16 Responses to “SGX C2W2D1: Millionaire Skills”

1. Mike Says:
   August 1st, 2005 at 5:17 pm

   Maggie, your thoughts regarding money and being a millionaire are interesting and not unusual. I know many frugal people who would agree with everything you had to say, however, I’m not one of them. Respectfully speaking, could I ask why you want to be a “millionaire”? Do you dislike working and want to retire early? Are you saving up for some big purchase? I’m not sure what you want to do with that money, but it seems a bit ironic that you criticize people for getting caught up in what you deem excesses, yet you seem obsessed with an arbitrary number that some writer has deemed to be the mark of financial success. Don’t get me wrong, it’s great to be financially secure, but is the person that travels around the world experiencing all that life has to offer and retires with a modest nest egg any less successful or worse off than the person that pinches every penny and at age 57 has a million dollars?

   I have an MBA from a top business school and I make a comfortable living, but I have no doubt your net worth is higher than mine for the simple fact that I believe you have to enjoy life while you can and if that means taking some nice trips or splurging with friends or family for those special occasions, or buying a nice gift for that special someone, then why not? When you’re 60 and sitting on a pile of cash, I sincerely hope you’re happy and not asking yourself why you didn’t take that trip to Europe 30 years ago when you were young enough to enjoy it. Best of luck. - Mike

2. Maggie Says:
   August 1st, 2005 at 5:54 pm

   Mike–LOL…but I DID take that trip to Europe–for two full years! And I did it on Uncle Sam’s dime when I was all of 22-24 years old.

   Why do habitual spenders always assume that frugal types never have any fun, part with ANY money, and live miserable, small lives just because they refuse to blow every spare cent that trickles into their bank accounts? It isn’t like that at all. Frugal people spend–but they think hard about it first and they sure as hell check to make sure it’s the best price possible.

   It isn’t about an arbitrary number or denying yourself of every bit of fun as you imply–it is about NOT having to work or worry about survival when I do retire or if the economy takes a downturn. It is about being able to provide well for the education of any children I may one day have, and not being a financial burden on them when I’m in my golden years. It is about being secure and happy because–guess what?–I don’t have any money worries hanging over my head and driving me to despair or anger.

   Some people derive joy from the accumulation of things and certain types of experiences regardless of cost. That is fine for them if they have the financial means to support it, but too many Americans are paying for lifestyles that are way beyond what they can afford with credit instead of making the most of what they have.

   I can keep myself entertained with a sketch pad and a pencil while sitting in the park or bookstore coffee shop, hanging out with friends in a cheesy table top gaming session, cooking a great meal for a potluck picnic on the beach, entertaining my friends and a bar full of people with some goofy karaoke while perfectly sober, visiting friends and family (using discounted airline tickets, of course), sewing my own clothes for a fraction of the cost by using designer patterns, and spending a day canoeing at a public spring.

   The older I get, the more I realize that the things that really matter to me can’t necessarily be purchased with lucre.

   And, yes, I do buy birthday and holiday presents for my family, boyfriend, and good friends, take vacations, buy myself gadgets, games, clothes, books, decent cookware, and fitness gear, and (gasp) eat at restaurants.

   I just make sure I have set aside my 25% into savings and retirement right off the bat, paid all of my living expenses on time, and gotten the best deal first.

   Knowing how much I need to set aside to reach that millionaire goal for retirement has the very nice side benefit of giving me the freedom to enjoy the things I do buy, own, and experience so much more–because I make damn sure I really want or need them before I whip out the credit card, and I know I’m not sacrificing my future in order to do so.

3. Mike Says:
   August 1st, 2005 at 7:21 pm

   Maggie, my goodness, why so defensive? You spent 2 years in Europe on Uncle Sam’s dime…great for you. If you want to go to South America, are you going to join the Navy and hope to get stationed there? My point is, it’s not about Europe or South America; it’s about choosing to do what makes you happy and not limiting that by being fixated on some arbitrary measure of wealth and security.

   Your dire picture of the fiscally irresponsible, although entertaining, was extreme and not an accurate reflection of the majority of people. That type of extreme perspective may help you justify your attitude, but the fact is most people are somewhere in the middle like me. I may not be saving 25% of my net income, but I have absolutely no doubt I’ll be comfortable in retirement and I’m not so concerned if my bank account balance has two commas or one.

   Honestly, I think it’s great if you enjoy drawing, playing games, or hanging out at the coffee shop. I wonder though, if the cost of drawing or playing games or coffee went up significantly and might result in you only saving 23% of your income, would you stop doing those things?

   Again, best of luck with all your goals. -Mike

4. Maggie Says:
   August 1st, 2005 at 8:42 pm

   For anyone just coming into this conversation, I’d like to point out that I just like to argue for the sake of arguing. I think I may have a streak of bombastic instigator in me from a previous life. :cyclops:

   Back on topic….

   Mike, some people, myself included, just flat out like the challenge of reaching certain goals for their own sake, financial, physical, work-related, or otherwise, and find the process of planning and doing the things necessary to achieve those goals just as entertaining or fulfilling as a suburban dad might find managing his fantasy football league team or a weekend golfer might find his monthly jaunt to a different part of the country for some time out on the links.

   I think it is just part and parcel of having an INTJ personality type. In video games I am a power gamer, meaning that I like to tweak every variable to maximize my score or my character’s stats. In fitness and diet I am constantly refining my program to achieve my fullest potential given my genetics. In my personal finances, well, do you really expect me or others like me to break form and be any different when it comes to money? I am who I am, and I’m quite comfortable with it.

   I enjoy all of my hobbies and interests, but as luck would have it, they do not necessarily lie in areas that will cost me a lot of money, so why not invest the excess instead? I can afford it without forcing myself to live a completely Spartan existence, and there isn’t anything else I’d rather spend it on, so it might as well earn me some interest in the interim until there IS something I want to buy or do with it. Alas, visiting South America is not on that list, though China, Japan, and Australia would rock in a year or two when I have the vacation time accumulated and the non-retirement funds saved up for a nice trip abroad. (I’d flunk the swim test for the Navy. In any case, I’ve ponied up and given my 8 years of contracted service to the country already, which is more than most people will ever do, so the rest of my travels will just have to be paid for out of my own pocket.)

   We are both writing from positions of relative financial security, however. You have a solid MBA from a good school and a comfortable income that allows you to do and buy the things you enjoy without worrying about having your electricity shut off or your retirement eighty-sixed. I’m making decent pay working what is considered by many young males to be a dream job in game development and am lucky enough to have no major debts or dependents. It’s easy for us to debate about our views regarding discretionary income because we both clearly have a surplus even after setting aside money in our retirement funds and paying our regular bills. I don’t think this is the case with many people out there. There are many younger people just starting out who would do better to scrimp just a little in their early years out in the workforce to make sure they don’t dig themselves into a hole so deep that it will take years of struggle to see the sun again.

   BTW, my sister falls into the category of being somewhere in the middle like you, and I’m sure she’ll be madly prosperous and happy in retirement as well, clad in kickin’ designer jeans, chatting into a cutting edge smartphone and coiffed to the nines. :slappy: She wouldn’t be the lil’ sis I know and love if she weren’t, and I wouldn’t want her to change if there is no need.

   I realize that not everyone will have the motivation or desire to take the path described in The Millionaire Next Door, and that is perfectly all right. We all have different priorities in life and different views on what is important. Some people are spenders, some are savers, and some are a hybrid of both. As long as we are all content with our chosen financial paths and their consequences, I see no point in trying to further belittle the choices made by others even if their decisions are not ones that you would make yourself.

   (Well, unless you are CEO/CFO of a large corporation who decides to embezzle millions of dollars from your employees’ pensions and retirement accounts, in which case your financial decisions should earn you a lifetime of penurious regret and misery in a low-rent prison cell with rabid rats the size of Rottweilers nibbling on your toes at night. Ruining the lives of hundreds of underlings should not be paid for with a mere legal slap on the wrist in my opinion.)

   Maggie, who doesn’t actually buy any of that overpriced coffee at the coffee shop when she draws :misch:

5. Leah S Says:
   August 1st, 2005 at 9:47 pm

   Maggie, sure enjoy when you talk about financial and money. I like the little eye-openers. Does being a millionaire mean in actual cash value, or in assets? If in assets, then my parents are technically millionaires (house/property) but they are just about flat broke trying run a plumbing company.

   I do see quite a few traits that can apply to my parents. My mom came from a family of 11 kids, money was always tight, so she’s always been pretty good with handling money. No designer jeans for her. They’re both in their 40s. My mom hasn’t officially worked since I was born, but she’s doing alot of the plumbing business’ paperwork/phone/customer stuff. They have 4 children. Neither of them went to college. They put in a good 60-90 hours EACH a week in the company.

   They still enjoy a few luxeries. My dad loves hiking/backpacking. He’s been known to splurge on equipment. My mom likes to sew and decorate the house. Can you say hello Ikea? :love:

6. Vic Says:
   August 2nd, 2005 at 2:50 am

   Your website clearly has a big following, if you wanted to be a millionaire you could do the following:

   - Make a television programme based on your blog entries and podcast it (I’m unsure if a Podcast type thing is possible with video).

   - Build up a big audience

   - Then build revenue through either affiliate marketing or sell your concept and content to a cable television channel

   Then from your millions of dollars you can pay me an annual royalty of 10% for developing the concept

7. edrummer Says:
   August 2nd, 2005 at 7:11 am

   Good stuff, Maggie. I think I can relate to how you view personal finance as an activity and a discipline. I brag to my wife about how my checkbook balances every month to the penny and she cringes watching me find the math error that made it 3 cent off. I tell her that if it’s 3 cents off, it could be $50 off. I’m more relaxed now that I do things on-line and most expenses directly withdrawn from the account (for free, of course).

8. Mich Says:
   August 2nd, 2005 at 8:05 am

   Well said. As I am disposing of too-large clothes at the moment, I certainly wish I had learned to sew. (Did take it in home-ec, but the results were, um, less than satisfactory.

   Not that you need the traffic , but I think you should consider submitting this post to the fledgeling Carnival of Personal Finance.

   Version 6 of said Carnival is here:
   http://www.freemoneyfinance.com/2005/07/carnival_of_per.html
   and version 7 is here:
   http://incashflowwetrust.blogspot.com/2005/07/carnival-of-personal-finance-7.html

9. Steve Mertz Says:
   August 2nd, 2005 at 12:54 pm

   Maggie-since you are reading the book, I don’t remember health care costs being an issue in the book. Most of my small business owners scream about the costs of health insurance and some have had huge financial problems becasue of no insurance-what a bite. If I were a betting man I’d say you will end up in the (multi) millionaire category. Good luck, steve

10. atomcjones Says:
    August 2nd, 2005 at 5:14 pm

    There is a much shorter path to financial independence - marry a millionaire. I have to agree with Mike that I value life experiences more than material possessions (or money itself). After all you only get one shot on this planet and you might not make it to retirement. It doesn’t mean you should spend irresponsibly, but people should enjoy themselves within their means. Don’t get me wrong, I think material possessions are also great. But why choose when you can have both?

    “Find a job that you love and never work a day in your life.” -aj

11. JLP at AllThingsFinancial Says:
    August 2nd, 2005 at 5:55 pm

    Cool blog. I like the way you think about money. You are fortunate to have your attitude towards money. If you stick to your own advice, it will pay you huge dividends. Now go out and spread the word!

    JLP

    PS - Have you gotten to the wealth formula yet? I wrote a piece on it on my blog.

12. Hazzard Says:
    August 2nd, 2005 at 7:30 pm

    Great post Maggie!
    You sound like a very goal oriented, logical, intelligent person. You will most certainly be a self made millionaire (unless you marry baggage :). I’m also a dilligent saver and am somewhat obsessed with my financial goals, but I’m not nearly as organized and goal oriented as you. I’m going to keep reading your blog just to see if your good habits will rub off on me! Keep writing!!

    Hazzard
    http://elym.blogspot.com

13. JB Says:
    August 16th, 2005 at 3:30 pm

    I think Mike is missing the point here.

    Living Below Your Means (LBYM) and investing does NOT mean living a life of deprivation forever.

    By saving and investing early, you will likely find that you can amass a large amount of money by age 35-40. I started saving 50% of my income right after college (hard to do on the salary of an Army 2nd Lieutenant) and have done so ever since.

    At that point, your “job” becomes nothing more than a SECONDARY source of income. Your savings/investments are you primary source.

    I’m 42, earn a decent, but not extravagant salary and have a net worth well over a million dollars.

    My BROKE co-workers still call me cheap because I usually brown bag my lunch, and when I do go out, I never spend more than $10 and certainly never buy a drink (a complete rip off- they charge you $2 for 5 cents worth of iced tea). Hey, a million dollars is nice, but its hardly “lifestyles of the rich and famous”- I’m not going to start spending extravagantly.

    Does that mean I sit in a 400-square foot apartment illuminated by a single bare bulb, eating nothing but ramen noodles? Of course not.

    I live in a nice, though certainly not ostentatious, home. When I need a new car, I buy one- for cash, of course (yeah, I know, its a better financial move to buy a 3-5 year old used car, but I can afford this “extravagance” at this point). I go on nice vacations (though I ALWAYS look for a bargain).

    I buy whatever I need and never need to worry about how I’m going to pay for it.

    My frugality has allowed me to have an effective income that is more than DOUBLE that of my “broke” co-workers. MY MONEY WORKS FOR ME RATHER THAN ME WORKING FOR MONEY (yes, I still work, but I can quit at anytime and never work again- that is a great feeling). I can live a higher standard of living than they do and still put money away.

    Trust me, it works.

    When I first read “The Millionaire Next Door” several years ago, I read the whole thing in one sitting- it does have some problems (e.g. the expected wealth calculator is pathetic, I expect more from a fellow Rensselaer Polytech grad :), but overall it is a great book.

    On a non-monetary note: Maggie is hot!

    No, I don’t mean the way she looks (although she does look great), I love intelligent, frugal women who game :).

    JB

14. JB Says:
    August 16th, 2005 at 3:41 pm

    One more thing.

    If you want to become financially independent quickly (and that, really, is the goal- to be able to live without having to rely on a “salary”), forego having kids.

    They’re noisy, messy, and extremely expensive. Every $10 you spend on disposable diapers is ~$70 you won’t have in retirement.

    If you need companionship, get a dog (or 2 or 3) instead…

    JB

15. TMan Says:
    August 18th, 2005 at 7:21 am

    Foregoing kids is kind of extreme, to save money and trying to be a millionaire. I was at an event 15 years ago, where Ross Perot was speaking, and he said that he wanted to be remembered as being a family man (his wife and kids were there), instead of the guy who built a big company and saved a couple of billion dollars (real money back then). I think that life is a balance, and it’s about personal choices. No choice is wrong as long as you made it willingly, and would do it again given the circumstances.

    I applaud Maggie for her dedication toward her goal, whether it’s to be a millionaire, or working toward a refined body style/shape. Go for it.

16. ath Says:
    December 5th, 2005 at 10:42 pm

    Maggie,

    I agree w/ everything you have said. It’s refreshing to know that there are females out there that think like you. I too am an INTJ and extremely frugal.

    I am 29 and my current net worth is almost $700K My dream is to retire in 5-10 years. (or whenever my net worth is 2.5 mil) I want my money to work for me instead of the other way around. You could say my ultimate career goal is to not have a career.

    What people like Mike never get is what you sacrifice today will be if properly invested(because of compounding) much better in the future. Additionally I don’t think Mike knows what he talking about when he says that the typical person is saving enough today….if that was true than why is the average savings rate negative?

    I guess we ants will continue to work towards a secure future as the grasshoppers “seize the day”!

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