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The Millionaire Mom Next Door

The Millionaire Mom Next Door

If you have not read the book The Millionaire Next Door it is a must-read. The authors, Thomas Stanley and William Danko spent twenty years researching and interviewing millionaires in America. They were shocked at what they found. Millionaires are not the people who make a ton of money or live lavish lifestyles. These people are good income earners but have very little accumulated wealth. Stanley and Danko found a common denominator amongst the true wealthy: He lives next door to people with a fraction of his wealth, he is a compulsive saver and investor, and he has made his money on his own (80% of America’s rich are first-generation rich)

“The Millionaire Next Door”: 7 factors of people who build wealth:

  1. They live well below their means.
  2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
  3. They believe that financial independence is more important than displaying high social status.
  4. Their parents did not provide economic outpatient care.
  5. Their adult children are economically self-sufficient.
  6. They are proficient in targeting market opportunities.
  7. They chose the right occupation.

Teaching Your Children About Money: The Lemonade Project

At what age do you think a child should start learning about money: earning money, respecting money, investing money? A child can never be too young to learn about money. My daughter is almost 4 years old. When she turned three, I took her to buy a piggy bank. I taught her what a penny is and how to earn pennies. Over the past year she has saved up about $2. I took Conley to the grocery store and we bought a big can of lemonade. I said, “Conley, do you want to turn your $2 into $10? Let’s have a lemonade stand!”

So on a warm, sunny day April we had a lemonade stand and made $11. “Conley do you want to turn your $11 into $20? Let’s sell lemonade and cookies next time!” Shrieks of joy rang from my daughter. Then I will teach her how to turn $20 into $50, then $50 into $100, and so on. What if we make a bad investment and lose money? Oh well, it’s just money. Nobody lost an arm or a leg. Conley can re-build her savings by earning more pennies.

I want to teach my children that money is something that is earned – not given to them. Money should be given to others in need. Money can be grown when invested wisely and with hard work. But above all else, money is not everything. Appreciate every day when you have it, but a simple, peaceful life can continue on when you have very little of it. Dr. Jerry Anderson says it best, “Values are not taught. They are caught.”

Are you teaching your children how to be responsible with money?

Kate Raidt Kate Raidt is author of The Million-Dollar Parent: How to Have a Successful Career While Keeping Family a Top Priority and founder of advantage4parents.com. She is also an alumnus of the Southwestern Company's summer work program. Kate is also the mother of two young children.
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