan to provide. If a family gets professional, expert help to first determine what’s truly important to them. The next step is to make a plan on how to most efficiently accomplish that purpose, clearing the path for achieving something significant. It’s a simple strategy, but with it, I think we have all we need to impact this world.

If I live to work an average length career, I’m not even out of the 1st quarter yet. So with most of the game ahead of me, I’ve realized something. If I spend my time simply helping people manage investments the potential impact will always be limited. But if I spend my time helping move families to train up their children and set the stage for world impact, that sounds like an adventure of a lifetime.

That’s why the name of this company is Greater Than Financial. I see the potential impact of the conversations I plan on having being far greater than only financial. I honestly see them as being eternal, which is the highest purpose I can imagine.