5 Lessons I’ve Learned By Working with the Millionaire Next Door

There Is A Good Chance Your Neighbor May Be A Millionaire and You Don't Even Know It.

The phrase "Millionaire Next Door" comes from a book of the same title written by Thomas J. Stanley and describes the habits of wealthy, yet humble millionaires.

These millionaires fly under the radar.  And they could be living right next to you.

In my career, I've worked with hundreds of them.  Almost all lived up to the stereotype of humble, hard working, and rationale individuals. Most importantly, almost all understood that wealth takes time to create.

Over time, you start seeing the same personality traits, financial decisions, and strategies pop here. Here is what I found most of them have in common:

#1: They Didn't Become Millionaires Overnight.

In most cases, it took not only years, but decades.

They started as most do: graduated college, got a first job, had student loans, purchased their first home and started a family.

In their early years, their net worth would give most no hope of becoming a millionaire. But they grinded it out.

Almost all had no initial goal to become a millionaire. They just practiced good financial habits: live within your means, save 5% to 10% of your salary, and stay the course with consistent investments. The snowball affect happens.

Next thing you know, decades later, you are a millionaire.

#2: They Practice A Save First Budget.

This is probably essential to building wealth.

Instead of budgeting your expenses and finding what you can save, they budget their savings and find out what they can spend.

It makes a huge difference.

You don't need to save a crazy amount either.  If you start early enough, saving 5-10% of your income can put you in a great position.

The key is prioritizing saving over spending.

#3: They Rarely Move.

Most have lived in the same home for decades.

This parlays into number two above of spending only what you can afford after saving.

For most, even though they may have been able to afford a larger mortgage, it would have come at the sacrifice of their savings plan.

So they just stood pat.  They found creative ways to enjoy their home without having to upgrade.  

#4: They Are Extremely Rational.

They are a hard group to convince to make an impulsive purchase or overspend.  

I like to say they have emotional stability which is an invaluable trait when dealing with money.

They don't get spooked by markets going down.  They understand it is part of market cycles.

They don't get jealous of what others around them are doing.  They are content to living their own life.

They don't take on credit card debt.  Most have been debt free (outside of mortgage or student loans) their entire life.

In other words, they let stock markets work for them, judge themselves with a personal benchmark and live within their means.  

#5: They All Have Trying Times To Tell You About.

Getting to this point has taken decades of good habits.  But it's also been a rocky road.

The stories are abundant.  Working two jobs, no vacations, moving in with their parents, or weeks eating top ramen.

Each story puts in perspective that there is no get rich quick lotto ticket.  It just takes patience and hard work.