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, Reuters reports that in 2009 there were 7.8 million millionaires in the United States.
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 interest 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.
Please?
Thanks. You’re a peach.
Subscribe!
via Email 
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.
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?
For the big over-sized homes, the fancy cars, and the private schools? And for starbucks! Chaaaarge!
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?
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.
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.
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.
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
@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!
Len,
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.
@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.
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.
God stuff Len. How would you define millionaire though? Cash / liquid assets in bank, or everything?
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.
@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.
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.
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)
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.
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.
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.
this was really creative and a great we to get some what i feel as honest straightforward feedback.
@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.
I assume you’ve picked up cash flow for kids for them Len?
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.
Just wanted to let you know I linked to this on my Global Asset Strategist Facebook page.
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.
@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!
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.
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.
Wow. Tough crowd. Sounds like one of the neighbors has got issues.
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.
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.
I’m not sure what you are talking about here, Dave. Can you be more specific?
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!
Thanks for the tip, Dave. I’ll check it out!
[...] This post was mentioned on Twitter by Good Hands Community, 2 Cents. 2 Cents said: RT @LenPenzo 19 Things Your Suburban Millionaire Neighbor Won't Tell You http://shar.es/mjNGT <- Love it! [...]
[...] Len Penzo -19 Things Your Suburban Millionaire Neighbor Won’t Tell You [...]
[...] Len Penzo discusses the 19 Things The Millionaire Next Door Won’t Tell You. [...]
[...] Save Invest Len Penzo – 19 Things Your Suburban Millionaire Neighbor Won’t Tell You Little House in the [...]