How the "Rich people" really live?

[Dennis Ng]

I've people who came to me telling me that that to have "high networth clients", I should be wearing branded stuff, I should get myself a BMW or Mercedes, I should play golf in order to mix with the rich.

However, it's not things that I believe or interested in. If you know me, you might know that I don't own a car (I find it does not make economic sense to own a car in Singapore). To cut down on transport costs and time, I live near my parents and in-laws. I even moved my office to 10 mins' walk from my home. On weekends, I'm more likely to spend time with my wife and kids and read up on finance and investing. I've learned golf some 7 years back before I had my first kid, but figured out that it takes too much time and money to "improve my golf". I rather spend the time with my loved ones than on a golf course.

Do the rich really live it up like some people who told me so? I've my share of high networth clients but they don't really go "to display their wealth" through what they wear and cars they drive. Thomas J. Stanley wrote 2 books on Millionaire. In the book entitled "The Millionaire Mind", the results of his survey of more than 1,000 people who earn $1,000,000 a year or more also show that what some people say about "how the rich" behave might belong to only "minority few" rather than the majority. How do the majority of the wealthy really live?

Here're Thomas J. Stanley's findings:

- They live far below their means, and have little or no debt. Most pay off their credit cards every month; 40% have no home mortgage at all.

- Millionaires are frugal; they prepare shopping lists, resole their shoes, and save a lot of money; but they are not misers.

- 97% are homeowners; they tend to live in fine homes in older neighborhoods. (Only 27% have built their "dream home.")

- 92% are married; only 2% are currently divorced. Millionaire couples have less than one-third the divorce rate of non-millionaire couples. The typical couple in the millionaire group has been married for 28 years, and has three children. Nearly 50% of the wives of the super-rich do not work outside the home.

- Most are first-generation millionaires who became wealthy as business owners or executives; most did not inherit their wealth.

-90% are college graduates, and 52% hold advanced degrees; however, few graduated top of their class - most were "B" students. They learned two lessons from college: discipline and tenacity.

- Most live balanced lives; they are not workaholics; 93% listed socializing with family members as their #1 activity; 45% play golf. (Stanley didn't survey whether they were avid book readers, but I suspect that many are.)

- 52% attend church at least once a month; 37% consider themselves very religious.

- They share five basic ingredients to success: integrity, discipline, social skills, a supportive spouse, and hard work.

- They contribute heavily to charity, church and community activities (64%).

- Their #1 worry: Taxes! Their average annual federal tax bill: $300,000. The top one-tenth of 1% of U.S. income earners pays 14.7% of all income taxes collected.

- Not one millionaire had anything nice to say about gambling. Okay, but his survey also showed that 33% played the lottery at least once during the year.

We can see how the super upper-income families of this nation are not the ones contributing to crime, welfare, divorce, child abuse and a spendthrift society. But they are paying a lot of taxes and making a lot of contributions to solve these social problems.

Hmmm.....and I seem to share the same thoughts and beliefs majority of these wealthy have......what about you?

Cheers!

Dennis Ng, dennis@leverageholdings.com