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May 18, 2012

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This blog post is essential reading, in my opinion.

Maybe a missing part of the list above is the right attitude toward money. That is, having means is a better situation to be in than being poor. I think this fits into number 3 but it is slightly more than what is said there. What I am trying to say is, having money is not a bad thing. Go out and get some. Win with money.

I liked the millionaire next door and I'll see if the millionaire mind is available at the library. It sounds interesting. I have a supportive spouse and that's probably my strongest point. In the past I did very well with discipline and social skill, but I think those things have deteriorated quite a bit since college. Looking forward to reading this book.

Amen! Thomas Stanley also published "Stop Acting Rich: ...And Live Like A Real Millionaire". It was published more recently (2009). It's sort of a rehash of the original Millionaire book, but good. I see you can pick up a good used copy on Amazon for less than $7.50.

I concur totally with the points raised in this article.

1) We still live well below our means. When we look back we see that we used to spend a lot more freely when we were worth a lot less. I am not sure why except that our "wants" are neglible these days.

2) I now manage 15 Fidelity accounts including ours and those of our three children. It's not a lot of work but it's a lot of responsibility because they total 8 figures and each have nice gains.

3) Social status has never been important to us, though living in a beautiful home in a great location and with a lovely garden is, especially since my parents were renters their whole life.

4) When I left home the day I got married I was giving my mother half of my paycheck for my board and keep - unheard of these days in the USA. I received BS and MS degrees without ever being a full time student and without any parental help.

5) Our two daughters are both multi-millionaires, our son is getting very close to his first million.

6) I am no longer targeting market opportunities but I took full advantage of a great opportunity soon after I retired and marketed a mutual fund analysis program to 1601 customers of the commercial database that I use every day.

7) I was fortunate in deciding to become an aerospace engineer and never had a single day of unemployment and never a year without a nice raise - thanks in large part to the arms race generated by the Cold War with the USSR.

I cannot overemphasize the fact that I wouldn't be where I am today without my loving and supportive wife that I first met in 1950 in England and have been married to since 1956, the year we emigrated, first to Canada, then to the USA.

I totally agree with points raised in this book.

Most important factors for me were:

1. Choice of spouse

2. Working to develop a career than happens to pay well.

3. Living well below our income (need 1 & 2 to get to this point).

-Mike

I work hard and am frugal. But I'm not married and did not choose the right career. I guess I'm screwed.

Melissa,
You didn't say what career path you chose. There are quite a few good ones. Healthcare is a great field with the US population aging, new technologies coming along all the time, and no danger of your job being outsourced to countries with low labor rates. You also don't have to have an M.D. to have a really great and secure job in that field, often junior colleges can provide the needed qualifications.

These days I would also be taking a good look at jobs in any branch of government, be it city, county, state, or federal. They still provide good benefits and pensions and are not nearly as prone to layoffs as companies that have to show a profit.

I chose graphic design. Actually, I fell into it by accident, but it's been my career for the past decade.

"I have always succeeded by hard work, not raw ability."

Funnily enough almost everyone who succeeds says this. Not sure there is 'raw ability', merely people who devote an exceptional amount of time to a particular subject. If you work really hard at being an artist you'd probably end up pretty good if you worked hard and efficiently at improving yourself.

Something else just occurred to me. People can talk of picking the wrong career, but I think if you gauge wrong career choices, Ray Mears wins hands down with a stupid business idea (http://www.telegraph.co.uk/finance/personalfinance/fameandfortune/3171810/Ray-Mears-My-bank-manager-told-me-to-get-a-proper-job.html) and look at him now.

Rob: I think that's the expected, humble, thing to say. It takes a sort of arrogance to say that your talent is so far above everyone else's that it has propelled you to success without requiring as much work as those around you, even though, in many cases, it's probably true.

The only somewhat-of-a-counter example I can come up with is that I remember hearing that tennis great John McEnroe claimed that he had more talent in his little finger than his rival Ivan Lendl, but that Lendl worked harder at tennis than McEnroe ever would. That was probably just trash-talk.

Even if you're born with talent, developing that talent into something useful takes hard work.

MattJ: I'm just trying to think what you can be born with to make you a better tennis player... better eye to hand co-ordination? More agility? I'm not convinced, I suspect key early developments at a very young age where we are very responsive are mistaken for talent.

I agree that living below your means is essential. I rented this as an audio book through my work a couple years back and it had a lot of great material in it. I highly suggest it to see how the normal millionaire thinks.

I agree with Mike that choice of spouse is important -- tremendously so. Romance is great (and necessary), but choosing a life partner with some practical things in mind makes all the difference as to whether your life partner is really for life.

Financial compatibility is essential. If you and your spouse have differing values, beliefs and behaviors around money, at the very least you should be willing and able to set common strategic goals and then compromise on the tactical stuff (the nitty gritty of how to go about achieving those goals). Otherwise, I feel like there would be a lot of unnecessary unhappiness in your life together.

P.S. I have been married (to the same person) for 19-1/2 years. :-)

EM,
Among my children's acquaintances I have known a few dating couples that made a "Mistake" and then "HAD" to get married because of family beliefs. These marriages often ended in divorce, and we all know the financial and emotional impact that can produce. When I was dating back in the early 50's things were very different. Even when I left England in 1956 there had never been a divorce in either of our extended families - it just didn't happen. Another thing that never happened in my youth was "living together", that would have been an unthinkable family disgrace even in the unlikely event that the couple could afford to move out. The boy's high school that I attended had a student body that was 99.7% WASP with two Catholic students and one Jewish student out of 1,000, that were excused from the prayer service that started the school day. The all girl's high school that my wife attended had a similar makeup. Today's world presents many challenges that didn't exist when I was a young man.

@Melissa: Me too!! I'm in the same boat as you with the HORRIBLE career choice. And yes, it was an awful decision (although, decades back when I chose it, I had no idea that it would turn bad), and although I've worked extremely hard, and have been frugal, I've ended up quite poor.

So, I feel your pain. I suggest that you go back to school to learn something else. I am back in college now for an accounting degree. I really hope it will pay off, despite my old age.

@ Melissa
> I chose graphic design. Actually, I fell into it by accident, but it's been my career for the past decade.
Just because that is what you are doing now doesn’t mean you have to continue to do it. If you fell into it then you can still make a conscious move out of it today. The book _What Color is Your Parachute?_ had a section on career changes. It’s been years since I’ve read it but I seem to remember that one of the keys was to try to find a position that uses many of your existing skills, so that you can get value from your current training.

You could start by looking at related fields that might pay better. For example, right now you probably are designing documents for your customers. Could you design user interfaces for an application or web page instead? I don’t know if it pays well or not, but it can certainly add a lot of value.

I’m sure there would be new things for you to lean, but wouldn’t it be worth learning new skills to get out of a dead end job?

-Rick Francis

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