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Old 12-12-2012, 01:03 PM
 
Location: Living on the Coast in Oxnard CA
15,346 posts, read 25,380,082 times
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Currently reading the book "The Middle Class Millionaire" by Russ Alan Prince and Lewis Schiff. Finding it an interesting read. The book delves into the differances between the average middle class person and the middle class millionaire, meaning that they have a net worth of between $1million and $10million (Including their home, which is not something I would normally entertain, but i will go with it.)

This segment of the population takes in some 8,000,000 homes and will swell to 20,000,000 homes by the end of this decade. The book mentions the fact that it is this population segment that drives the economy. They talk to others about products that they like or services that they use, more so than any other segment of society. One example given was of the car maker Tesla, makers or the Tesla Electric Sports car. The company claims that the reason electric cars were never popular or successfull is that people of affluence would never buy one of them. These companies were trying to sell to the lower classes. What Tesla did was create a car with a market value of $98,000 and they made the car fun to drive and nice to look at. The company has a plan to bring out lower priced versions of the car untill they can make a profitable low priced car for the masses. The idea is when those with money buy into it sales are made that can support building many more models that are affordable for all.

Tesla is not the first to use that way of selling things, many companies realize that the wealthy middle class is the gate keeper to get a product produced and sold.

What do you think?

Personally my thoughts are that the middle class has infact moved up the financial spectrum and to be part of it you would need a modest amount of cash. When middle class incomes are $80K, $100K or more then it is not hard to see that someone could over time get to the million dollar point. The book does point out the fact that the majority of the class does in fact own a business. The large majority are home owners who value time spent with family and experiencing life with those that they love. Vacations for them are a means to spend time with family. Additionally vacations and free time are spent improving their life and not so much for relaxing or having a good time. Like me, most live for Mondays and can't wait to get back to work.

I am happy to share some of the traits that make up the Middle class Millionaire. My goal is to learn from them and become one of them. (I wouldn't mind exceeding the $10mill mark and can find a way to live with myself if I make it to that point.)


What are your thoughts?

1. What do you think of studing someone else to find out how they did it?

2. Do you read up on the affluent to see what you can do to mirror them?

3. Has watching others or reading about them changed your view on wealth creation?

4. What specific things have you changed in your life to become a middle class millionaire?

Last edited by SOON2BNSURPRISE; 12-12-2012 at 01:48 PM..
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Old 12-12-2012, 01:33 PM
 
Location: None of your business
5,467 posts, read 3,611,784 times
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Quote:
The idea is when those with money buy into it sales are made that can support building many more models that are affordable for all.
So you are waiting for the rich to buy first?
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Old 12-12-2012, 01:35 PM
 
1,344 posts, read 2,230,375 times
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Quote:
Originally Posted by SOON2BNSURPRISE View Post
This segment of the population takes in some 8,000 homes and will swell to 20,000 homes by the end of this decade.
That number surprises me as I'd expect it to be A LOT higher.

Most everyone I know falls into that group although a few may need to include their house.

IMHO, and in my experience, middle class millionaires don't get there by spending $100K on a car which will obviously go down in value. Instead, they but $20-30K cars (that may also be used for business) and invest the other $70-80K in business, real estate...
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Old 12-12-2012, 01:49 PM
 
Location: Living on the Coast in Oxnard CA
15,346 posts, read 25,380,082 times
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Quote:
Originally Posted by RyanR View Post
That number surprises me as I'd expect it to be A LOT higher.

Most everyone I know falls into that group although a few may need to include their house.

IMHO, and in my experience, middle class millionaires don't get there by spending $100K on a car which will obviously go down in value. Instead, they but $20-30K cars (that may also be used for business) and invest the other $70-80K in business, real estate...
Sorry I wrote the wrong number. Changed it to 8,000,000 households
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Old 12-12-2012, 01:55 PM
 
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I know a lot of millionaires, many with a net worth above 10mil. I don't know anyone who would spend 100k on a car.
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Old 12-12-2012, 03:24 PM
 
Location: Living on the Coast in Oxnard CA
15,346 posts, read 25,380,082 times
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Originally Posted by hml1976 View Post
I know a lot of millionaires, many with a net worth above 10mil. I don't know anyone who would spend 100k on a car.
Wow, really? I know lots of millionaires as well and they do infact drive cars in that range and higher.

The point though is not the car but in determining what group drives the market for consumable products. The lower classes are not the first on the block to get a fast computer, flat panel tv, computer, or anything else on the market. It just does not happen. Those with means help a company develop a product and pay the cost for that development. When the company is able to sell an efficiently designed and built product sales move to the larger less afluent classes.

Why does anyone need a $100,000 car or a $10,000 bike to peddle around on? The reasons for buying are very differant for the Middle class millionaires than for the lower classes. In the book you learn that more and more wealthy individuals purchase items and services that help them accomplish more in the most efficient manner. They purchase items that help them achieve their goals, make them more money, or increase their quality of life. I would asume with an electic car it could be that they have the desire to place less presure on the environment by forgoing the use of fossil fuels. Reading the book you realize that their is a completly differant mind set as to why this group seems to relate to the purchase of items and how they choose to use their money.
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Old 12-12-2012, 03:28 PM
 
48,521 posts, read 80,468,402 times
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Being worth totally a millio or mroe and have instant asscess to welth are two different things. But I saw where the IMF said that thsoe over 50 own 90% of the wealth in the wporld. that also doesn't surprise me.
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Old 12-12-2012, 04:04 PM
 
5,034 posts, read 3,287,636 times
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Quote:
Originally Posted by hml1976 View Post
I know a lot of millionaires, many with a net worth above 10mil. I don't know anyone who would spend 100k on a car.
I'd spend 100k on a car.

But it sure wouldn't be from Telsa.

Quote:
Originally Posted by eRayP View Post
So you are waiting for the rich to buy first?
Rich are always the ones who buy new technology first. It takes time for costs to decline.

Also a good idea to wait a few years on new stuff. Lets them work out the kinks first.
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Old 12-12-2012, 04:23 PM
 
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I am working on becoming a millionaire, but have a ways to go. Currently, I can't fathom a net worth of $10M, but if I keep working hard, then maybe someday. I believe I make a good income for my age, and prefer to not spend much on stuff. Right now it's about cutting the liabilities, e.g. my student loans.
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Old 12-12-2012, 05:38 PM
 
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How do they determine they are still middle class with 7 figure net worth? Yearly income? Lifestyle? When would they start to be considered upper class?
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