If there were anything that I could do to help my patients that goes beyond the call of a family doctor, would be to help them with their finances. I would love to help liberate some from living paycheck to paycheck and the constant financial pressure that mounts from poor decisions and a consumer lifestyle.
To have control of your financial destiny is freedom. To not be slave to the bank is liberating. To be able to change your family legacy because of your wise money decisions is life-changing.
Money can be sensitive and precarious subject to approach but, I was liberated about 8 years ago after I read the “Millionaire Next Door” by Dr. Thomas J Stanley. Next to the wisdom of the Bible, this book changed my whole view on spending, living and earning.
I feel compelled to write about this because I learnt that on February 28th 2015, Thomas J Stanley sadly passed away. Normally this would just be part of the daily news but his ground breaking research on wealth has had such a profound impact on my life and countless others that this needs to be shared.
The premise of his writing is that our perception of what a millionaire looks like in our society is false. The typical millionaire isn’t the family with the biggest house in the best suburb with the newest cars who lunch at the country club, rather it’s the plumber who owns his own business, who drives a reliable 5 year old Toyota who lives in a modest house who is actually the true millionaire.
Stanley showed repeatedly through all his work that the typical millionaire lives well within his means, invested regularly, buys quality products rather than luxury and repeated these and other key behaviours on their way to becoming wealthy.
The book in no way is a “get rich quick” schematic or stepwise plan for financial success but a stark reminder that simple and small, daily and deliberate financial decisions can take a fixed income employee towards financial independence.
In medical school I thought that I wouldn’t ever have to worry about money again. I was here. I made it!
Working as a doctor would afford us the lifestyle that we had wished for. I dreamt of a beautiful expansive house with view across a body of water where we’d live and I even talked at length with my father in-law about the black BMW that would be parked in the driveway.
I also had noble visions of how I would provide for my parents in their retirement and fund mission works overseas. But when I picked up my copy of the Millionaire Next Door, it didn’t fulfill my expectations, it blew them away and was a profound “kick in the guts” that I needed.
In the chapter entitled “Time, energy and money”, Stanley meticulously profiled two high earning doctors in their 50’s both with identical specialties and earnings but in opposite financial situations. This difference was frightening.
Both doctors worked hard, spending fewer than ten hours a day with their patients which translated into a high income. One doctor figured that with such a large income, a household budget and planning was a waste of time but the other had an opposite feeling.
He and his wife believed that money was a resource never to be squandered but to be carefully allocated to a lifestyle well within their earnings.
This left me with a sick feeling in my stomach. I knew that we needed to change our thinking of wealth and money as, I’d been consumed by the “Rich doctor” syndrome.
“Being a well educated, high income earner does not automatically translate into financial independence. It takes sacrifice and planning” The Millionaire next door – Dr. Thomas J Stanley
General practice and wider implication
After reading the millionaire next door I started noticing a pattern within our families, our friends and in my patients. Two of my favourite patients who regularly saw me were both married tradesman with their own businesses and they have amassed a small fortune through careful investing, working hard and living within their means.
They were more than happy to share their story with me when I asked as there is much wisdom to be learnt from the experience of others!
I’ve also recently seen two schoolteachers on fixed incomes become millionaires and retire aged 65 after a lifetime of frugal living and planning.
This story about an American janitor recently confirmed that Dr. Stanley’s research about the wealthy are true as Ronald Read had amassed a 8 million dollar estate when he passed away at age 92.
But I’d have to sadly say this rather the exception than the rule as most have fallen for the illusion of acting rich and that success is measured with spending and living beyond their means.
With Dr. Stanley’s words firmly echoing in our minds, the change in our lives has been gradual but rewarding.
These are some key ideas from The Millionaire Next Door that have had a personal impact:
Begin earning and investing early in your life
Budgeting, investing and controlling expenses is the path towards affluence
Live well below your means
You definitely aren’t what you drive
Don’t take on a mortgage that is more that twice your annual income
Most millionaires don’t spend money on luxury items
I don’t think I’ve ever been happier to drive my 13-year-old Mazda 121 to work or receive my $40 $25 a week allowance for “personal items” (its usually coffee, music and books). I dare say influence that “The Millionaire Next Door” had on our lives was one of the few reasons why we chose to move to the country ,to reduce our cost of living and therefore path to financial independence.
So is it all about becoming a millionaire and amassing a fortune? I dare say most millionaire’s never had this as their target, rather wanting to be in control of their financial future and not falling into the cycle of debt and consumerism.
They found out early that living within their means, saving and investing led to a happier and more fulfilled marriage, children who understood the value of money and work and finally the capacity to be generous with the next generation and those in need.
The message here is clear.
Frugality, living with our means and investing are the secrets of the millionaire next door.
*All text and ideas shared here are copyrighted work of Thomas J Stanley *
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