The Millionaire Next Door

The Millionaire Down Under

I have found that wealthy people who have a modest consumption life style tend to be generous in giving to noble causes.  The following profile of John Adu (Australian Down Under) is yet another example of this.

I have been unable to escape the uncanny similarities between my own circumstances and the things described in your books.  You can make your own judgment from the following:  I am 62 years old; my wife is 54;  our family’s realized pre tax income from all sources (no inheritance) last year was $1.15 million;  our net worth is $22.0 million (after deducting a recent $100,000 inheritance), and I regularly give around one tenth of my annual income to religious or charitable causes including support of overseas orphans and scholarships.

Our circumstances which bear an uncanny resemblance to your “prototypical American millionaire” are:  my wife is a teacher by training, however, she spend most years of upbringing our children in the home; over 90% of our family income comes from the principal breadwinner; we are both first generation affluent; we live a long way below our means; we pay cash for our cars; we borrow money to buy real estate and invest in shares, never to buy depreciating asets; we are frugal (though not as frugal as we used to be); I could retire tomorrow and live off my investments indefinitely; I am a member of the Institute of Chartered Accountants in Australia (CPA equivalent) but I am part owner of an investment company and work on average 50 hours per week in my business; I spend a great deal of time evaluating investments; my wife and I have been married 35 years (first marriage); my wife and I have a very strong faith and worship weekly, and I am mistrustful of mass movements and am a decidedly contrarian investor.

Perhaps a most telling circumstance is that our wealth has been accumulated overwhelmingly since I turned 38 years of age.  For the 15 years prior my stipend covered the bare necessities of life.  Any capital I had to work with came from investing wisely the extremely modest savings I accumulated while studying to be a chartered accountant.

My interest in investing grew from my earliest years as a trainee chartered accountant, and I have preserved an annual personal statement of Assets and Liabilities since my first working years.

My net worth on 29 Feb. 1968 was $1,935.40 and the balance sheet of that date discloses the rather unusual but highly pertinent fact that after I started work I bought my first share before I purchased my first motor car.  This was simply because my father was a construction worker for 37 working years and spent his life working for his money.  I was determined from the commencement of my working life to have money work for me!!!

Among the high income population giving and building wealth are not substitutes.  On the contrary  they are complements statistically.  Why?  Because generous people get much more satisfaction from giving than from hyper consuming.  Living well below their means enables them to contribute to noble causes while at the same time contributing to their investment portfolios.

2 thoughts on “The Millionaire Down Under”

  1. Love this statement— “Among the high income population giving and building wealth are not substitutes. On the contrary they are complements statistically. Why? Because generous people get much more satisfaction from giving than from hyper consuming.” This whole article is a reminder to me of how I should live not only to get, but to give.

  2. I completely understand the idea of giving. I myself get more joy from putting down a $14 tip than paying for the thirty-five dollar steak. I am really curious as to whether giving money was a part of life before the millionaire became a millionaire. I can clearly understand why hyper consumption gets old – but isn’t this much more true when you have a multi-million dollar net worth? Is there evidence that these great men and women were tithing/giving well before their million-dollar net worth caught up with them?

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