Hey guys, good morning!Thanks for joining me, thanks for tuning in.
As I'm a big reader, of course, and one of the books on my reading list was The Millionaire Next Door. I haven’t read it—it came out in 1996—but they had a copy of it, so I picked it up because it kind of accurately describes somewhere where I'm at at this point. But I started reading it, and there's a lot of good stuff in here. so I'm gonna recommend you read the book, but it kind of dispels a lot of the myths that we have about what a millionaire is, who they are, how they live, where they live, type of house, cars, all that. So The Millionaire Next Door—I want to still encourage you to read that. I think it's a great portrait.
But what's really interesting about it—I think we think that millionaires are, you know, sports superstars, media stars, um, you know, the Richard Bransons, the Jeff Bezoses, the Bill Gateses, you know, and of course, uh, music stars, stuff like that. But it's really interesting because I think the portrait they paint of the average millionaire is not necessarily the case. But one of the things that really stuck out to me about this book is seven common denominators among those who are successfully building wealth or who have built wealth. And I thought this is important because I think so many of us guys—we're, I'm 60, you know, I'm in the quote "retirement years"—a lot of people are facing retirement, looking ahead, maybe don't have things dialed in the way they need to.
So being wealthy isn't about having Bill Gates-type of money. It's not about having yachts, 10,000-square-foot homes, jets, all that type of stuff, guys. It means wealth really is what you've accumulated. Your income is what you spend, but how can you maintain that lifestyle if you couldn't work or didn't want to work? You have to be financially independent. So I want to talk about this, and please hear the message here. There are ways that you can increase your income—side gigs, etc.—but let's answer the question first.
I thought this was interesting: Who becomes wealthy? And one of the things they noted was, usually, the wealthy individual is a businessman who has lived in the same town for all of his adult life. And again, that is... that's me. I'm in the Seattle area here, right? But they're a compulsive saver and investor, not a compulsive spender and non-investor. They are compulsive savers and investors. So there's kind of some really important things here—some sound financial principles.
Did you know that 80% of America’s millionaires are first-generation rich? And I want to say this—my dad was one of those, and I applaud him. He since passed back in 2012, but I want to applaud him for being a first-generation millionaire in his family. But, you know, affluent people typically follow a lifestyle that's conducive to accumulating money.
And then here's where the seven common denominators come in for those who successfully build wealth:
Number one: They live below their means. Guys, that's important. You know, if you make a hundred thousand dollars a year, can you live on 50? You know, you make $200,000 a year, if you're spending that or more due to credit, that's living above your means. You want to be able to live below your means and well below your means.
And here's an interesting statistic that I wanted to share because this is so true. You know, we talk about sports stars people almost there, like, go from almost nothing to multi-million-dollar contracts. But did you know 60% of NBA players go broke within five years of departing the league, and 78% of former NFL players experience financial distress two years after retirement? You wonder why. Most professional athlete earnings are compressed into just a handful of years. I think the average lifespan for somebody in the NFL is like 4.2 years, something like that. So it's not very long. You go from making nothing to also multi-millions, you spend like it. Keeping up with the Joneses can be financially fatal for newly rich athletes, and that's unfortunately what happens far too often. So you've got to live below your means.
