1. Daily
Weekly
That was not offered at a discount or a special price
Never bought a suit
Do you have a clearly defined set of GOALS? Monthly
Still well dressed
Wealthy person example Frugal lifestyle
Annual
Not at full price Purchases quality clothing
Lifetime
Take advantage of investment opportunities
Always be goal-oriented Most millionaires Goal-oriented
After funding their high-consumption lifestyles Have little money left over Many people who live in luxury
Importance of Setting Goals
High-income
Plan
Non-goal oriented types
Inherited-wealth
Goals Akin to operating a business without Operating a household without a budget
Happier than those in their same income/age cohort Who are not financially secure
Direction
Better able to visualize Future benefits of defining their goals
Resource that should never be squandered Money
Financially independent people
Grandchildren graduating from college
Planning Luxury lifestyle
Example - Visualizes
Their success after college
Budgeting Essential parts of building wealth
Food
Being frugal Wealthy people
Do you know how much your family spends each year on Clothing
If they intend to become financially independent Must live below their means Even high-income producers
Shelter
Worrying about your socioeconomic future Spend an increasing amount of your time and energy If you're not financially independent
2/3 of millionaires know High-income-producing nonmillionaires Only 35% know
Invest at least 1/3 of their pretax household income each year Have a budget Smart way
Financial Awareness Become financially independent
Difficult to accumulate wealth when one is in school
Their goal
Millionaires see things differently Domestic consumption Directly related to achieving this goal
Producing an income
The longer one postpones The longer one stays in school
Have $5 million By the time you and your significant other retire
Building wealth Education
The Millionaire Next Door - Goals
- Financial Future - Lifestyle - Helps control consumption
The greater the opportunity to accumulate wealth The earlier one starts investing one's income
Thomas Stanley Tabulating
Most experts on wealth agree
Reduces allocating too many $ to product and services Categories that are not really important
Enable you to outpace wealth accumulation Begin earning and investing early in your adult life
Do you spend a lot of time planning your financial future? Most millionaires do
Financial independence Does not automatically translate into Being a well-educated, high-income earner
Studying
Planning
Takes
Financial future Millionaires spend significantly more hours per month Planning their future investment decisions
Sacrifice
Managing their current investments
Only after he became wealthy
Buying a house
Too many high-income/low-net worth types Live from paycheck to paycheck Fearing a sudden downturn in our economy
In anticipation of becoming wealthy
Financial independence The more they spend The more income they must realize
More than twice your household's
Requires a mortgage Never purchase a home If you're not yet wealthy but want to be someday Know
total annual realized income The more they realize The more they must allocate for income taxes
Time Minimize your realized (taxable) income
Important rule To build wealth
Energy Millionaires Maximize your unrealized income Wealth/capital appreciation without a cash flow
People who become wealthy allocate their
Money By their net worth
In ways consistent with enhancing their net worth Measure their success Not by their realized income
For the purposes of wealth building Income doesn't matter that much
Ivan Staroversky - www.StarOverSky.com