19 Things Your Suburban Millionaire Neighbor Won’t Tell You

That’s right. Although having a million bucks isn’t as impressive as it once was, it’s still nothing to sneeze at.

In fact, CNBC reports that in 2013 there were 13.2 million millionaires in the United States alone.

That’s a lot of people, people. And the odds are one or two of them are living near you.

Heck, one of them might even be your neighbor. In fact, the odds are very good that it is your neighbor.

But, Len, you don’t know my neighbor. That guy doesn’t look anything like a millionaire.

Well, guess what? Your suburban millionaire neighbor called (oh yeah, we go way back) and the two of us had a nice little chat.

Here’s a few things he shared with me but apparently doesn’t want to tell you. (No offense, I’m sure.)

1. He always spends less than he earns. In fact his mantra is, over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

2. He knows that patience is a virtue. The odds are you won’t become a millionaire overnight. If you’re like him, your wealth will be accumulated gradually by diligently saving your money over multiple decades.

3. When you go to his modest three-bed two-bath house, you’re going to be drinking Folgers instead of Starbucks. And if you need a lift, well, you’re going to get a ride in his ten-year-old economy sedan. And if you think that makes him cheap, ask him if he cares. (He doesn’t.)

4. He pays off his credit cards in full every month. He’s smart enough to understand that if he can’t afford to pay cash for something, then he can’t afford it.

5. He realized early on that money does not buy happiness. If you’re looking for nirvana, you need to focus on attaining financial freedom.

6. He never forgets that financial freedom is a state of mind that comes from being debt free. Best of all, it can be attained regardless of your income level.

7. He knows that getting a second job not only increases the size of your bank account quicker but it also keeps you busy — and being busy makes it difficult to spend what you already have.

8. He understands that money is like a toddler; it is incapable of managing itself. After all, you can’t expect your money to grow and mature as it should without some form of credible money management.

9. He’s a big believer in paying yourself first. Paying yourself first is an essential tenet of personal finance and a great way to build your savings and instill financial discipline.

10. Although it’s possible to get rich if you spend your life making a living doing something you don’t enjoy, he wonders why you do. Life is too short.

11. He knows that failing to plan is the same as planning to fail. He also knows that the few millionaires that reached that milestone without a plan got there only because of dumb luck. It’s not enough to simply declare that you want to be financially free.

12. When it came time to set his savings goals, he wasn’t afraid to think big. Financial success demands that you have a vision that is significantly larger than you can currently deliver upon.

13. Over time, he found out that hard work can often help make up for a lot of financial mistakes — and you will make financial mistakes.

14. He realizes that stuff happens, that’s why you’re a fool if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner and can be triggered from multiple sources: the death of the family’s key bread winner, divorce, or disability that leads to a loss of work.

15. He understands that time is an ally of the young. He was fortunate enough to begin saving in his twenties so he could take maximum advantage of the power of compounding growth on his nest egg.

16. He knows that you can’t spend what you don’t see. You should use automatic paycheck deductions to build up your retirement and other savings accounts. As your salary increases you can painlessly increase the size of those deductions.

17. Even though he has a job that he loves, he doesn’t have to work anymore because everything he owns is paid for — and has been for years.

18. He’s not impressed that you drive an over-priced luxury car and live in a McMansion that’s two sizes too big for your family of four.

19. After six months of asking, he finally quit waiting for you to return his pruning shears. He broke down and bought himself a new pair last month. There’s no hard feelings though; he can afford it.

So that’s it. Now you know what your millionaire neighbor won’t tell you.

Oh, and, um, would you be so kind to keep this just between you and me? I’d hate to ruffle anyone’s feathers or cause of any kind of neighborly spat.


Thanks. You’re a peach.

Photo Credit: tabreandrew


  1. 1


    I know this one big-shot lawyer who once told me how much his hourly rate was. Let’s just say that most people would be very happy to make this much in a week. This guy lives in a regular, fairly modest home he bought 20 years ago, drives a 10 year old Toyota Camry, and commutes by bus. The other day I ran into him in the supermarket very early Sunday morning. You would want to help him with his grocery bill because he looked so poor. And he is a heck of a nice guy. – I agree with you. There are a bunch of people like that out there. They may really live right next door and you won’t even know it.

    • 2


      And then there is the other extreme where people live a very openly rich life with the big over-sized homes, fancy luxury cars and private elementary schools for the kids – yet they are up to their eyeballs in debt and one paycheck away from total disaster and losing everything. On top of that, they will be forced to work well into their golden years just to dig themselves out of the hole they’ve created. And for what?

          • 5


            All the 19 reasons are spot on and I agree with all of them. Its the choices we make that can upgrade your financial life to this status, eveything else is an excuse. If you say you cant be a millionaire you never will become one.

      • 7

        ssmith says

        So true – this is exactly like my husbands law partner. They live in a $3m house, 3 kids, wife who has never worked, expensive gym & country club memberships, kids activities, brand new cars for all of the kids, pricey colleges for all 3, numerous vacations every year…..but hasn’t amassed a fraction of what my husband and I have in terms of total net worth. Different choices, though. Our house is nice – but only $1.3m, no kids, no debt. We live a very nice lifestyle, but bank most of our income….and sleep like babies!

  2. 8


    We have a guy like this in our neighborhood. He would never admit to being a millionaire, but all of the signs are there. He has owned his house for decades and keeps it looking nice. He works part-time at the local car repair shop and has admitted to me that he only works to keep busy. He walks to the grocery store every day, even though he has a shiny new Prius in the garage. But, the dead giveaway is that he is contantly telling anyone who will listen to put money away for their future. He is kind of a cult hero in the neighborhood. Plus, he’s a great neighbor.

  3. 9


    Good list Len! I have a lawyer friend who used to rib me about my car. He always had a roll of cash and used to travel with a posse of friends when he went out. He never worried about spending money if there was something he wanted. I know for a fact he was a millionaire.

    Between the economic downturn, some business plans that went sour, and plain bad luck (fiance became very ill), he is now quite broke. Sadly, now he’s unemployed and can’t get private health insurance, so he must use the ER for medical care. Since he didn’t have an emergency plan or fund, he couldn’t cope with a rapid reversal of fortune. Time is not his ally as he’s in his late 50s.

  4. 10

    Jason @ Redeeming Riches says

    Great post Len! Love #1 – that’s so true – they aren’t concerned about flaunting it to impress people. It’s amazing how so often we get swept up in trying to act rich and end up becoming poor in the mean time.

  5. 11


    I had to comment!!! This should be on the front page of every magazine. Don’t people get it. Look rich-end up poor. After reading this, well, what more is there to say? My old car and healthy net worth are my badges of honor!!!! Best, BArb

    • 12


      @HomeSaver: Glad you enjoyed it. Nope, never read the book.
      @Bret: Wow, so counting you that means your neighborhood has TWO cult heroes. (You and your neighbor.) Don’t get modest on me, Bret! :-)
      @Jennifer: What a sad story. Please tell me his fiance is getting better, at least. I just had a coworker today tell me his uncle actually committed suicide after he lost virtually all of his retirement savings (and they were significant) at age 60 during the dot com bust. I can’t comprehend, and I hope I never have to deal with, such devastating loss.
      @Jason: I love #1 too – “Tis better to be anonymously rich rather than deceptively poor.” Oh yeah, that is genius, isn’t it? In fact I love it so much I am going to trademark it.
      @Barb: Wear those badges proudly, Barb! :-)

      • 13



        Yeah, I give out a lot of copies of The Richest Man in Babylon and I try to get people in the neighborhood to save their money. My conversion rate is pretty low, but I do my part around here. My dream is to be walking to the grocery store in 10 years, while my electric car sits in the garage.

  6. 14


    @Len: Yes, it is sad and I can’t help much since I am 2 (large) states away from him right now. Fortunately his fiance’s operation was successful, but it will take a while to find out how much of the nerve damage will recover. His fiance is quite a bit younger and she has 2 teenagers as well, so we all hope she gets better soon.

  7. 16


    Mr. Penzo… good to see you still tearing a brilliantly creative hole in the all too often dull world of personal finance.

    The points my neighbor made that stick out like a sore thumb are 8, 11, and 16… love them, and soooo true! Cheers man.

    • 18

      awol50 says

      Definition of a millionaire would be value of your financial assets minus all your liabilities. Most people should not include the value of personal items as they really don’t amount to alot anyway, but there could be exceptions in some cases for some people. I would not include in that calculation the value (less the mortgage) of your main home unless you are upside down. A millionaire is not defined by income, although some people mistakenly do.

  8. 19


    Love this post; I feel like I just reread Millionaire Next Door with a fun twist. Frugality, investing, “self”- suffiency, financial-planning, and insurance are all so critical and yet all too often neglected. Thanks for fun delivery of such important topics.

    • 20


      @Matt: You are too kind! I think number 16 is extremely important too. Obviously, that’s why put it near the top of the list. ;-) But seriously, it is important because while the power of compound is a wondrous thing, we can’t rely on it to do ALL the heavy lifting when it comes to padding our nest egg. We have to help out by continually increasing the amount of money we save every time we get a raise. I gradually increased my automatic paycheck deductions over a period of years until I reached my maximum before-tax limits for my 401(k) – and I didn’t miss the money because of it. :-)
      @Sam: The Reuters article didn’t define it, if I remember correctly. I would use net worth (minus home equity in your primary residence) as my measuring stick. How about you?
      @Shawn: Hey, thanks! My pleasure. :-)

      • 21


        I just use liquid cash and securities which you can readily sell.

        Take away EVERYTHING else. I truly believe “net worth is an illusion” and a lot of people are delusional in their calculations.

      • 22

        Dave Nash says

        Len – Why would you use net worth MINUS your equity to measure whether or not you are a millionaire? Are you saying don’t count home equity since it is so illiquid? Confused. (and yes I realize that the actual million dollar number is not what matters here – it’s the state of mind of not constantly having to worry about money that should be the goal for all of us)

        • 23


          I do it that way simply because I like to look at my house as my home and nothing more (as opposed to a piggy bank). That’s all. I will always need a place to live, so in that regard, if I intend to live in my home most of my life the equity is irrelevant (unless I need to tap it in an unforeseen financial emergency). I guess I just like being conservative.

          • 24


            Len, I think subtracting the value of your home is pretty darn smart after the real estate bubble collapse!
            Even if your house is paid off, there is no guarantee that you can sell it.
            I so agree that the main goal in saving should be peace of mind! You can call it financial freedom, but to me it is peace of mind. So worth it!
            Thanks for a fun article with lots of goodies in it!

    • 26

      Jan says

      Why wouldn’t a person use the worth of their paid off home and second home as net worth? Most millionaires I know (and I know quite a few) have a million without these calculated in, BUT- most made it on real estate. Just because the market went down does not discount the millionaire bought in the best school district in town to begin with — Location, Location, location

  9. 27


    I love the post you come up with, Len.

    There is a lawyer in our neighborhood who is this little old guy with a long ZZtop beard and looks likes he’s still stuck in the hippie era. He rides his bike around to get around town. Underneath all the exterior is a very wealthy and awesome layer. But you would never know looking at him. :)

  10. 28


    From many years of working in public accounting, with the rich, the non-rich and the wanna-be-rich, I can say that all that you’ve written is true.

    Never be impressed by a person living in a McMansion and driving the latest luxury import. Never ignore the person who’s lived in the same modest home for the past 40 years and drives a 10 year old sedan–it’s far more likely that he’s the one with the fat bank roll.

    TV and credit have distorted not only wealth, but also our perception of it.

    Oh, and one more thing–#20–millionaires are overwhelmingly over 50 (mostly 60). That patience is a virtue thing can’t be overstated. Rich and young is usually more about debt. Usually really BIG debt.

  11. 29

    financialwizardess says

    Great post Len! One thing I learned working in the financial industry in my youth was that those who appear rich (have all the trappings) are dirt poor (in their accounts) and those who come in with dirt on their hands driving a beat up pickup truck have loads of cash. Best lesson I ever learned. I simply laugh now when people try to impress me with their “things”. I am secure knowing I probably have tons more cash then they ever will.

    • 31


      @FinancialWizardress: It is ironic, but true. And I try to drill that same lesson into my kids’ heads repeatedly. I hope it sinks in with them eventually.
      @James: Thank you, kind sir! Glad you enjoyed it. :-)

          • 34

            Dave Nash says

            cash flow for kids is a great board game that helps kids learn the value of money (and of not getting caught up in debt). It’s a fun game that I love to play with my kids (who are 8 and 6). They’ve learned to despise credit cards and value the creation of wealth through passive income. Look for it on ebay!

  12. 36


    I really like this post. I have seen this clearly in many examples – people who are wealthy don’t live as if they are, in terms of material things. That’s a big part of how they got there.

    I know someone who makes a well over 6 figure salary, is about 40, and has been a successful professional for many years. Yet, as a single person, lives in a modest 1-bedroom rental. You would think she was a broke college student. But, she seems to have fun and enjoy life quite a bit, socializing with friends and traveling a lot while doing it on the cheap. And I’ll bet she’s accumulating quite a nest egg for herself. Not saying I want to live to her extreme, but it speaks to how some people are wealthy despite first appearances. You can’t judge a book by its cover.

  13. 38


    Great list Len! You hit the nail on the head — living within your means is the key to long term financial security. Sure making more money will make it easier, but good things come to those who wait.

    • 39


      @Squirrelers: Thanks for sharing your story. I think it goes to show that one does not have to spend a fortune to enjoy life and have fun. People can really have a great quality of life while living within their means, regardless of their income level.
      @Jordan: Thanks, Jordan! It sounds so simple, doesn’t it? Wait a minute… it is, actually! :-)

    • 40

      Tim McGinley says

      Close but no cigar! Financially, good things come to those who don’t wait – they go out and work their butts off.

  14. 42


    That’s absolutely correct. Nice post. Some people say live within your means, but I say live below your means. If you want to be a millionaire, you will. Just live below your means.

  15. 43

    Pete Crackel says

    No really. What won’t he tell you.

    1) I never served in the military
    2) I never put my life at risk.
    3) I’m a cheap bastard.
    4) You’re on your own.
    5) I’ve got mine. Screw off.
    6) You are a fool.
    7) You must work harder.
    8. What’s wrong with you.
    9) I’m a really boring person.
    10) I don’t go to church and tithe.
    And a few others.

    • 45

      Jan says

      Every millionaire I know served in the military except my BIL. It was a terrible time to join (the peacetime Army). They all attend church and not only tithe- but help build the new churches.

      • 46

        jayho says

        Best way to become wealthy is marry a good conservtive person that has a government job. when u have security u have good health ins good income and good retirement then the other spouse can save almost all of their income. stay married and dont do anything that costs money. dont spend too much but then others wont have a job, unfortunately america needs spenders to create other jobs for other people so they can become millionaires too, but dont worry about the other guy, just get yours. its important that u become rich and dont have any children ,they cost money! u should have one govt retirement, 10000000 in the bank and house paid for at 60, so what?

        • 47

          Christo says

          I disagree on the government job bit. Anyone working for the government almost has to practice in fiscal irresponsibility in their job. In Government positions financial sense often goes punished. If you work for a department that can show that they can do their job efficiently and under-budget, then they will lose whatever surplus they had for the years going forward as the money is then rewarded to those who could not do it efficiently and responsibly. (Almost exactly the opposite of what any successful business practices. If the Government were forced to earn it’s income as a business they would probably have to close up shop within a couple months.) So there is more incentive to just not care about budgets – and practicing sloppy money management on the job will probably show up in being sloppy money managers at home.

          • 48

            Len Penzo says

            I’m positive that we can’t lump all gov’t workers as being sloppy money managers. However, I completely agree with your assessment on the inefficiency and wastefulness of gov’t. There is no reason to manage money closely because: 1) the government usually has no competition from the private sector; and 2) they get their operating revenue from taxation.

    • 50

      Mike says

      Being wealthy by being frugal doesn’t make one evil or greedy. They give up some pleasures and luxuries in exchange for piece of mind and long term safety.

      Here’s an example I use to help my friends understand where their money goes. One guy spends $50 a week on cigarettes or beer, while another guy puts $50 a week into savings. In 10 years (not including interest or gains for simplicity purposes) the saver will have built up $26,000.00. In that same 10 years, the smoker has spent $26,000.00. Guess what, the saver is now $52,000 richer than the smoker! For those of us who love to spend, add in 2 new 5 year car loans, new carpet and furniture and a few cruises and now you’re talking a huge gap!

      Give up smoking, new cars every 3-5 years, eating out, etc and you could take a luxury worldwide trip with your spouse, and still have a nice safety net left over. I’m a recovering spend-a-holic myself, it’s tough but you don’t miss things as much as you’d think, if you can break the habit.

    • 51

      BonHomme Richard says

      Well, I understand why HIS millionaire neighbor doesn’t want to talk to him. With such closed minded prejudice and false info, I don’t either.

      Anyone want to bet a million that he doesn’t work, and strongly supports “redistribution of wealth”?

    • 52

      scott says

      Wow Pete,
      You must have a direct line into the thoughts, atitudes, and bank accounts of those you so ignorantly chastise. Or not. I’m guessing not. You should take a look at some of Dave Ramsey’s stuff – live like no one else now so you can live and give like no one else later. Giving is a huge part of becoming wealthy, but I doubt you understand that. Also, each one of your bullets speaks pure ignorance. Shame on you.

    • 53

      Fred says

      Hey Pete,

      I’m not so sure Im qualified to respond, you make the call…

      I am not the millionairre next door. I am the multi-millionairre next door.

      I served 22 years in the military. Ive put my life at risk multiple times in multiple theaters of war. I flew fighters for the USAF.

      I tithe, I drive a nice car, give my kids what they need and usually what they ask for, although not always. I donate time and money to various charities. I tip our house cleaners, I tip the pool guy, I even give a tip and thank you card to the trash service drivers. I have two airplanes that Ive donated lots of time and money to the betterment of Aviation and the gift to underprivileged kids.

      Ask my wife and people that know me if they think Im boring. Mostly, they ask me to slow down for just a moment. I say ok to them, but can we do it in Maui?

      I have randomly paid for people’s groceries at the store. I send cash for Christmas and dont fret about mail theft. I tip very well when I play BlackJack in Vegas.

      I could go on, but the one I cant seem to have an answer for is your number 6.). You are a fool. Well yes Pete, I think you are misguided and misunderstood, but I think youre not a fool, even though you make foolish comments. Satisfied?


  16. 54

    James says

    I’d say Pete Crackel has money issues. What he sees in others is how he perceives having money in his own mind. A discussion of money brings a person’s internal financial blueprint bubbling up to the surface. The old saying, when you point a finger at someone else there are 3 other finger pointing back at you. What bothers you most about other people are often the traits you would exhibit yourself. It’s very revealing and good therapy if you use it as such.

  17. 56

    CA Resident says

    I might also add…be satisfied being a renter. There’s a myth in the USA that you “have” to buy a home to be successful, or – even weirder – to make/save money.

    I am have substantial savings, and one of the things that enabled me to accumulate it was happily living in a studio apartment rental until I was almost 40. It enabled me to save lots of money, and still have discretionary funds for travel and living it up. Being happy with that as my home was a HUGE advantage financially. I now own, but it is a huge money suck, and I bought a house to have a patch of grass to call my own and wanted a house to grow old in and modify as I like, not because I have any illusions that it is the financially wiser thing to do.

    Oh yeah – and cars? Agree on that. I’ve owned two in my life. Both bought for cash, and I drive them into the ground. My current car is 14-years-old, faded by the sun, and a bit dinged. But I still plan on having it another 5-10 years.

    • 57


      Well said. Home ownership is not for everyone, and that is okay. When I was in my twenties, I used to have a boss who was much older than me (he was in his 60s and close to retirement at the time) who was financially very well off. I was shocked when he told me the big house he lived in was rented — and that he was a renter all his life. He gave the exact same reasons you did. It really made me think, although I ultimately decided I wanted to own and not rent.

  18. 58

    Home Saver says

    I love this post!

    I especially love the part where you go to his house and he gives you a lift home in his 10 year old car.

    Did you recently read the book?

  19. 59

    frugal and comfortable says

    work for companies that have good retirement plans
    do matching funds with company
    don’t be greedy when stock prices go up..
    don’t hold stock for long-term
    don’t use a paid investment planner
    put money in savings
    don’t go to resorts or expensive hotels
    camp on vacations until your home is paid off
    use nature and free or low cost entertainment..
    government home tours…parks..museums..festivals
    buy home when market prices are down
    buy home in location where property values are down
    and therefore taxes are low
    supplement you child’s education with tutors instead
    of expensive private schools. always have a math tutor.
    send kids to state run colleges not private colleges
    buy a used home and fix up modestly
    learn to paint home
    do repairs that you can physically do yourself
    go to self-wash car washes
    buy pulled meat
    buy all furniture at thrift of consignment stores or
    have furniture re-upholstered
    use a digital antenae for TV and netflix
    don’t have a hard line phone..use cell phone
    buy jewelry at pawn shops
    don’t buy anything unless it is on sale
    don’t buy at antique shops
    shop garage sales for magazines, books, cologne,and decorator items for home
    buy manufactured homes for get-away homes
    – can be moved off if property values go up and you want to sell.
    buy land for get-away homes in hidden areas where property taxes are low
    assign home chores for family members instead of a maid
    buy one year old automobiles and keep for at least
    10 yrs
    have high deductables on insurance
    cancel comprehension insurance when car value drops
    sell used cars yourself. don’t trade in
    don’t go to car dealer for car repairs..shop and find
    reputable car and go to them repeatedly
    if you must buy items not on sale shop internet for best
    don’t eat out. learn to cook..

  20. 60

    Mick says

    In my opinion, most (not all) public schools produce dysfunctional kids which is why i use private schools (higher moral and academic standards). it will cost more in tuition, but pays off in the end. no amount of money saved will ever fix a child who cannot reason and/or stupid!

    • 61

      Janet says

      I don’t think it matters where a kid goes to school – public or private, it all depends on whether the kid is willing to learn or not. My siblings and I were the only one in the neighborhood who went to public school and my parents were ridiculed by the other parents, but we couldn’t afford private school. Now that i look back on my neighborhood, we are the only kids who accomplished a college degrees, bought a house for our parents ( we were living in a basement then and they were six of us) and traveling. The other kids in the neighborhood are either still finishing up their college degree (we are in our early 30s now), joined the army because they couldn’t afford college, dropped out, or working at retail stores. My parents worked hard and now they enjoy traveling and spending time with their grandkids. Instead of paying private school tuitions, they saved money for our college degrees which gave my oldest brother a degree in electrical engineering, my other brother a health science and nursing degree, me – a nursing degree, and my youngest sister – a biology degree.

  21. 62

    Ben says

    I used to believe that renting was the way to go until I had a landlady that decided she wanted to live in the house I was renting from her, and we had to move. Moving expenses burned up any savings versus owning, and then some. Then there is the stress involved with moving. With the housing market the way it is now, once you get the money saved for a nice down payment and the closing costs, owning a modest home is the way to go! One cannot look at their home as an investment. One has to live some where, and usu. home ownership is cheaper than renting.

    • 63

      Len Penzo says

      I agree, Ben. The key word is “modest.” Those who buy more than they can afford are often asking for trouble — especially when the economy is on the skids, because there is simply little room for error if one loses their job.

  22. 64

    Rachel says

    I remember that my freshman year of high school one of my best friends was a princess from another country (I am NOT making this up!), but she acted so normal that I often forgot that fact and she never once talked about her riches. She had to transfer at the end of the year, though, for some political reason. During my sophmore year, though, one of the guys that would hang out in my group of friends was incredibly rich and completely caught up in the latest technology and knew almost everything about it. He didn’t look rich, but he would constantly flaunt it and his knowlede to the point where some of us started to hate him. Seriously, stop acting so surprised at the fact that I didn’t buy the Nintendo 3DS yet! I’m saving up for college while living in a basic appartment surrounded by smokers and my dad is constantly trying to find a job just to pay the bills and for food! We’re not all born rich and lucky!

    • 66

      Stephen says

      I think that covers the two ends: seriously rich people tend to be used to the idea of being rich. That either comes out in various amounts as spoilt — you don’t realise how wealthy you are — or normal — why make a big deal out of something that’s just everyday?

  23. 67

    Mick says

    he also knows the ROTH is the best savings vehicle ever invented, does not invest in the stock market nor does he trust a prophet making a profit!

  24. 69

    David says

    Began saving in the first grade.

    By putting $ aside, one learns self-restraint.

    One learns to enjoy life at a lower spending level.

    It is fun to drive past a luxury auto dealership in an old heap knowing any car on the lot is her/his IF s/he wanted it.

    When a down-turn in income happens, the saver is self-trained to take the extra sacrifices in stride plus s/he has a nest-egg.

    The saver wears a smile & does not view what s/he sets aside as a sacrifice, rather, it is a lifestyle.

  25. 70

    Lynn says

    That Pete guy definitely has issues…My husband (9 yr Navy vet)and I have always paid ourselves first. We started saving for our child’s education as soon as he was born. We are now in our mid-40′s with our house paid off, cars paid off, no credit card (or any other kind of debt), always maximized our 401K contributions. I became disabled in 1995, but since we were already on a good track, we were fortunate that it did not break us. Our child went to private school from k-12, recently graduated from college with a bachelor’s and is on his way to get his Ph.d-which is being paid for through research grants. He has a 10 yr old car with 140K miles on it and also managed to have no college loan debt and still has 15K in the bank. We have been very fortunate financially-but I think starting saving early really is the most important tip. It is also a mind set of not spending every dime.

    Oh, and Pete? We are not cheap. I define cheap as someone who will pinch a penny at someone else’s expense. And we have helped family financially many times-only to never see that money again. And when we

    • 71

      brandy8652 says

      I hate hearing we are cheap..or money hungry..It always comes from people that i see will do anything for money..It is like they are mad at us because we dont struggle..or because Money doesnt rule us anymore we rule it..I guess it is like hanging out with someone who eats right at every meal..I have found myself making excuses why I cheat..life is short i want to enjoy myself..it is hard to cook every night..etc..So I try and understand..but the Cheap really gets me..You dont want to brag but I am sure we all donate to charity more than they do..because they are to financially strapped to be able to..

  26. 72

    Catherine says

    My Dad who retired early…from being a blue collar worker…is known to wear a white shirt/blue workpants….as his daily wear.

    And do you think he cares. He doesn’t.
    He is a millionaire…

    My Parents lived their whole life…with the attitude…if you can’t afford to pay cash for it…you can’t afford to have it.

    He was only once offended by the local police when he was walking up the street in the neighborhood he lived in for the past 45 years…and they stopped him to make sure he wasn’t homeless. They didn’t beleive that was his house, let alone his neighborhood. He said….”You must be NEW!” to the Police Man….and laughed….but said “Good…keep asking and keep the area safe”…

    Is it his fault that he bought in an area that would soon become very affluent….after all you know…Location, Location, Location for real estate.

    But that is the secret. Live below your means…and be comfortable in your own skin. If you can’t afford the coach purse…don’t buy it!

    But I agree with education. Spend money on your kids education. If they become self sufficient then you have alot less headaches in your later life!

    Needless…I followed the same path as my Parents…Didn’t spend money I didn’t have…and can say I created my own financial success by the time I was 30…by not spending….and investing in my 20′s.

    So you don’t have to be old to be a Millionaire!

    But you do have to realize….
    It is cool to use coupons and save money!
    A good honest mechanic is Priceless!
    Knowledge is power!
    Learn to read! Opportunies exit…everywhere!
    Volunteer-Generally you have fun and learn something!
    Get involved in your community-It usually is free!
    Cut your own grass.
    Clean your own house.
    Turn the TV off!
    Learn the tax code.
    Believe in God.
    Have faith in yourself!

  27. 73

    Alison says

    I have to disagree with the idea of working a second job. Time is money, and the time you spend working a second job for someone else could be used creating income streams. The more jobs you work, the more you pay in taxes, so you may not even be making a profit at the end of the day. Work smarter, not harder.

    • 74

      Len Penzo says

      But if you’re being honest, you should be paying taxes on your other income streams too, yes? So in the end, it all depends on whether you can create income streams that are more valuable than the money working a second job.

      • 75

        Jane says

        You do pay taxes on your other income streams, but if you are self-employed or own your own company, you can write off your operating costs (rent, cell phone, car for your business) and other things and reduce your tax liability. When you’re an employee, the only way I can think of reducing your tax liability is to sock money away for retirement.

  28. 76

    kayumochi says

    Lived and worked in Japan for 15 years and found it to be a country that has a culture that can allow for one to live simply yet well, unlike the USA. Of course, Japan’s single-payer healthcare system helps make life affordable …

    Someone mentioned millionaires not buying antiques … you may want to consider that the new $2000 sofa you buy at the Pottery Barn today will be worth ZERO in a decade while the $2000 antique sofa you buy today will hold its value and can be sold for at least what you paid for it. My house contains mostly antiques that can be sold quite readily and I didn’t pay anymore for them than I would have paid for high quality new furniture.

  29. 77


    It’s comical how so many folks who are deep in debt live like they are wealthy and folks who truly are wealthy live well below their means. I have met a few regular type folks who I found out later were millionaires, and they didn’t stand out at all. Your list sounds like a lot of the tips I read in the book The Millionaire Next Door. I enjoy reading about successful people who don’t flaunt their wealth. Thanks for putting together this list of tips.

    • 78

      Len Penzo says

      It is funny, in a sad way, Pam. I’ve never read the Millionaire Next Door, but the book sounds like it’s based on basic common sense — just like the tips presented here.

  30. 79

    Obino says

    Africa is no exception, thank God we can acquire wealth easily, but it really unfortunate when young people want to behave as if they’ve being working for 20 years. Now getting a used Toyota Corolla and Honda Civic means you are successful, and they go for as much as $9000 whiles making less than $1000 a month.It doesn’t make sense.

  31. 81

    Varkreker says

    Very good list, I agree on everything you’ve written. I should print the list and have a read every day after getting up :)

  32. 82

    btoblake says

    The things your nearest millionaire probably will say are often as helpful as the things they don’t say.
    1 – We enjoy cooking.
    (Most people can afford to eat far better food at home than they can at a restaurant, and they can save themselves and friends a lot of money by doing dinner in.)

    2 – You can probably fix that … by doing this…
    (If you can’t maintain or fix it, are you sure it’s not junk?)

    3 – I have the tools for that right over here.
    (and they’re in pretty good shape)

    4 – This is a great car. Yeah, my last one went a hundred thousand miles with hardly any issues.
    (Of course, you know how long he’s had it, because you’ve seen him in the driveway taking good care of it.)

    5 – We just went and visited ___, we stayed with them for a few days, and had a lot of fun.
    (They take a pass on hotel bills and tourist traps most of the time, and save that for special trips.)

    6 – You’ll get a better deal by ___
    (They usually don’t want to dish out tips on investments or budgets for fear of showing off, but they do like to help by sharing money saving hints. Whether it’s a grocery store, a repair man, a brand of clothing that lasts forever, or a set of recipes you can whip up instead of buying pizza, it doesn’t hurt to listen.)

    • 83

      Stephen says

      5 is absolutely true. Millionaires often have a lot of friends, not because of anything to do with their money but just because people who have a lot of friends have an advantage.

  33. 85

    kayumochi says

    Keep in mind that Germany has the lowest rate of home ownership in Western Europe … and the strongest economy. We have been fed the lie of the benefits of home ownership for decades and where has it gotten us?

    • 86

      Len Penzo says

      I would be careful tying home ownership rates with economic health, good or bad. With respect to Germany, it does have the strongest economy in Europe today. But keep in mind that everything is cyclical. Germany had a struggling economy for years while it was busy reabsorbing the eastern half of the country.

  34. 87

    Mike says

    Len, great article! I printed it and left it on the counter for the 15 & 16 year old to read. My boss taught me everything you printed and he retired at 48 with 2.0M in the bank. I’m 45 live exactly as you posted and on track to do the same. I challenge all to mentor their own employees and to teach these same principles. Thank you and keep it up.

    • 88

      Len Penzo says

      Thanks, Mike. And good for you! I love it when I hear real-world examples from folks like yourself. I can be done.

  35. 89

    Bagnes says

    all true. I have to say it is so nice to be on that other side, you know, the people next door you are writing about? And it does not take that long. only took us about 14 years for the first $$mm:)

  36. 91

    Nalchik says

    From personal experience, I would agree with all items except:
    #7 Not necessarily a job, it may be occupation or hobby that pays well or reduces your expenses.
    #10 Maybe, but this ignores the health insurance issue. Good insurance doesn’t always come with the job you love.
    Could be a job you like with good benefits. Frugal people weigh like vs. benefits and decide if it is worth it.
    #12 Worked just the opposite for me. Started small and kept saving. Found one day that all those small numbers turned into big ones. Kept working on small numbers and the big ones just multiplied.
    Whatever way we make it work, most important, is to set a strategy and stick to it. Like Paula Poundstone used to say “Just stick to it!”

  37. 92

    Nick says

    I think frugality is not a key to becoming a millionaire. What most people do not understand is that to be rich, an element of creativity comes into play. Living cheap counts at the lower levels just to give you a strong foundation through savings and investment. Once that is catered for, your ingenuity and business savvyness come into play. Otherwise why do people ride in private jets, live in expensive homes and drive top of the range cars, and at the end of it all, still pull in millions a year. Save and invest but that will never make you rich, create leverage in business and you will be forever rich.

  38. 95

    drdrill says

    len, thanks for the tip. i think i’m in the wrong category. i live in the mcmansion, have 1 overpriced luxury car and spend way too much money. i make 300k+ and live paycheck to paycheck. decided a while ago that there was more to life. put house up for sale($1.8million) and bought a more reasonable one. luckily i will make about 300k on a house i bought in 2010. i’ll then have $500k liquid, no debt but for my mortgage and business loan and will have the weight of the world off my shoulders. financial freedom will be such an emotional relief that i am giddy at the prospect. now if i can only get the wife on the program

  39. 96


    This is a great summary of Thomas Stanley & William Danko’s “The Millionaire Next Door”

    They also offer a formula for ballpark estimation of where your wealth should stand compared to your age:
    Net Worth = [your age (x) annual income]/10
    In other words, multiply your age times your pretax annual household income from all sources (including your salary, your spouse’s salary, passive incomes such as rent, etc.), and then divide that number by 10.

  40. 97

    Kevin says

    I am 24 years old and scheduled to pay my house off on my 25th birthday in May. I would say the biggest thing young people should be taught is that you don’t have to go to a Big expensive university to get a college degree. Many of my friends went away to school and racked up 50 to 60 thousand dollars in student loan debt. I went to a tech school and finished my bachelors degree online. Now instead of paying off school debt I have 75000 saved in my 401k and will be 100% debt free including my house in 9 months. I think people should preach to young people unless you are going into a very specialized field you should not spend 60,000 on an education to only make 40,000 or 50,000 in your career

    • 98

      Bud says


      I wish I was as smart as you at 25. Way to go buddy !! For most, maturity comes with age. Then there are some who attain the emotional quotient of a sage at a very young age and seem to possess wisdom beyond their age. They make sound decisions and also seem to articulate it all so well – be it career or financial decisions. You are one such rare gem and you are on your way to success in life.

  41. 100


    I live in a very mixed neighborhood in London, with the quite rich and the quite poor. It is interesting when I go to the local outdoor food market that the wealthier people are shopping at the fresh fruit and veg stalls while the poorer contingent are shopping at the very expensive supermarket buying their produce prepackaged. The supermarket is on the same street literally spitting distance from tons of fresh, very cheap, at least 30% less, but maybe not beautiful produce.

    It is like they are showing off by shopping with a price gouging corporation instead of with individual stall owners.

    There is quite a lot of this in London, especially when new mobiles come out. Everyone runs to sign up to get the latest model.

    Absolutely ridiculous!

  42. 101


    I worked in pest control for a few years and met quite a few rich people. I don’t know if all of them were actual millionaires,but several were definitely multi-millionaires; I knew the businesses they owned. As an example, one of the latter had a high school age daughter who said she grew up in the ghetto (4 bedroom house with no pool and the housekeeper only came three days a week!) and how she wanted to be a doctor until she found out that “they don’t make sh*t!”

    Anyway, I found them to be a mixed bag from happy-go-lucky party types to Ebeneezer Scrooge. They only thing they all had in common were large incomes.

    • 103

      Len Penzo says

      Um, take another look at the author of that piece you saw in Business Insider and then get back to me. (Hint: His name was Len Penzo.)

  43. 104


    So true! I find it baffling how everyone around me (and especially in the nearby town which is known for being “well off”) spends all this money on expensive luxury SUVs and eating out all the time. I drive by in my beat down gold 2002 Dodge Neon (which I bought used) to “splurge” on Chipotle, while they’re driving BMW SUVs over to Cheesecake Factory to eat a weeknight dinner. And I’m pretty willing to bet I make _more_ than them. It’s like everyone assumes that as long as they can make the monthly payments this month then they can “afford” it.

  44. 105

    SG says

    Yup… just described us. We drive 10 year old cars, live in a 1,200 square foot ranch, and buy most everything at thrift shops and garage sales. We want for nothing (in fact, I had to hold my own garage sale this summer to get rid of stuff), and we are on track to retire in two years at ages 54.

    My advice to younger people? Seek enjoyment in experiences over things… we enjoy hiking, biking, kayaking, gardening, cooking, music and spending fun times with family and friends. Oh, and start saving as soon as you land your first job out of college; max out those 401k’s. The compounding REALLY does work! Get a good, honest financial advisor; shop around for the best.
    …and college? Study hard to get scholarships. Apply yourself! It makes life easier later on when landing jobs and seeking freelance work on the side… they’ll be lining up to give you work!

  45. 106

    Darlene says

    This guy sounds like my dad. I’m so proud of him. He’s worked hard his entire like and drives a 22 yr old Camry. We went to Vegas for Christmas and my dad wore “comfortable” clothes. While in a fancy shopping center on the Strip, some 30-something in a fancy suit scoffed at my dad’s lack of style. I’m incredibly proud of my father, as I said above, because what he lacks in style he more than makes up for in class (a real knack for treating people with kindness) and intelligence–with diverse investments to boot!

    My dad now works in the laundromat he owns and spends his days playing chess with his customers.

    He became a millionaire by frugal spending, saving money, and hard work. He also paid for college for me (>$100k) to get me started with a debt free life after school. He’s made lots of mistakes as an investor, but he and my mom have done a great job keeping everything afloat. He also finally bought himself an iPhone, but it was free from the refurbished stock at Best Buy!

  46. 107


    This neighbour you speak of may not even be a millionaire exactly, but by doing the things you’ve listed he/she can feel like a millionaire by living freely.
    7.8 MILLION millionaires sounds scary considering how much poverty is so widely spread. I would hope if I did have a millionaire neighbour (I’m British, so I don’t spell it ‘neighbor’ :P) he would be giving generously to the charities he’s passionate about. I’d hope we all we would, especially if you’ve stared into the eyes of poverty yourself.

  47. 108

    Eddy says

    Yupp. my best friend in the world has been dealing a key or so a week for over 35 years now, and I’m sure you’d think he was poor. shitty old car, small house, only wears cheap black tee shirts. yet he’s clearing 10k a week, subtly will always win.

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