The Millionaire Mind booksummary/notes

Posted on December 20, 2014by bwillett555

Thomas Stanley Ph.D. wrote the book The Millionaire Next Door in 1996.
This book highlighted how millionaires accumulated their wealth; they
classified millionaires by people who have net worths over one million dollars.
A follow-up to the millionaire next door is The Millionaire Mind. Which was
published in February of 2000.
Below are my highlights of the book the Millionaire Mind by Thomas Stanley
Ph.D.

4.9% of the households in America have a net worth of a millionaires.

Income statement millionaires. Have a high income and high debt.

Balance sheet affluent are of the millionaire mind. They usually dont
have any credit balances.

To create the research group to identify the millionaires in America. Dr.

Stanley worked with a highly specialized demographer. They identified
226,399 areas/neighborhoods in America that would most likely have a high
concentration of millionaires. They paired that group down to 2,397 homes
and sent them surveys to complete. Of the 2,397 homes that received the
survey, 1,001 responded to survey and of that number 733 of the respondents
were actually millionaires.
Some of the statistics on these 733 homes that responded.

Most of the respondents were in homes that were built-in the 1950s
and even the 1940s in well established neighborhoods and cities.

1 out of 4 millionaires were married and had been with their spouse on
average of 28 years.

On average these millionaires had three children

92% of the millionaires were married

95% of the millionaires have children

Only 3% widowed

Only 2% had never been married

9.2 million average net worth; With the median being around 4.3
million net worth

749,000 income; median 436,000

On average they never spent more than $41,000 on a car

Did not spend more than $4,500 on engagement ring.

Never spent more than $38 dollars for a haircut.

Never spent more than $340,000 on a home

Only 2% of them inherited their homes.

61% never received an inheritance or gifts from others to accumulate

their wealth.

Only 1 in 4 paid more than a million dollars for a home.

1 out of 3 are business owners.

1/5 are Senior Executives within a company

1/10 are attorneys

1/10 Are doctors

1/3 are middle managers, sales professionals, engineers, and professors

Business owners are the richest.

50% of the wives dont work outside the home

90% are college graduates

50% have advanced degrees

Average age is 54

This book goes onto highlight eight key areas that were vital in these
millionaires to become millionaires and ultimately have what the author calls
The Millionaire Mind.
1. Success factors
These 733 millionaires were asked to rate 30 success factors. The 30 they
were asked to rank came from a list of 100 success factors that were created by
the author through interviews and other research the author conducted with
groups of millionaires.

Of the 30 success factors the three that ranked the highest are Honesty,
Discipline and Social skills. I doubt there is anything here that should
surprise any of us.
Here are what some of the millionaires said about these three success factors:

Integrity is not a pass fail course.

Millionaires dont wait for people to tell them what to do at work, in

their personal life, or anything else. They set their own agenda, they
create their own goals.

I am a finisher in a society of starters.

Leasing a Mercedes doesnt make you rich.

Finding a source of discipline when you find your self lacking in

discipline. I really liked how one of them said this. We all lack
discipline at times, but the difference is that people of the millionaire
mind realize the lack and seek out a way to find the discipline needed.

94% of millionaires ranked getting along with people as one of the most
important factors of getting rich.

The author tells a great story of being in a meeting with several former players
of the legendary coach Bear Bryant, who were all now successful business
owners and senior executives in companies. The author asked questions of
the former players. Instead of asking the typical questions you would ask, the
author asked a simple very focused question. What is the first thing you
learned from coach Bryant. All of the former players tell this story:
On the first day of practice he asked one question. Have you called your
parents to thank them? He then says. None of you got here on your own. It
required your parents to sacrifice many days taking you to little league
practices, school, and feeding you and ensuring that you could play football
and ultimately be on this team. None of us got here on our own and we will
not win on our own.
The message from coach Bryant was clear. You must have an attitude of
gratitude and realize they we all need each other to get where we want to go.
The millionaires in the study agreed with coach Bryants assertion.
To be a leader and to get a long in the work place you must have social skills
and the ability to get a long with others. This is not only important if you want
to grow in your company and be promoted, but it is also necessary to be able
to get things done, which will then allow you to accomplish things, get you
noticed and get you promoted. If you are a business owner social skills are a
must to grow your business.

Lastly, discipline to do the things you dont want to do, when you know they
must be done. This is the mindset the people with the millionaire mind have.
2. Schooling
A majority of the millionaires surveyed did not attribute good grades or the
school they attended as playing a role in their ability to accumulate wealth.

Questioning the status quo and the norms are all skills that allow
people to accumulate wealth.

2% of millionaires surveyed graduated in the top of their college class.

3 out of 10 said that they made more As than Bs, Cs, and Ds.

90% graduated from college with an average GPA of 2.9.

Schooling is important but it is not necessary. Although 90% of the

millionaires surveyed had a four-year degree, they all said that it isnt the only
thing that contributed to their wealth. They ranked it very low on the list of
success factors.
3. Relationship between courage and wealth
All of the millionaires surveyed said it requires courage to accumulate wealth.
To accumulate wealth you must be willing to take financial risk as well as risk
that goes along with challenging the status quo.

One of the respondents said it like this: Working for others puts you at
greater risk than working for yourself. Having one source of income is a
bigger risk than taking a risk on doing something on your own. I had
never looked at it quite like this before, but how true it is.

Becoming wealthy is a mind game. You must overcome your fear and
worry. Overcoming fear is one step in the process of accumulating
wealth.

How do you overcome fear: Belief in yourself. (Read the Power of

Positive Thinking, Norman Vincent
Peale) http://www.amazon.com/Power-Positive-Thinking-NormanVincent/dp/0743234804/

Almost all millionaires surveyed say that belief in yourself is the

number one way to accumulate wealth. They are not always confident,
but they have a way to find confidence even when they are not
confident.

It is hard to be motivated and to motivate others if you dont believe in

yourself.

Fear and worry are never all the way defeated. Confidence is built
through the process.

4. Vocation
Choosing a vocation is one of the major reasons for many of these millionaires
success. Although many of them agree that a stable upbringing, love from a
spouse, and warmth from family is critical in success, being passionate about
what you do everyday is a major success factor.

Business owners is the largest category of millionaires, next to doctors,

lawyers, and senior corporate executives.

All confidence begins at home.

Only 55% of millionaires say that they chose their career or vocation
because they loved it. But over time 80% say that it is because they love
their vocation that they accumulated wealth.

58% chose their field because it showed the opportunity for wealth
accumulation.

2 out of 3 millionaires dont retire even though financially they can,

because they love their vocation.

81% of people chose their career because it allowed full use of their
skills, passion, and abilities.

Specialization in a certain field is one way to become a millionaire.

46% of millionaires say that intuition is what led them down the path of
wealth and opportunity.

There are more than 22,000 different opportunities within the defined
business areas.

5. Choice of spouse
What is it about marital status that allows couples to accumulate wealth?

With dual incomes the ability to take more financial risks are created.
Which could lead to successful businesses and larger investments.

The support a loving spouse can provide when things arent going well
can get their partner through tough spots.

The decision-making ability a person with a millionaire mind has in

choosing their spouse was well discussed at length in this book.

Millionaires and people with the millionaire minds have the ability to
pick spouses. They have the ability to pick mates that have patience and
are caring.

96% of both the husband and wife believe that telling the truth is
important.

For every 100 millionaires that say that their spouse wasnt important
in accumulating wealth, there 1,317 that say that their spouse was
extremely important.

6. Economically productive Household

All the millionaires surveyed ran very ecumenically productive households
that you wouldnt think you average millionaire would do. Things such as:

Having furniture refurnished instead of buying new.

Never buying from a phone solicitation

Using coupons

Buying household products in bulk.

Having shoes resoled instead of buying new.

An interesting statistic with a great example in the book was: An average

household spends $10,000 a year on food. Which is $400,000 $600,000 in
a lifetime. By couponing if you are able to cut just 5% of the cost down, that
would be roughly $25,000 over a lifetime. If you invest the money saved in a
mutual fund. That money could grow to a half million dollars.

Millionaires are future focused.

Millionaires dont spend time on things that they arent very good at.
For example: Putting in a hot water heater. You are better off hiring
and paying someone than doing it yourself. You would think that being
frugal that a millionaire would want to save the money and do it
themselves. However, millionaires know that there is an opportunity
cost associated with doing it themselves. They lose the opportunity to
go and accumulate new business or skills that would earn them more
money.

Millionaires are frugal when they need to be. The DIY is not always the
cheaper way. You are better off to earn income from your vocation
than being a do it yourselfer.

Ask yourself: is there better use of my time

4 out of 10 millionaires have clothing altered versus buying new.

7. How millionaires choose their home

Average purchase price: $560,000 and hold onto in for it at least 10 +

years.

53% of have not moved in the past 10 years.

Balance sheet affluent versus Income statement affluent. I loved how

the book really highlighted the differences between the balance sheet
affluent and the income statement affluent. There are lots of people
who make a lot of money (income statement affluent) but they spend it
all. Balance sheet affluent have a high net worth because of assets and
other investments.

High Incomer earners in their 30s and 40s have a disproportion

amount of the higher value mortgages in the market.

Millionaires use these guidelines to pick homes:

1. Be willing to walk away from any deal on any home at any

time.

2. Dont pay the initial asking price for any home. If you have
ever paid the asking price for any home, most likely you are
not a millionaire.

3. Never try to buy a home in a short span of time.

4. Look for an estate sale, divorce sale, or a foreclosure.

5. Only 27% of millionaires ever had a custom-built home. 1

out of 5 millionaires actually ever bought a spec house.

6. Always buy homes that you can afford. Appreciation of

the home and whether or not you can afford the payments
easily.

What is affordable? Assume that your annual income is cut in half a year after
you buy a home. Could you still afford it? If not, then it is not affordable for
you.
8. Lifestyles
The 733 millionaires were surveyed and asked what activities they were
engaged in within the last 30 days.
There were 27 lifestyle activities that these millionaires were engaged in. Here
are the top 3.
1. Socializing with children and grandchildren

2. Entertaining close friends.

3. Planning of investments

Millionaires dont spend money so they can have fun. They dont buy
boats, they dont take exciting vacations.

Most millionaires are not do it yourself types. On average they make

$325 an hour. They dont put shelves up in the house, when they could
be doing something else to earn $325 an hour.

Golf ranks 13th on the list: However, most of the millionaires said that
golf was not only a recreational activity, but it was a business activity
that was one of the success factors that led them down the path to
accumulate wealth.

Most millionaires in the study on average paid over $300,000 in taxes.

1 out of 5 paid over 1 million dollars in taxes. One of the activities was
that they all had met with a tax professional within the last 30 days.

Dont borrow money for a new venture. Bootstrap any business

ventures.

Attended religious activities

These are my notes from the Millionaire Mind. I hope you enjoyed the
summary and picked up a few nuggets of wisdom along the way. Please share.
To your success and your future.

Share this:

Click to share on Twitter (Opens in new window)

40Share

on Facebook