I love to read articles about financial advices or tips on how to handle financial crisis. Among those articles I have read include "The Millionaire Next Door".
I'd like to share a few excerpts from the book which I believe would really help readers out there and be able to learn a lesson or two...
To build wealth: (a) minimize your realized (taxable) income and (b) maximize your unrealized income (wealth/capital appreciation without a cash flow).
Efficiency is one of the most important components of wealth accumulation.
Simply: People who become wealthy allocate their time, energy, and money in ways consistent with enhancing their net worth.
Begin earning and investing early in your adult life. That will enable you to outpace the wealth accumulation levels of even the so-called gifted kids from your high school class. Remember, wealth is blind.
Planning and controlling consumption are key factors underlying wealth accumulation.
Money should never change one's values. Making money is only a report card. It's a way to tell how you're doing.
Building wealth is not something that will change your lifestyle. Even at this stage of life, I don't want to change the way I live.
The more dollars adult children receive,
the fewer dollars they accumulate,
while those who are given fewer dollars accumulate more.
I am not impressed with what people own. But I'm impressed with what they achieve. Always strive to be the best in your field. Don't chase money. If you are the best in your field, money will find you.
My Personal Realizations
When you generate a high income, it doesn't mean you have to spend every bit of it (high income = high costs). You still have to stick with your (low) costs -- the same costs you had when you're income is still 5-digit or less. Extra income (income - costs), must be put into investments and/or savings.
Attitude matters: goals, discipline, hard-work and frugality.
