When I was a kid back in the 1980s and 1990s, I remember watching “Lifestyles of the Rich and Famous.” That show is how I generated my first impression of how all millionaires live. Robin Leach, the host, employed his fancy British accent to lend an extra layer of gilding to every mansion, yacht and luxury car featured in each episode. “Wow, so that’s how rich people live!” I thought.
Fast-forward through the rest of my childhood, through my teenage years, right through college and into my first full-time job.
Along the way, I encountered a few real-life millionaires who lived nothing like Robin Leach’s subjects in “Lifestyles of the Rich and Famous.”
In contrast, they lived just like I did as a 20-something salaried engineer. Instead of sports cars, these millionaires drove nondescript older vehicles including a Chevy pickup and a paint-faded Jeep Wrangler. They lived in nice but rather ordinary houses under 3,000 square feet.
The First Millionaire I Met
I met my first millionaire when I was a college student looking for a place to rent. He made a decent living as a pharmacist and made an even better living moonlighting as a landlord. He supplemented his pharmacist paycheck with rental income from a dozen or so rental properties near the university.
Mr. Matthews would show up at the door of our apartment dressed in paint-stained, ripped blue jeans, ready to fix the air conditioner or patch up a leaking pipe. He did his own repairs on his rental properties even though he could easily afford to hire a handyman.
After running the numbers and watching Mr. Matthews with his rentals, I eventually became a landlord myself for a few years. He knew the secret of buying assets to generate income over the long term. In the 15 years since I rented from Mr. Matthews, I haven’t kept up with him. If he’s still a landlord today, the properties are most likely paid off or very close to it, and he’s making a tidy sum every month on top of the other investments he has.
Not All Millionaires Spend Extravagantly
When Mr. Matthews would stop by in his old pickup truck and dirty work clothes, he always made time to chat with me. I realized he had some real insights into wealth building and how to live well without wasting all of his money. When he wasn’t playing handyman, he led a rich life with his family in a nicer part of town.
He spent money on his hobbies, paid for his kids’ college education and had enough left over to invest in his 401(k) and buy a rental property every year or so.
Mr. Matthews became my new conception of how most millionaires actually live. They build wealth over time and don’t mind enjoying the wealth they create. But they don’t squander it on frivolous purchases or whims. You can see it in their lifestyle and demeanor; wealth is a tool to make life easier for yourself and those around you.
My New Boss, the Millionaire Next Door
Once I started working full time after college, I met another millionaire who showed me how the wealthy live fulfilling lives without putting their net worth at risk of depletion. He was the president, majority owner and namesake of the small engineering firm where I worked.
At first impression, you would think him quirky or eccentric for driving the crappiest car in the parking lot. Some of our coworkers made light-hearted jokes about when the president of the company could finally afford to upgrade his vehicle to something from the 21st century.
Those jokes missed the point. The company president could have bought enough brand-new cars to fill the whole parking lot if he really wanted to. Instead, he kept his wealth in stock and bond investments, commercial real estate and his own engineering company that he’d built from the ground up. After all, owning your own business is one of the best investments you can make. Eventually he did get rid of his old ride when he replaced it with a new-to-him (used) Jeep Wrangler.
“Only seven years old and not even 100,000 miles on the odometer yet!” he proudly and frugally proclaimed. This was a guy who looked for value at every opportunity, and it showed in his personal consumption and business moves.
He wasn’t afraid to spend his money though. Every year he would invite 10 or 15 employees — almost half the company! — to go golfing with him at the beach and put them all up in oceanfront rental condos for a few nights. It was his way of sharing the wealth we all created at the company. He frequently hosted parties at his house, where his employees and friends could join him for a casual evening of fun.
Learn From These Millionaires
The company president was frugal in some areas of his life so he could spend money where he could really enjoy it. He loved golf and treating his friends and employees to a good time but didn’t really care about a flashy car or huge mansion at all.
His biggest status symbol was hidden from public view: his growing balance sheet. He really enjoyed growing his investments and building his company, and that’s where he derived pride, not from material possessions but from experiences he could provide with the wealth he created.
I picked up a lot of wealth skills from these two millionaires who have influenced my life. It’s OK to drive a boring older vehicle and look like you don’t have a lot of money. True wealth is knowing you have the financial resources to live the life you want and the ability to provide for those close to you.
Wealth is something acquired slowly over time and not something to be squandered or wasted. Wealth should be spent on the things you value the most.