In his recent book "Stop Acting Rich... and start living like a real millionaire, " author Thomas J. Stanley, Ph.D. has surpassed his own classic "The Millionaire Next Door." Both books are excellent in my opinion, but the latter adds recent economics to the scenario.
The author makes a clear distinction between being rich and acting rich. He considers the former to be individual/couples with a high net worth, or balance sheet affluent (BA). The latter are people with high current incomes or income affluent (IA). The BA's can withstand pretty much any type of financial scenario and prevail. They also have assets that appreciate over time. The IA's are only as good as their income and often do not have money set aside for future goals. They are only as good as their income.
Stanley makes a great observation early in the book:
One clearly defined theme through out the book? The typical millionaire is not who you may think and their spending habits are vastly different than what you would expect!
Here are some millionaire statistics:
- There are just over 4 million millionaire households in America.
- In 2007, about 2.2 million American seniors passed away. Collectively, the earned more than $2 trillion in income during their lifetimes, yet only 2.6% left behind estates worth more than $1 million.
- The 'glittering' wealthy (rock stars, actors, sports figures) are NOT the typical millionaire.
- Often people who dress and drive as if they are rich are not (most millionaires drive Ford & Toyota vehicles).
- Real millionaires (male) pay about $16 for a haircut at a traditional barbershop.
- Only 5.7% of millionaires paid more than $1,000 for a suite (average price was $482).
- Top 10 clothing stores for male millionaires include: Nordstrom, Macy's, Kohl's, Target, Costco, Dillard's, Brooks Brothers, Gap, WalMart & T.J. Max
- Top 10 clothing stores for women millionaires include: Ann Taylor, Nordstrom, Macy's, Target, T.J. Maxx, Talbots, Gap, Costco, Lord & Taylor & Saks Fifth Avenue.
- Most millionaires live in homes valued between $300,000 - $400,000.
- The medium priced bottle of wine served to guests = $13.09.
- One in nine millionaires wears a Timex watch (often purchased at WalMart).
- The majority of millionaires (70%) have never owned a boat or a yacht, not even a raft.
Lastly, we live in a marketing influenced society. Many products solely exist because of advertising. The author points to Vodka as a great example. The Federal government's definition of vodka is as follows:
"Vodka... without distinctive character, aroma, taste of color."
How is it then we have 300 different brands of vodka??? Based on the government's definition - vodka is essentially a commodity & the lowest price should be the end objective. Ahhh... this is where marketing comes into play! "Our brand is #1." "Best in taste tests!" Or the Grey Goose perennial favorite, "Judge for Yourself!"
I'll be the first to admit, I'm not a vodka connoisseur. However, when the product doesn't have an aging process, oak barrels or anything referring to "10 years old," etc., what am I paying for? Marketing & brand recognition is the only way to differentiate the products. You can pay $65 for Grey Goose or purchase Smirnoff for $18.99. Your choice.