Tuesday, March 23, 2010

Tuesday Notes - True Riches

During my recent mountaintop get-away, I had the chance to again read The Millionaire Next Door, which I found on the nightstand of my weekend abode. 

As many know, this best-seller was published in the late 1990s, and describes how our perspective of those who we believe are "wealthy" is often so very distorted.

Specifically, the book goes into great detail explaining how many people incorrectly associate millionaires with luxury cars, expensive houses, watches, etc., while the vast majority of the truly wealthy typically did so under the radar by living unlavish lifestyles. 

Essentially, authors Stanley and Danko provided a roadmap of sorts for accumulation of financial wealth far different than that which most try to follow.

It was an interesting read as I mentally compared personal demographics to the book's "prototypical American millionaire", and did quite a bit of chuckling and head-nodding. More for fun than any significant analysis.

Here were some of the more comical comparisons:

Benchmark: 57 Year-Old Male with 3 children
Self-Check: 49 with 2 kids ... maybe we should have had that third one!

Benchmark: Many businesses they're in could be classified as "dullnormal"
Self-Check: About fell off the chair laughing on that one.

Benchmark: They have a "go-to-hell" fund, meaning one could live without working for ten years.
Self-Check: Check.  And yes, I've used it in that manner!

Benchmark: They are tightwads.
Self-Check: Let's see. The last new car we purchased was an off-the-lot Corolla without power steering or power windows in 1986.  Even Grace is now almost eight years old, and she already had 46K miles when I got her used.  I typically wear T-shirts and jeans, and had to buy a new sports jacket and pair of trousers before the NY presentation.  We live in a house built in the 1960s that needs paint in a modest neighborhood, and my favorite dessert is a Dairy Queen Oreo Blizzard ... small and preferably with a coupon.  I guess that's a check.

Benchmark: They hold 20% of household wealth in financial instruments.
Self-Check: Well, this one "depends".  Are we talking about at any given time during the day or end of day? And if I'm 300% invested for 15 minutes, and 0% the rest of the time, can I use my average??  OK, I fail that one... keeping in mind that the main reason there were more millionaires created over the last two years than in the past was that they started as billionaires.

As I said, it was a fun exercise, yet I wouldn't mind seeing the true portfolio of those on the covers of those "get rich quick" flyers that still find their way to my mailbox.  And yes, I got one today describing "the shortest way to turn $10,000 into $175,000".  Even funnier, the next line read, "It can almost guarantee ..." and then listed several incredible results.  Is that like being almost pregnant???

Diabetes Follow-Up - EMails continue to pour in response to recent posts, including notes from many Type 1 diabetic traders.  And yes, that was a real picture of Chelsea on the tennis court as her body was breaking down before beginning treatment.

Thanks to David who provided a link to a good interview with NY Jets owner Woody Johnson who unfortunately recently lost his daughter Casey at the age of 30 to complications from diabetes.  The interview also features Dr. Aaron Kowalski who does a great job of explaining the depths of the disease to lay people, and I encourage you to take a few minutes to view it.

Simply put, Type 1 is an hour by hour tightrope walk for those whose bodies can't produce any insulin to continually provide the body with just the right amount.  Too little and you die.  Too much and you die.  And prior to 1930 and subsequent advances in research and medicine, Type 1 resulted in unstoppable death within two years.

As Woody references in the interview, one of his diabetic business associates once described that he'd give up his millions to live just one day without the disease.

I'd do the same for my daughter.

And I'd be among the "richest" men on the planet.

P.S. Looks like yet another trading M.A.T.D. in the morning.  After today's classic open, it may feel like playing a doubleheader!

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