More from our millionaire next door in the Southwest – Part II of the Millionaire Next Door story I received last month. We read in Part I that our “scientist of wealth” became a millionaire while his annual income was $78,000 and now has a net worth of $2.4 million. He and his wife did not/do not act rich, and continue to enjoy the freedom that comes from living below their means.
A Letter from a Scientist of Wealth, continued
September 2009
…Paying off the mortgage was about the smartest move we ever made, because it allowed us to save that money, too. Whenever we got a windfall in our married years (for example, not having to pay mortgage money every month) we didn’t go to Vegas, we put it in the bank. OK, we went to Vegas once, it was pretty disgusting. Live and learn. Over the years, we have thoroughly enjoyed traveling. We have been to virtually every state, also to Mexico, Canada, England (3 times), France, Greece, Italy, Spain, Egypt, and Turkey. When our child was young, we camped out a lot in National Parks. We don’t do that any more, but when we travel we use a “Rick Steves” approach, and I feel we can spend less on two weeks in Paris than most families spend in one week at Disney World.
I purchase only new cars (except for a couple bought for teenagers), selecting exclusively from Consumer Report’s “High-Reliability” models, and I keep the cars about 10 years. $21,000 is the most I ever paid for a new car. Most of our cars have gone the full ten years without anything other than the most basic, routine maintenance.
I think I paid $67 for a pair of shoes once, and my watch is a Timex. We have a houseful of furniture that is comfortable to us (and even gets some nice reviews). By not being drawn into corporate management, I have avoided the purchase of $500 suits and luxury cars. A little-known benefit of avoiding corporate management is that I don’t have to lie in my line of work. My wife has shopped at thrift stores for many years, and uses coupons extensively. I generally won’t order a pizza without a coupon. We eat out twice a week, once at a “sit-down take-your-time” place, and once at McDonald’s or Burger King! We have a health-club memebership and a nice yard. Since we have chosen to live somewhat below our means, it is not as hard to keep up with the Joneses in our neighborhood. We don’t have any granite countertops, and some of our floors are VINYL. There are some UAW’s on our street, one of them has a $50,000 boat and 5 luxury cars. Since I’m not a lawyer or doctor, I don’t work 80-90 hours per week. So time is NOT ALWAYS money with me, as it is with many of your millionaires. Things I don’t do: Paint the exterior of the house Go up on the roof Overhaul my transmission Buy things on the phone Return the phone calls from stockbrokers We paid all the expenses of our child’s undergraduate school, but she was on her own for her graduate degree (which she has happily completed in record time).
We crossed over the million-dollar mark in 1999; let me point 
out that we sprang for FRENCH champagne, the first bottle we ever had. For the mortgage pay-off, we used a California “Sparking” wine”. 🙂
We lost about 25% in the recent meltdown, not as bad as many people due to mostly proper diversification for our age. But still very scary. We’ve probably gotten 15% back in the last year’s runup. During the downturn, we continued to invest, heavily at times.
I enjoy your books, please bring forth some more. Maybe one on “poor” millionaires like us….under $5 million; gained through working-man wages only??? I think that book would have a very wide appeal.
Thank You,
D. Termined
Dear D. Termined,
I’m on my way! Here I come! We’re in the process of paying off our house. We send everything to the house, camp for vacations, clip coupons, BUDGET, pay for things in cash, etc. I appreciate your letter because you are me — in 20 years.
Sir,
Your perspective on your career was a real eye-opener. Your decision to avoid management yielded an epiphany – that it’s not possible to out-earn bad spending habits.
Dear D. Termined,
Far too many people in this country believe that just “going to college” will raise their financial prospects. You obviously chose the “right” career. At the risk of offending someone’s politically-correct views; science, math, engineering, medicine and MIS can lead to higher wages. Education, clergy, architecture, psychology, and liberal arts usually lead to low wages. Many students who choose “psychology” as their major
will wonder their whole lives why they cannot get ahead.People need to be honest with themselves up front, and realize they are locking themselves into a life of struggle when they skate through college after choosing one of these “degree paths.”
Dear D. Termined,
Far too many people in this country believe that just “going to college” will raise their financial prospects. You obviously chose the “right” career. At the risk of offending someone’s politically-correct views; science, math, engineering, medicine and MIS can lead to higher wages. Education, clergy, architecture, psychology, and liberal arts usually lead to low wages. Many students who choose “psychology” as their major
will wonder their whole lives why they cannot get ahead.People need to be honest with themselves up front, and realize they are locking themselves into a life of struggle when they skate through college after choosing one of these “degree paths.”
Dear D. Termined,
Your story is truly inspiring, as are all of the stories of the millionaires Dr. Stanley writes about. Kudos to you, sir.
Robert,
While I agree with you that simply attending college and graduating isn’t a foolproof strategy to being successful, I disagree with the assertion that students who choose majors such as psychology, education, clergy, architecture or other liberal arts are dooming themselves to low wages. I’m not entirely sure why you included architecture, which tends to be a generally well-respected and high earning career in that list, but I’ll move on. Earnings are a reflection of application, and a particular field of study doesn’t necessarily guarantee nor does it inhibit one’s ability to produce a high income. For example, I have a B.S. in psychology and leveraged that knowledge of behavior into a successful sales career where I produce an income just under $300,000/yr and have done so for many, many years. Others are not so successful, and I fully acknowledge that I may be an outlier, but the fact remains that I used a particular specialized skill I studied during university to serve as the foundation to a lucrative career. I’m of the opinion that those who enter a field of study simply because they cannot think of an alternative or because they think it will get them through college with minimal study are doomed to a life of low earnings as opposed to the major of their choice determining that outcome. I know plenty of people with liberal arts degrees such as art history that are struggling to get by, but at the same time I know plenty more that used their specialized knowledge to start a successful business or even successful consulting careers. It isn’t what you know so much as how you choose to apply that knowledge.
Robert –
“Education, clergy, architecture, psychology, and liberal arts usually lead to low wages.”
If you pay attention to Dr. Stanley, one of the very clear correlations he makes is that it isn’t how much you earn, it’s how much you keep. I seem to recall that he mentions in one of his books the fact that school teachers are represented to a good degree in his research.
If your road to wealth includes seeking out high paying careers, you should read TMND again…
Hi there,
I have a question. I have read your books and loved them. Question – how different is Canadian’s behaviour from the US as you described in your book?
Thanks
Jennifer
Great Story! Love it! Yet this scientist still has a nice income $78,000 + his wife works. Have you found many families who earn under $40,000 per year reaching the millionaire mark? That may be an even better book.