The Millionaire Next Door

What does a millionaire look like? Drives a fancy car? Wears an expensive watch? Lives in a big house?

Not always. In fact, appearances are often deceiving.

Many millionaires, especially the truly financially savvy ones, are not easily recognizable.

Here are some traits of a millionaire next door:

1. She spends less than she earns. Often a lot less.

2. He knows becoming a millionaire is a product of working hard over time and accumulating wealth gradually by saving diligently. 

3. She makes her own coffee at home versus buying Starbucks day in and day out (but occasionally treats herself). She lives in a modest home (she does not want to become house poor). She drives a ten year old car. And she does not care if you think she is cheap. She is also not impressed by your overpriced luxury car and McMansion.

4. He pays off his credit cards in full every month. No interest charges for him, thankyouverymuch. If you cannot pay for something in cash, you cannot afford it. End of story.

5. She is a big believer in paying herself first - put money away for retirement and then pay your bills before anything else. And it is automatic - you cannot spend what you do not see.

6. He has a goals and a plan to achieve his goals and regularly reviews his progress to achieving them. Few people attain great success solely on luck.

7. She always has a backup plan - you never know when something bad is going to happen (loss of job, injury/illness, etc.) and thus has insurance, emergency fund, etc. for stormy times.

8. He knows the power of compounding interest and started saving young.

9. She knows that if she does not like her job, she has the freedom to do something else. Wealth means freedom.

10. He knows that money does not buy happiness. But financial freedom (AKA debt free and money in the bank) can.

Do not think you can be a millionaire next door? Think again...
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Modest woman turned out to be the millionaire next door
Seattle man leaves $188M to institutions

I love these types of stories! I hope to be like them when I grow up!