Congratulations to R.S. He stopped acting rich. It is often difficult to cast off the habits of the hyper consuming, income statement affluent [those who have high realized incomes but little accumulated wealth]. It is especially hard to do if you were raised in that kind of environment. He accomplished this change by going almost cold turkey. Here are some of his thoughts and revelations which may be useful to those big spenders out there who genuinely want to adopt the ways and means of the millionaire next door types.
Thomas Stanley Ruined My Thinking
I’m writing to thank you, for you may have saved my financial life. Let me explain. . .
It seems that things that used to impress me, like nice cars and big houses, now turn my stomach. Just the other day I found myself alongside a beautiful new Ferrari on the freeway. When I caught myself thinking, “What a waste, I could buy 3 cash flowing rental properties for the price of that car,” I knew I had crossed a threshold in my life. Indeed, all that glitters is not gold.
Growing up I thought we were rich. It turns out that my dad was just good at maneuvering the apostles. Dad’s now age 60, broke, still working, and living in a place he doesn’t own, with nothing planned for retirement. Needless to say, I took a lot of my spending cues from him. Like many people, I bore a lot of detrimental consumption habits that were brought to light with the latest recession. “What do you mean I can’t use my house as an ATM?
I’ve read Millionaire Next Door. I’ve read Millionaire Mind. But Stop Acting Rich compelled me to read it 3 times, almost consecutively. It really spoke to me and the way I had been living my financial life. Stop Acting Rich was a wake up call for me.
In it, you asked a very profound question: “What happens when the badge [status products] becomes the achievement?” A question that caused me to give serious consideration to what I needed to do to not end up like my dad, someone who still thinks badges of success are important.
I thought I had made significant progress when I opted for the $49 Timex instead of the $13,000 Breitling I thought I had to have. I was also proud when I decided not to trade in my 7 year old Toyota 4-Runner, which has over 100,000 miles on it, for a Porsche. “If it’s good enough for Stanley, it’s good enough for me” became my motto.
Now in just 18 months I’ve gone from negative net worth to over $300,000. For age 37, I’m still way behind your WQ [Wealth Index: actual over predicted net worth given one’s age and income, see p. 18 in Stop Acting Rich], but I know I’m headed in the right direction. I’ve stopped acting rich and started living like a real millionaire.