I was delighted to learn of one of my reader’s (Mr. RK) transition from being a member of the income statement affluent segment to one in the balance sheet affluent population. Congratulations!
The examples (of income statement types) are endless. My personal example was similar. Professionally, I’m an engineer. I’m really good at math and people pay me to solve problems. Financially, I sucked. That’s a hard thing to have to admit to yourself, especially with my (high) income and profession where ‘I know all the answers.’
Most engineers are members of the balance sheet affluent segment. In Stop Acting Rich, I suggested that engineers often make excellent role models for those who are interested in accumulating wealth.
. . . look to the buying habits of wealthy engineers. They are much more about function then style, more interested in the important physical attributes of competing brands than the high prestige and fashion that marketers often spend millions and millions of dollars trying to associate with their brands.
In Stop Acting Rich, I also mentioned:
Tom drives a (Honda) Civic (his 4th to date) yet he is a very successful mechanical engineer and investor. . . invented the Dumpster and other innovative products. . . believes that the Honda Civic epitomizes outstanding engineering, design, efficiency and value.
And Tom is not alone. In the book, 13% of engineers who are millionaires drive Hondas.
I also profiled Carlton, a chemical engineer/business owner (worth over $30M). His guests drink what he drinks, moderately priced Crawford’s scotch which comes in a plastic bottle and/or $8 to $10 wine he buys at supermarkets and warehouse stores. Carlton drives a Toyota and wears a Seiko watch.
- Wealthy engineers tend to keep their motor vehicles longer – 5 years and 7months-than the median for the millionaire population in general- 4 years and 4 months. Overall they pay about 11 percent (median) less for their vehicles than do typical millionaires.
- Within the same wealth, income, and age cohort, engineers who are millionaires tend to live in neighborhoods where the median price of a home is about 12 percent lower than for the entire millionaire population.
- Overall, engineers produced about 22 percent more wealth per dollar of realized income than millionaires in general.
- About 1 in 13 (7.6%) of all male decedents with a gross estate of $1 million or more was once an engineer. This is 3.3 times the expectation.
How did Mr. RK, the engineer, cure his bad case of the “spends?”
. . . Dave Ramsey’s course changed my habits and your book (The Millionaire Next Door) cemented it into our family’s culture from here on out . . . .
There are many worthwhile features of Dave’s programs. The live interaction with others who seek to become financially independent is one of them. Plus, in a group/classroom setting, you will never “feel like a freak” when you go adopt a frugal way of life. Countless people who become balance sheet [millionaire next door] types have told me that they now know that our family’s low consumption lifestyle is not indicative of some deviant personality. Now I know that we are not alone; others want to be transformed from income statement to balance sheet affluent.