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.
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Tim, you see this behavior often in the real estate and mortgage industry…when things are good, RE agents and LOs are driving mercedes and when they turn, there’s a for-sale sign on their “rich lifestyle” belongings. I think there is a social pressure some may feel to have a certain “image”.
I remember when I was a new title rep at Chicago Title (I think I had just turned 21–they wanted me to be old enough to be able to socialize “after-hours”); I was one of the youngest title reps that office had ever had and I was not very “established”…anyhow…I remember the “seasoned” title rep ladies taking off their shoes and oohing and ahhing over the brand names. I walked over and took off my shoe and told them “JC Penney’s”.
Rhonda, I’ve never read Thomas Stanley’s earlier books, but I will now. Real estate is an easy pick because it is our living but, realistically, this book applies to everyone and in every type of business. The research and tables are very interesting. Tough to put the book down.
I read the Millionaire Next Door years ago…but not the others. I’ll pick them up–I’m glad you shared this!
Tim, you see this behavior often in the real estate and mortgage industry…when things are good, RE agents and LOs are driving mercedes and when they turn, there’s a for-sale sign on their “rich lifestyle” belongings. I think there is a social pressure some may feel to have a certain “image”.
I remember when I was a new title rep at Chicago Title (I think I had just turned 21–they wanted me to be old enough to be able to socialize “after-hours”); I was one of the youngest title reps that office had ever had and I was not very “established”…anyhow…I remember the “seasoned” title rep ladies taking off their shoes and oohing and ahhing over the brand names. I walked over and took off my shoe and told them “JC Penney’s”.
I don’t know if the book is any good, but the point being made is absolutely true about the United States and its citizens. We believe we have unlimited wealth/power to bestow upon ourselves (and the rest of the world – whether they like it or not).
But, in fact, we just borrow on the American Express credit card.
I witness this everyday when I review loan applications.
I don’t know if the book is any good, but the point being made is absolutely true about the United States and its citizens. We believe we have unlimited wealth/power to bestow upon ourselves (and the rest of the world – whether they like it or not).
But, in fact, we just borrow on the American Express credit card.
Rhonda,
You will witness it again (Hawaiian style) in the email I just sent you!
PatentGuy, I hope it all works out! Happy Thanksgiving 🙂
Having designed many custom homes for clients with varying degrees of wealth, the above Post certainly rings true. It was interesting to see how these various very successful people managed their affairs- skillfully in most cases. JG
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I read his book waaaay back when his first book came out. Nothing that in retrospect that is ground breaking, but for people blinded by the ‘looking rich’ disease it is a definite wake up call. It is also quick to point out that if you are marketing to the people that look rich, you are probably missing your best clients by a wide margin.
As for myself personally, I know my family has definitely changed attitude on how we live since the ‘POP’ in the economy. Now we are more likely to be affluent when things turn around.
I will be putting this book on my ‘must read’ list.
Tim, here’s another point. When I show houses, I like to see if I can figure out a little about the people who live there, especially if I am going to be writing an offer on that particular property. No, I don’t snoop, but I do consider their lifestyle choices.
Do they have books? Are they tidy, or complete slobs? Are things so chaotic as to imply that this household is out of control, either financially or otherwise? I like to look at art work, gardens and colors, just for the enjoyment of that too.
What I’m seeing in recent years, is fewer bookshelves, fewer books. I often see TV’s in every room, and sometimes if the family is at home when I’m showing homes, I see family members alone in different rooms, all watching different TV shows. Sometimes they are online, but most often, they are watching TV.
I don’t mean to sound so judgemental, but books are still important, and I’d sure rather see the families of TV watchers put on their shoes and go for a ride, or take a walk when I’m showing their home. It’s disconcerting to see them all in separate rooms of their homes, alone.
Leanne- It’s not snooping- it’s due diligence as an agent- or an architect. You have to know something about your customer/client (Seller and/or Buyer) to do your job. JG
Tim, here’s another point. When I show houses, I like to see if I can figure out a little about the people who live there, especially if I am going to be writing an offer on that particular property. No, I don’t snoop, but I do consider their lifestyle choices.
Do they have books? Are they tidy, or complete slobs? Are things so chaotic as to imply that this household is out of control, either financially or otherwise? I like to look at art work, gardens and colors, just for the enjoyment of that too.
What I’m seeing in recent years, is fewer bookshelves, fewer books. I often see TV’s in every room, and sometimes if the family is at home when I’m showing homes, I see family members alone in different rooms, all watching different TV shows. Sometimes they are online, but most often, they are watching TV.
I don’t mean to sound so judgemental, but books are still important, and I’d sure rather see the families of TV watchers put on their shoes and go for a ride, or take a walk when I’m showing their home. It’s disconcerting to see them all in separate rooms of their homes, alone.
Jerry, Yep! Observing is key to figuring out what is going on.
I do have to smile everytime I think of what an old real estate friend of mine used to say … she would tell people “I’m a real estate agent, I have a license to tresspass!”, and the way she’d say it was so disarming and funny that people would just grin ear to ear.
I did read the “Millionaire Next Door” and “The Millionaire Mind” and suggest them to everyone.
One of the chapters sounded exactly like my family growing up where my father’s income/cash flow was high, and is still virtually impossible to duplicate by his children. So my adult lifestyle, honestly, is not as affluent as it was when I was a child (yes, it was a rich childhood).
High earning entrepreneurs like real estate agents need to be careful as role models to their children living realistic lifestyles. And we have all recently learned what it is like when your cash-flow drops and bills keep coming.
I look forward to reading this book.
I did read the “Millionaire Next Door” and “The Millionaire Mind” and suggest them to everyone.
One of the chapters sounded exactly like my family growing up where my father’s income/cash flow was high, and is still virtually impossible to duplicate by his children. So my adult lifestyle, honestly, is not as affluent as it was when I was a child (yes, it was a rich childhood).
High earning entrepreneurs like real estate agents need to be careful as role models to their children living realistic lifestyles. And we have all recently learned what it is like when your cash-flow drops and bills keep coming.
I look forward to reading this book.