Comments on: “Stop Acting Rich” by Thomas J. Stanley – Book Review

By: @mslorax

@mslorax — Sat, 13 Mar 2010 14:04:46 +0000

Hi All! This is a great discussion. I read The Millionaire Next Door in 1997 when I was flat broke and beginning to think I was doing something wrong and had the wrong set of values. I was right! Kayla, thank you for sharing your financials, but I say really give yourself a break. I look at my SS statement to look at what my actual earnings over the past few years were and use the average of those numbers in wealth calculations. I am a decade older than you and are right where you are so you are sooo golden!

By: Monevator

Monevator — Fri, 26 Feb 2010 23:01:36 +0000

The argument about whether to live where the rich live when you want to get rich is an interesting one.

I live in London in the UK, which is frequently in contention for one of the most expensive cities on the planet, although at the moment with the UK£ so low it's plummeted out of the rankings on an international scale. It's mainly the City of London (easily NY's equal in financials) that keeps the money flowing in.

What I've wondered is whether people earn more because they live here (because of the jobs) or because they have a need to compete (because their mental 'ceiling' on what's a good income has been raised).

e.g. They say you should surround yourself with positive people to get a positive mindset. Do rich people give you a rich mindset?

By: Alec

Alec — Fri, 26 Feb 2010 04:24:27 +0000

Seems to be an interesting book. The title of this book really gets me thinking about the society we live in and just how superficial people are.

I mean, so many people are hurting and yet so many people continue to buy tons of "stuff". I suppose many like buying the things they do as a result of trying to impress others and get a form of instant gratification. Personally, I think it would do many people good to really sit down and think about their spending habits.

The big thing to think about is what a purchase will offer you as opposed to saving your money and living more within your means. That thing you bought today might bring joy to you today, but habitual saving will bring you much more. I'd have to say it's a mindset issue for most.

By: ijwebsite

ijwebsite — Thu, 11 Feb 2010 21:16:42 +0000

I'm sure you learned more about business by managing that property than anything you learned in school

By: Kayla

Kayla — Thu, 11 Feb 2010 21:14:54 +0000

You are very right on the length of net income… We've only broke the 200K ceiling for 3 years because we just got married and combined force.. Before that, we were each 1 soilder army and it was a lot harder..

yeah, it was my parents idea to own a condo and rent out in college. They loaned me the downpayment and co-signed the paper to get me started. But I was responsible for daily operation… So I have to thank my parents for that… and consider myself lucky to have parents who are wise and willing to help.

By: Investor Junkie

Investor Junkie — Thu, 11 Feb 2010 21:04:15 +0000

Hi Kayla. Don't be too hard on yourself. You are ahead of the game than most. The issue based upon the formula is your net income. It also does not take into account how long you've had that income. Obviously if you just started at $275k then your net worth will be much lower because of previous years at a lower income level.

I wish I had a rental unit while in college. I should have begged, borrowed or stole money to get a rental unit.

I too started with a small investment in some bond mutual funds.

By: Kayla

Kayla — Thu, 11 Feb 2010 20:51:37 +0000

(continue…)
For us, a few things helped us to have a jump start:
1) Under my parents pressure, I had to go to Ivy league school and I HAD to have a grad school degree. So I did. Because of that, my income was in 6 figure range when i was only 26 years old.
2) Also under parents influrence, I started investing when I was sophomore in college. Had my first stock portfolio of $3000 at age 19, saved up from waitress job. Became a landlord when I was 20 buy renting out part of the condo I bought in college. As soon as I got my first job, I started 401K and IRA and continued stock investments. and kept on buying properties. So, start early is important
3) both me and my husband are frugal. We could qualify for a million dollar home, but we opt for a $300K home and fixed up ourselves and took out a 15 year loan only.

But with all that, we still fall short according to the book.. So there is stil much to be done.. :d

By: kayla

kayla — Thu, 11 Feb 2010 20:51:18 +0000

I will share my stats since I am a IT professional myself and I like numbers.

Household income: $275K/yr
Networth : $860K including retirement funds, taxable funds, cash, equity in properties
Age: 35
Line of jobs: I work as a system engineer and my spouse is an accountant. We also run 6 rentals on the side and I created a retail business (online and store front) and gave to my parents to run.

According to the book, we should have 0.1 x 35 x 275000 = 962.5K
So we are still running short. This is not an easy goal to achieve. But I think it's doable if one is persistant and has a plan.

By: Investor Junkie

Investor Junkie — Wed, 10 Feb 2010 22:51:59 +0000

John Congrats on 30% of your gross income! I gonna write the next post about how much to save.

You are surely on the way to becoming a BA.

By: John

John — Wed, 10 Feb 2010 21:59:31 +0000

Agreed that trying to live like the class above you will make you poor.
My wife and I simplify our lives, save more than 30% of our gross income, and still enjoy life with our 2 kids.

By: Investor Junkie

Investor Junkie — Wed, 10 Feb 2010 17:07:24 +0000

Thanks Money Funk Everyday you make one step closer to your goal, you can make dramatic improvements in a year.

By: Investor Junkie

Investor Junkie — Wed, 10 Feb 2010 17:06:15 +0000

It's scary indeed! I wonder if there will be a second wave in this Great Recession?

By: Money Funk

Money Funk — Wed, 10 Feb 2010 16:39:02 +0000

Applied equation to my own life… I have $282,061 to make me a BA. LOL. Think I am a long way off. I have multiple books lined up to read, but when I get to this one I'll make sure to come back here to purchase.

Thanks for the review. I like Thomas Stanley's books. (@thomasjstanley)

By: Matt

Matt — Wed, 10 Feb 2010 12:47:43 +0000

Great post.
The point about mall traffic and the recession is spot on. I always wonder why I have a handful of things at the local Target and Walmart when I'm surrounded by people with shopping carts full of stuff.