Following a seminar on the subject of the meaning of prosperity a question and answer session was held. A transcript of that session follows.
Q. What is the biggest myth about wealth and income?
A. Looking wealthy is not the same as being wealthy. Many folks with late model cars are on leases. Some folks with mega mansions have a wall to wall mortgage. These people look good, but they are on an economic treadmill. How will they get off? What is their financial net worth?
Q. When you mentioned saving 20% of your income, what investments should you make with that 20%?
A. Index funds are very efficient. Recently Warren Buffet challenged a hedge fund manager to a ten-year experiment. Can an index fund beat a hedge fund over time? Answer: yes.
Q. What are the biggest factors or values in order to be successful and wealthy?
A. Focus, and the recognition that effort comes before reward. Reflect on this 1956 saying from Earl Nightingale: you say to the wood burning stove, give me heat, then I’ll give you wood.
Q. What is the one habit that I can practice daily to become more conscientious about wealth creation?
A. Thank God every day that we have the freedom to pursue opportunities in America! The Economist magazine did a study about what migrants seek in a new land. Top on the list is the ability to engage in free enterprise. Try doing that in a repressive regime!
Q. What is your reason for writing Richer Than A Millionaire.
A. To correct the impression that money is so extremely important. Money is like oxygen. You need it, but not more than you need.
Q. What are some other streams of incomes beside a second job?
A. Rental income is wonderful. Consider owning rental property. Dave, a guy highlighted in Richer Than A Millionaire, started out with a duplex. Now he owns 40 units. Of course, your diversified portfolio can give both appreciation and income.
Q. Why is it that your research found that more millionaires were located in the middle class neighborhoods than white collar neighborhoods?
A. This is true because wealthy neighborhoods require you to spend more. Ordinary neighborhoods allow you to live modestly while having autonomy.
Q. What is the biggest mistake someone can make fresh out of college regarding finances?
A. Buying a new car. Why not buy a good, used (depreciated) car, instead?
Q. How do the habits of the super-rich vary from the millionaire next door?
A. The super-rich have a different problem than the “plain” rich. The super-rich have trouble transferring their work ethic to subsequent generations. Look at the Kennedys. The patriarch made his money in real estate. The next generation did quite well, one president and another a senator and another an attorney general. But, what are their kids doing? Also, look at the Rockefellers. The patriarch made his money in oil. Now the charitable foundation has become something JDR would not recognize.
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New York Times bestselling author William D. Danko and Richard J. Van Ness, wrote the research-based book, “Richer Than A Millionaire ~ A Pathway to True Prosperity,” which shows the way to wealth and happiness through embracing traditional values. Washington Post’s Michelle Singletary selected this book as, The Color of Money Book of the Month. The $8 billion Vanguard Charitable fund website features our book.
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Content appearing in this article is inspired by the authors’ book. The book is available at Amazon.com and bookstores.