This past Sunday, I was given a book by a gentleman who by most measures is financially well off and more importantly is a success story both personally and professionally. The book he and his wife offered me is called, “Stop Acting Rich,” by Dr. Thomas Stanley (Ph.D) of famed bestsellers The Millionaire Next Door and The Millionaire Mind.
The real estate industry is an incredible laboratory. It provides us with an interesting foray of social and cultural samples and Dr. Stanley heavily uses housing early on as the springboard for this book. Perceptions of wealth and happiness seem closely correlated to what the cultural norms place on us and pressure people to become what Dr. Stanley terms, “aspirational Millionaires.” But, is true wealth achievable and what does it look like? If you emulate most real millionaires profiled, you won’t be driving a top tier BMW or always wearing Enzo Angiolini, Ferragamo or Allen Edmonds shoes.
In my view, much of what is written in the text is really a story about real estate and how housing shapes our habits of consumerism. And that is why is it a fascinating read into what people perceive as true wealth.
From the Preface in “Stop Acting Rich“:
The reason why so many homeowners today are having a difficult time making ends meet goes way beyond mortgage payments. When you trade up to a more expensive home, there is pressure for you to spend more on every conceivable product and service. Nothing has a greater impact on your wealth and your consumption than your choice of house and neighborhood. (emphasis added)
More exerpts from Dr. Stanley:
- My research has found that most people who live in million-dollar homes are not millionaires. They may be high-income producers but, by trying to emulate glittering rich millionaires, they are living a treadmill existence. (I know several people who are “aspirational Millionaires.”)
- In the United States, there are three times more millionaires living in homes that have a market value of under $300,000 than there are living in homes valued at $1 million or more.
- Most millionaires do not reach the millionaire threshold until they are near 50 years of age. Most became millionaires, in large part, because they led a frugal lifestyle. By the time they reached the millionaire category, they were set in their ways, so even after becoming wealthy, they typically remain frugal. (do you know frugal millionaires like this? I do.)
“Ours is a culture of hyperconsumerism. Not only can and do we buy nearly everything (except for the truly outrageously expensive), but we seen to have come to believe that we can and should have it all and that who we are is dependent on the ability to live the right neighborhoods, with appropriately sized homes filled with brand-name appliances, with prestige cars parked in the driveway with expensive golf bags and clubs in the trunk, and so on.”
“In a way, the credit crisis of 2008-2009 is serving as something of an intervention. But the for treatment to work, you must take a cold hard look at your balance sheet and at your life, and determine if you would be wealthier if you would stop acting rich.” – Thomas Stanley, Ph.D, author of Stop Acting Rich
This book should be at the very top of the list for those in the real estate business. Get rich slowly seems to be more in vogue today but, sadly, Dr. Stanley feels that although the recession may have caused many to take a breather, every indication is that we will pick up right where we left off when gentler and more favorable economic winds blow again.