Hats and cattle, Fords and frugality

Who are America’s millionaires? How’d they get rich? How do they compare–and contrast– with the 96.5% of households that aren’t in the millionaire category? Some of the answers are surprising, which has vaulted “The Millionaire Next Door” to best seller status in the United States.

Two guys, a Thomas J. Stanley, Ph.D., and William D. Danko, Ph.D., set out to study the myths and realities of millionaire life. Their book is far from a lavish description of decedent lifestyles of the rich and famous. It’s more like how the guy next door with a J.C. Penney’s tie around his neck and a four-year-old Ford Taurus in the driveway just might have a cool mil stashed in the bank.

The book, in sum, offers three broad observations:

A) Millionaires are generally self-made, as opposed to being snot-nosed brats who won the genetic lottery and inherited their wealth.

B) They tend to be frugal, preferring to save and invest their money instead of driving flashy cars and living in overpriced houses.

C) By contrast to the happy circumstances of millionaires, the typical American household has — ready for this?–less than $15,000 in net worth if you factor out home equity.

The driving theme of the book is that millionaires live well below their means. Contrast this with the yuppies, who stretch as far as they can to live in the glitzy neighborhoods and who are driving leased BMW’s and struggling to make the payments on their credit card bills. The millionaire wannabes are, indeed, totally different than most of the real life millionaires.

This yuppie way of living is described by one Texas millionaire as “all hat and no cattle.”

Here’s one for you: what’s the car most commonly driven by America’s millionaires? No, it’s not Mercedes or BMW or even Lexus. It’s…Ford. (Cool. I’m a Ford man myself, so I hope this correlation means I’ll be a millionaire).

This whole frugality thing came to mind when someone observed that a lot of well-paid folks here–sopping up the gravy on the government payroll–are actually living paycheck to paycheck. Could it be that these nice cars and some of these big houses are being funded on a paper-thin financial edge?

All hat, no cattle, is it possible? If so, what happens when 1999’s economy continues to contract (and it must, given the realities in Japan)?

Back to America’s millionaires. What do they do for a living? Of those who are working (not retired), two out of three are self-employed.

The book, which I bought at Bestseller Books (price: $14.00), also details shopping habits, education and professional backgrounds, and other characteristics of America’s wealthy.

If you don’t read the book, then here’s the wisdom from Messrs. Stanley and Danko in a nutshell: “Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.”

Better, then, to have small hat, plenty cattle, eh?