Success Classics

The Millionaire Mind
(2000)
Thomas J Stanley

The Millionaire Next Door was Tom Stanley's runaway bestseller, revealing to the world a most unexpected picture of America's millionaires. The Millionaire Mind is the more thoughtful and insightful look into the psychology of millionaires, the 'soft' factors in terms of attitudes and beliefs that have made these people so successful.

The research base was broadened to encompass an even wealthier set of millionaires (including many 'decamillionaires'). In all, the author received 733 responses to his carefully targeted questionnaires, and the sum effect of this book is a bit like being invited into the living rooms of 733 wealthy people for a fireside chat.

The key question asked: is it possible to have a very enjoyable, balanced life but still achieve millionaire status? Stanley's surprising answer is that while money can't buy happiness, millionaires are perhaps more aware than most that the best things in life are free. Rather than, as you might expect, spending their non-working time visiting glamour spots or engaging in expensive hobbies, the great majority of millionaires prefer to spend time with family and friends. If they are not doing this they are involved in community activities or playing a round of golf. As the author suggests, most millionaires are a 'cheap date' - but are not miserly personalities.

'Vocation vocation vocation'

The way to sustainable wealth and a enjoyable life is simple: do work that you love to do. The more you love your work the more likely you will excel in it, and the more rewards accrue to you. You are also much more likely to create a profitable niche through the process of deepening your skills, knowledge and contacts in your chosen area. Millionaires are happy to make a life out of truck spare parts or car washes if they see opportunities - no matter what others think.

Above all, millionaires 'think differently from the crowd' - they spend a lot of their time looking for things that others have overlooked, overturning assumptions and creating profitable niches within generic industries.

For those of you who still haven't found your vocation, Stanley comes up with this: against the conventional view that you go directly into a field after school or college, stick at it and eventually do well, most millionaires did a variety of jobs and had a good spread of life experiences before they found their vocation. Looking at the data, Stanley concludes, "It's hard for a person to recognize opportunities if he stays in one place and remains in one job.."

Risk, reward and self-belief

Stanley notes the strong correlation between the willingness to take financial risk and financial success. While most of us would see starting a business as a great risk, the financially successful see working 9 to 5 for someone else risky. You are dependent upon your employer for your livelihood, and your income is related to how much time you spend working. But millionaires tend to choose a career in which there is no ceiling on how much money they can make if they are successful at it.

The millionaires in Stanley's surveys all seemed to have one thing in common: a belief in their ability to generate wealth. People talk ad nauseam about the importance of investing in the stock market, but as Stanley rightly points out, few really think about the source of wealth: generally an idea turned into a business, initially owned by a small group of people. Real wealth creators focus on creating a prosperous business instead of gambling on public companies about which they can never have all the information. This may seem like putting all your eggs in one basket, but those eggs can be watched like a hawk.

School

A good proportion of self-made millionaires worked hard in school but were not the top students. What they learned most in school was how to judge people well and get along with them, and that hard work could bring a surprising level of success. Many were judged not intelligent enough to really succeed because they lacked the high levels of analytical intelligence or IQ to get them into medical school or law school. Yet later in life, most of the millionaires admit that these judgements only made them more determined to achieve. Knowing they would never run with the 'beautiful people', they sought to prove their worth in other ways. They became very good at dealing with people and scoping out opportunities.

People often put success down to good luck, but Stanley's millionaires rate luck quite lowly on the scale of success factors. 'The harder you work, the luckier you get' seemed to be a consensus view.

Spouse

Nine out of ten married millionaires say their marriage has been a major factor in their success. A spouse provides on tap psychological support and advice which is likely to be honest.

After love, attractiveness and sharing common interests, most millionaires chose their spouses for a certain 'x' factor: small things they noticed which indicated self-worth, integrity, even compassion. It turns out that millionaire spouses had the sort of qualities that would be helpful in running a business: intelligent, honest, reliable, cheerful. Millionaires choose their lifelong partners astutely, knowing that it will greatly affect their own success.

Every little bit helps

Becoming wealthy involves a set of habits and ways of doing things, some of which seem of minor importance or common sense but which many of us don't do:

  • Acquiring antique furniture or quality reproductions which can be reupholstered instead of buying cheaper pieces every few years.
  • Investing in better quality shoes and getting them repaired or resoled when necessary, instead of buying a new pair.
  • Buying household items at bulk discount stores. Half of the millionaires surveyed always have a list before going supermarket shopping.
  • The typical millionaire from the survey has never spent more than $41,000 on buying an automobile (a good proportion buy quality used cars at much less than this figure), nor spent more than $38 on a haircut.
  • Millionaires are frugal, but are not into DIY. They get other people to paint their house because they know their time is better spent focusing on their investments. They employ top experts to sort out their tax and legal matters. Big accountancy and legal firms cost more, but their better advice and contacts make their cost low over the long term.

Final word

The Millionaire Mind could have been better edited (many statements are repeated), but it is not for lovely, elegant prose that you will buy this book. At less than the price of a main course at a good restaurant its insights may prove an insanely good investment.

While some of the standout points of the book have been covered here, there are a multitude of revealing facts and ideas besides, including the five 'foundation stones' of financial success most often mentioned by millionaires, enjoyable case histories and anecdotes of specific millionaires. Forty-six tables display the research data in a manner that even the numerically challenged can understand.

What is the millionaire mind? Not living a spartan lifestyle and making money your god, but freedom from reliance on credit and being in control of your finances. The great self-discipline of the average millionaire means that they can't help piling up wealth long after their modest needs have been satisfied. The millionaire mind evokes the famous biblical saying, "To them that hath, more will be given." Not only do these people have money, they love their work. Most people will think 'of course they love their work, they can do what they want' - but few appreciate that it was their love of their vocation that helped to make them wealthy in the first place.

Source: 50 Success Classics: Winning Wisdom For Work and Life from 50 Landmark Books by Tom Butler-Bowdon (London & Boston: Nicholas Brealey) More Details

Now available in Audio

50 Success Classics Cover

50 Success Classics: Winning Wisdom for Work and Life from 50 Landmark Books

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From The Millionaire Mind:

"Some millionaires do feel that their IQ was a factor in their successful achievements, although most others feel just the opposite."

"They live in lovely homes located in fine neighborhoods. Balance is their approach to life. They are financially independent, yet they enjoy life - they are not 'all work, no play' type of people. Most became millionaires in one generation."

Thomas J Stanley:

Stanley has a doctorate in business administration from the University of Georgia, and was formerly a marketing professor at the same institution. One of his colleagues there was David J Schwartz, author of The Magic of Thinking Big.

Stanley's research into the affluent began in the early 1970s. His books include Marketing To The Affluent and The Millionaire Next Door.

Stanley lives in Atlanta, Georgia.



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