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Can You Spot a Millionaire? I Doubt It…


millionaire?What’s your mental picture of a millionaire? A 39 year-old man dressed in a fancy suit? Accessorized with a Rolex that can probably tell you the time in 4 different time-zones? Stepping into his brand new foreign car that costs more than you make in an entire year? This is what most people think about when they visualize a millionaire. If they see someone with these expensive items, they instantly label them: Millionaire. BUT, this perception of a millionaire could not be more false.

Big Hat, No Cattle

Many of the people that look wealthy today actually have a bank account that’s often hovering closer to zero than it is a million bucks. They finance nearly everything (their house, cars, furniture, appliance, and even their TVs!), which means that they have a bunch of stuff, but absolutely no cash flow. Their solution to gaining more spending power is by applying for another credit card! These people have the appearance of a millionaire, but they have absolutely no assets to back up their apparent wealth. As the Texans like to say, they have a big hat, but no cattle.

Have the Cattle – the Hat is Optional

If you want to be a millionaire so that you can flash your cash and live the high life, then I’m sorry to say, but you will never be a millionaire. With the easy access that all of us have to credit, you could buy a fancy vehicle and high-fashion clothes whenever you want to – you don’t have to be a millionaire to buy nice stuff these days.

According to the book, “The Millionaire Next Door” (one of my favorites), the top three reasons that millionaires acquired their wealth are:

  1. They live well below their means
  2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth
  3. They believe that financial independence is more important than displaying high social status

What Millionaires Actually Look Like

Instead of fancy cars and a mansion, true millionaires carry a much lower profile. Often times, they live in a simple neighborhood with a simple 3 bedroom, 2 bath house, and are surrounded by people that make far less money than they do. Social status means nothing to them, and by avoiding the Jones’s next door, they are able to hold onto their money, rather than spend it on depreciating assets like a boat.

They often own their own businesses (2/3 of them in fact) and look more like an employee than they do an owner (no flashy suits for them). Half of the wives do not work outside the home. If they do, they are quite often teachers because their occupation schedule aligns with their children’s. Instead of spending all of their money trying to impress their friends (as most of us do), they put their extra cash towards their long-term investments. In fact, their yearly income only accounts for about 7% of their overall net worth, which is a testament to what can happen when you live below your means.

So what life are you hoping to live in the future? Do you just want to wear nice clothes and drive fancy cars, or do you actually want to accumulate wealth for your future self? What are you doing to ensure a wealthy future?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. The Millionaire Next Door is the book I pull out when I feel like my financial train is derailing…the ideas therein have provided a sort of True North as far as the journey to financial independence is concerned.
    I’d much prefer a smaller hat and lots of cattle and to that am living way below my means and putting my money to serious work for me…am also considering pursuing running my own business, ultimately, thats the best to not only merge my passions and provide value to others but also hopefully increase my income.

    • It is a definitely a good idea to keep this book handy and use it as your True North reference. Mine is always handily on the bookshelf, just waiting for me to pick it up and gain another nugget. 😉

  2. I absolutely love the book. It helped me understand where I made mistakes in the past and it shows me that not being ‘cool’ is not wrong. My financial security matters more than some strangers’ approval and admiration.

    • That book is just jam-packed with valuable information isn’t it? Sometimes it’s too much information and I have to set it down and come back to it. I’ve definitely learned a ton though.

      • A great idea. I think I should read it again, there’s surely a lot more information to get from it.

  3. The Jones’s generally rent, lease, their expensive cars to make them more affordable and leaves them with no asset in the end. Again, like you said Derek, giving the appearance of wealth at all costs.

    • You’ve got that right David. Anyone can look wealthy by leasing or simply taking out a loan and making payments. But, the truth about these people will come into the light in their later years. If you were busy acquiring wealth the right way, you will be living large and they will be struggling to get by. That’s just the way it happens.

    • Really loved a sentence in Dave Ramsey’s book” don’t keep up with the Joneses, they’re broke”. Really a good idea to just mind our own business and create our own image of success

  4. Big hat, no cattle. I don’t think I have heard a truer comparison. Like you said, if you own (or lease) all of these flashy things you will never be a millionaire. In order to get ahead you need to learn to live below your means, save your money every chance you get and invest it wisely. I think sometimes it is hard for the younger generation when they see all these flashy new toys coming out but in the end your personal finances will take a plunge and you won’t accomplish anything.

    • I love the phrase too! I’m not even close to being a Texan cowboy, but the visual is perfect. I would much rather have the cattle and no hat. Sometimes though, a little hat would be nice. 😉

  5. Derek- I completely agree with you!

    I read “Millionaire Next Door” this year and I remember thinking that I used to care what people think about my car, house, clothes, etc but now I just think about saving that money instead. I think I’m going to dust off my copy and read it again. Thanks for the inspiration.

    Thanks for reminding me that it’s all worth it in the long run!

    • It’s a great read isn’t it? I love that they actually did the research to discover what millionaires are actually like. Right now I’m driving a $2,500 vehicle. It doesn’t have any rust and it’s definitely dependable, so what more can I ask from a car? My friend just recently bought a fairly new Audi. I tried to be supportive, but I’m sure he saw right through me…. 😉

  6. Yeah. Most millionaires really know how to live below their means, that’s why they are able to maintain their living status and pass it on their children.

    • You got it Mark! When you live below your means, you have a ton of cash flow. This allows you to invest and become wealthy very quickly. Thanks for the comment Mark!

  7. My mom is a multimillionaire. Guess where she lives. In a trailer park. My parents moved there to be close to my older brother and his family who already lived there. My dad passed away shortly after they moved. My brother and his family moved out of the trailer park several years ago. My mom, however, seems to like living there. She walks her little dog around the various duck ponds and talks to many of her neighbors.

    • Interesting. My mother too has quite the fortune and she recently told me she was interested in getting a new car and trading in her 2008 Subaru. I wasnt surprised when she pulled into my driveway in a 2014 Subaru.

      • That can happen occasionally. If someone has amassed a large fortune, a new car price is still a very small portion of their bank account and therefore has little impact. According to the book, this is roughly 15% of millionaires (don’t quote me on that – it’s for memory).

    • Haha. I love that your millionaire mom lives in a trailer park. I actually have considered moving into one myself (assuming it’s inexpensive living – I didn’t look into it that closely). It’s best to stay far away from people that are fighting for status, and what better place to do that then at a trailer park? 🙂

  8. I’m definitely going for the wealthy route rather than the flashy route. Hopefully we’ll make it one day, but it is still a ways off. We have to pay off my wife’s student loan debt first and foremost!

    • Me too Lance! The more we sacrifice today, the faster we’ll amass our fortune! Good luck with your debt. It sure feels great when it’s gone!

  9. The few millionaires that I know, most people don’t even know they have that kind of money. They are buisness owners that wear jeans and t shirts just like their employees. They may be referred to as “closet millionaires” since they don’t show off their wealth to the world. These guys are also known to be very “frugal” with their money. I’d much rather have money in the bank than a fancy car, house, and clothes.

    • And they’re often the nicest people you’ll ever meet. Humble, giving, and always smiling. Am I right? Thanks for the comment Tim. Always good to hear from you!

      • Yes, you are right

  10. Ideally, I want it all – big hat and big cattle.

    But while I’m working out how to get there, I’ll stick with the saving and investing path, with occasional celebrations to enjoy the trip along the way.

    Millionaire Next Door, along with Richest Man in Babylon, is one of the books I recommend the most. Informative, and easy to read.

    • It sure sounds nice, but I think the more you work for your money and the more you see the foolish spending of your friends (and the lack of happiness it brings), the fewer things you’ll desire in life. If you want to spend your money, spend it on experiences with others. Building relationships creates some of the best memories and the most happiness.

  11. I want to be a millionaire with occasional “big hat” experiences. Particularly when it comes to travel. I don’t want to have to limit my taste for adventure.

    • That sounds perfect Stefanie. Having money and experiencing life is probably the best way to go. All of that expensive “stuff” just turns into junk eventually anyway. 🙂

  12. It’s really funny that as our net worth has grown, my need for things and status had diminished. Right now, I drive a 1999 Honda Civic. When I went to look at rental properties last week, the realtor kind of gave Yertle (the Civic) an odd look. I told her I drive a beater so that I can afford rental property. I’m not sure she got it, but I hope to be like that always. I admire people with wealth that don’t flash it around.

    • Haha. I think I’ll be the same way Kim. I’m still driving my 2001 Honda Civic with 205,000 miles (still purring like a kitten by the way). I’m sure I’ll get the same looks when I meet up with my realtor too.

  13. One of my sister-in-laws once said to my wife and I: “Aren’t you embarrassed driving that car that looks like junk”. My wife’s response to her (which happens to be her sister), was “No, I’d rather have a paid-for car that runs and we can still drive it than to have a loan on the car just to make sure the car looks really nice”.

    I gave that book to one of my nephews, but I don’t believe he read it (push as I did to get him to though). I recently gave him a challenge to get his 401k and savings/brokerage accounts up to $60k by the end of 2015. If he wins I’ll give him $100, if he doesn’t I won’t give him the money. Some people seem to have to be instructed in different ways I guess.
    Why did I pick $60k? Because I read an article recently which mentioned that the average 401k had $59,000 in it. I told him I didn’t want him to be average.

    • Wow. Sounds like your sister-in-law doesn’t have a whole lot of tact… but she probably doesn’t have a whole lot of money either since she’s so worried about what other people think. I think it’s awesome what you’re doing with your nephew by the way. Sounds like he has a pretty wise uncle! 🙂

  14. When I was younger, I completely bought into the image of a millionaire. After reading The Millionaire Next Day my image changed. Then when I worked for a high net worth advisor, my image completely changed. I would get to know men and women that were worth $10-$15 million easily and they looked like you and me. In fact, I would think some of them are poor if I were to see them in the grocery store!

    • So did I Jon! When I was 20, I joined a network marketing group and when I started making $500 a month, I was going to lease a brand new Mercedes. I think the next thing on the list was a yacht. Thankfully, through that experience I actually learned how to be a good steward of my money, rather than just blow it on stuff. Oh, and about your grocery store comment – I’d be willing to bet that there are more millionaires walking through Aldi than some high-class grocery store. 😉

  15. I have heard so many great things about The Millionaire Nextdoor. Thanks for motivating me to pick it up — I just reserved it for pickup at the library. It’s about time I read it!

    • Glad to hear it Rebecca! Just so you know, it’s not the easiest of reads if you’re not into numbers, facts, and figures. But if you take it slow and read it in chunks, it is jam-packed full of nuggets! Let me know how you like it!

  16. Nice article, feels like I did a mistake buying a 2009 BMW last week. Although it was all cash transaction.

    • I guess it’s all relative. If you are earning $300k a year, then the $20k that you spent on the BMW is probably just fine. But, if it took you over a year to save up the cash to buy that car, then I would say that it probably wasn’t worth it.

  17. That’s a book I need to put in my list and get soon. Delaying gratification and holding off temporary pleasures are definitely worth the bright future I plan for myself. A wealthy and well-planned future is really the push that motivates me.

    • If I follow the plan that I have for myself, I could really be job optional in 10 years and have no debt. Sounds good to me! Definitely pick up the book. It’s heavy reading at times, but everything in there is factual and fascinating.

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