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No wonder millions of folks defaulted on their loans. Lot of folks buy high when they get a high paying job but what about the rainy day fund? What if you lose your job?
and they do live in a middle to middle-upper class neighborhoods and drive a modest vehicle?
Another good book on the subject that is less preachy and more focused is The Difference: How Anyone Can Prosper in Even The Toughest Times , by Jean Chatzky. She zeros in on the most essential financial and non-financial habits that benefit people in their careers as well as money management.
But this idea of the "frugal millionaire" was sold by a particular silly book. Its amazing that so many people think that a book that looks at a handful of people actually would tell you anything about the world in general. There are certainly "frugal millionaires", they are usually people with strong personalities that grew up in prole families that gained wealth later in life. But that is not representative of most rich people.
Your last statement is simply not true. More than 80% of millionaires are 1st generation--didn't inherit money or inherited very little.
Both Millionaire Next Door and the more recent book The Difference by Jean Chatzky say the same thing.
and they do live in a middle to middle-upper class neighborhoods and drive a modest vehicle?
That is VERY true... One family I knew - multi millionaires... lived in a modest middle class neighborhood, didn't live lavishly, drive nice vehicles... another family I know... the husband drove a beat up POS to work every day because he still likes his truck.
on the upper scales of the wealth system.. I have a friend who is a blue collar worker - lives in my nieghborhood - owns 4 houses! - him and his family are not struggling!
The upper wealthy (millionaire or close to it) don't live lavishly, and DO live frugally... but these people aren't "showmen" - they don't have to do the "oh my gosh, you aren't wearing x designer???"...
It depends on what your priorities are and what you enjoy in life. My parents are quite well off but they don't live extravagantly. They are retired snowbirds who spend 8 months in Iowa and then 4 months in Arizona. Dad drives an F-150 and mom has a Lexus. They're happy, they have nothing to prove to the world so they just enjoy their life.
It seems only people who are insecure about themselves find the need to prove their wealth. You're just asking to get mugged or robbed if you flaunt what you have. Life isn't about "keeping up with the Joneses", as long as you're happy then what else matters?
A neighbor of my parents in Scottsdale is quite wealthy, but very lonely. He's in his 60's and when they met him, he was trying to fill a void in his life with 'stuff'. He had fancy cars, expensive clothing, ate out at upscale restaurants every night because he didn't have any family or real friends to share his life with. This was quite a few years back but after my parents befriended him, he seemed to completely change his life and you could tell he was MUCH happier than he was. He stopped buying buying buying and now enjoys playing cards on a Sunday afternoon with them as well as just stopping over and shooting the breeze with my dad. He sold his 5 or 6 vehicles and now has just a Lexus. He doesn't eat out by himself, he's been at quite a few of our family gatherings over the years because he doesn't have anyone else to share the holidays with. He's a great guy to be around and talk to.
It isn't what you have, it's who you have to share it with. Money can't buy happiness.
A neighbor of my parents in Scottsdale is quite wealthy, but very lonely. He's in his 60's and when they met him, he was trying to fill a void in his life with 'stuff'. He had fancy cars, expensive clothing, ate out at upscale restaurants every night because he didn't have any family or real friends to share his life with.
I have had a couple of friends who have done that after their wife passed away. It is usually a sign for his friends to step in and help him get help.
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