The Millionaire Next Door

A Lesson in Financial Independence

I lived for a few years like no one wants to so that I can live for the rest of my life like no one can.

This is the basic success formula recently reported by one of my readers.  In the following paragraphs, another reader, Honey, paints a similar picture of how her mother became a multimillionaire.

I was raised by a single mom who immigrated to the US in the early 1980s . . . did not speak or write English very well . . . perhaps the most frugal person I have ever known.  She ran the family household like a miserly CEO, by cutting expenses . . . .

The money that her frugal mother saved was immediately plowed back into the family’s business ventures, the first of which was a restaurant.  Honey explained that she and her siblings worked enthusiastically . . . in our family run restaurant [begining in] grade school . . . .  Honey’s mother also saved money by shopping for her kids’ clothing, as well as her own, at a variety of thrift shops, Goodwill stores, and selected flea markets.  In spite of this no one in the family ever thought that they were disadvantaged or financially poor.  While building wealth, the family perceived itself as being in transition, between modest means and wealthy.  Thus they never felt degraded wearing the clothes purchased at thrift stores. 

Later her mother bought the building that housed the restaurant.  Then over time she bought more and more income producing real estate.. . . eventually acquired several shopping centers and then retired a multimillionaire. Presently Honey’s mother is enjoying a life of leisure as do most financially independent senior citizens. 

Keep in mind that not all people who patronize Goodwill type stores are at economic ground zero.  Some are are entrepreneurial commandos.  They are intent at building a business and ultimately wealth by living a spartan existence.  Some “live in the factory” to save money, i.e. living behind their restaurant, below it, above it, etc.  Plus they can eat the food produced by the business.  Come to think of it no wonder that so many farmers have high WX scores. 

Honey’s purpose in writing to me was not to criticize but to praise her mother, a loving and nurturing parent.  Yes, she was frugal regarding consumer products but not when it came to funding her children’s college educations, etc. 

Honey and her siblings recognized that their mother had a dream for the family.  She sought financial independence.  Plus her children recognized that no one worked harder, longer hours and spent less on themselves than their mother.  She was an inspirational leader.  

She taught me the value of true character was not in how one “spent” money and allowed money to change them, but how one can do truly great things by accumulating money and treating others fairly.  There is no task too undignified as long as it’s an honest day’s work. 

What can be learned from Honey’s mother’s method of building wealth?  You should discipline yourself to focus on where you are headed.  Hold on tightly to your dream of becoming financially independent.  View living a spartan lifestyle as temporary, merely a prerequisite to joining the ranks of the socioeconomic achievers in America.

7 thoughts on “A Lesson in Financial Independence”

  1. Thomas,

    Do you think a person can come to these conclusions later in life (I’m almost 40) and still end up doing well? or is it too late, by that time?



  2. Aaron,

    It’s up to you. Only you can decide if you will be financially wealthy in the time you have left. With people lving well into their 70’s and 80’s I’d say you have plenty of time left.

  3. It’s never too late, Aaron. You could have done a lot better starting much younger, but so could a lot of us. You’ll just have to go some to catch up. (I was a lot older than you are when I got enlightened!)

  4. It is not too late for you to start. I have, and I live in southern California, a high cost of living area with high taxes.

    I started saving at age 40. At age 61 I have a paid off house, no debt, and slightly over $500,000 in retirement savings.

    Add my house into the mix, and my financial net worth is slightly more than $900,000 and climbing. This is in spite of two of the most brutal bear markets in the history of the United States of America in 2001-2002 and 2007-2009.

    This was done on a federal civil service salary that ranged from $28,831 per annum in 1989 to $97,082 per annum today.


    Rodger Morris

  5. It is hard to turn it around but last December I found myself around 50k in Net Wealth which was due to over 30k in consumer debt. I am now down to my last 10k in consumer debt(car loan) which is planned for payoff in the Spring and my net wealth has more than doubled. This is all in 10 months. Therefore I say it is definitely not too late.

  6. Aaron:

    Colonel Sanders fried his first chicken in his late 60s.

    My own father went wealthy, broke, wealthy, broke, wealthy, by the time he was 55.

    In answer: yep!

    Reading Tom’s blog puts you on the right path!

  7. I, too, grew up going to the Goodwill with my mother. She bought lots of her children’s clothes there, pieces of well-made furniture that are now considered antiques, and several of our favorite Christmas presents. (I only learned where she got the gifts after I was grown.) For my mother, it was an exciting treasure hunt. One of the books she bought that I now own is a copy of Milton’s Paradise Lost published in 1901 and illustrated by the famous French artist and engraver, Gustave Doré. Today, it is a collector’s item. I doubt that she paid more than 25 cents for it in the 1950s.

    Presently, I shop for my clothes at thrift and consignment stores and, yes, the Goodwill. I am slender and am amazed at the namebrand clothes in excellent condition I am able to find in my size. Apparently, women outgrow their stylish clothes before they wear them out. I dress fashionably and have the money to buy my clothes new, but when you can find perfectly good things at bargain prices, it makes no sense to pay more.

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