This episode, Mak & G look at the lessons we can learn from The Millionaire Next Door, why you should never judge someone based on their appearance, and how to choose the right occupation.
The Millionaire Next Door is a great book that has 7 key lessons that can help us improve our financial lives.
It teaches us never to judge someone based on the way they look and that most millionaires don’t necessarily look like they are wealthy.
This “Money With Mak and G” podcast episode, Mak & G look at the different lessons we can learn from The Millionaire Next Door and how we can apply these to life to improve our financial future.
“Spend less than you earn.” – G
“You have to make great decisions on spending less money than you make.” – Mak
“Everything you want to be good at takes time.” – G
01:26 – How much Warren Buffett is worth.
05:16 – The history of Dim Sum.
06:34 – Why you can’t judge someone by their appearance.
07:27 – The financial lessons The Millionaire Next Door teaches us.
09:38 – The difference between being wealthy and looking wealthy.
11:05 – Why some parents don’t give their kids an inheritance.
12:15 – The importance of targeting investment opportunities.
13:04 – How to choose the right occupation.
Connect with Ben Jones:
#1 Where are higher-income families more likely to do most of their Christmas shopping, compared to lower-income families?
#2 What are lower-income families more likely to use to pay for Christmas shopping?
#3 How do 29% of Americans plan to pay off their holiday bills?
#4 How long did we calculate a typical $1500 credit card bill would take to pay off at average interest rates if you only paid the minimum amount?
#5 Prices today are around 50% higher than 20 years ago because of what?
A) 44 months
C) Ten years
GRANT: Hey, have you looked outside recently? All the houses around here are pretty cool, but not crazy big.
MAK: It’s a solid neighborhood for sure. It has that Old Town feel to it.
GRANT: Dad says it’s like something out of the show named Andy Griffith.
MAK: How could it be, wasn’t that show in black and white. These houses have super cool colors, you miss all that.
GRANT: Hey, I’m just repeating what he said. I guess some kid on the show named “Mopey” became some famous movie producer.
MAK: Grant, the character’s name was Opey. And yes he did some great movies. Mom loved Apollo 13, and grandma loved his movie “Cocoon”.
GRANT: Did you say Tycoon? Like Warren Buffet, possibly the greatest investor of all time?
MAK: No, but HE could have been in Cocoon. I think it was about old people and aliens. Sounds like a weird combination doesn’t it?
GRANT: Agree. One day, we’ll need to talk about Mr. Buffet, because there is a lot to learn from him.
MAK: Agree. He’s worth over $80 Billion. And “yes”, that was with a “B”.
GRANT: Didn’t I hear that he bought his house in 1958 for $31,500 and still lives in it in Omaha, Nebraska? That’s about $250,000 today.
MAK: I guess it’s worth more than that now, but for a billionaire, that’s not very much. Sounds like a lesson from the Richest Man in Babylon.
GRANT: You’re right, make your house an investment. Do you think anybody in OUR neighborhood is a billionaire?
MAK: I guess it’s possible. There are a couple houses in the back that are REALLY nice.
GRANT: I do know there is a doctor who lives across the street, he must be doing well.
MAK: I didn’t know that. But I think there are a number of people that own their own business in the neighborhood.
GRANT: That’s cool. I have a question. Dad showed us the picture of someone who “looks” rich, but who’s actually poor, and a picture of someone who doesn’t “look” rich, but is.
MAK: So, do you think that’s normal, like Warren Buffet? I heard when at home, he gets the value meal breakfast from McDonald’s and pays with change.
GRANT: I don’t know, but dad will probably know.
MAK/GRANT: Dad, do rich people look rich?
DAD: Hey kids come on down here. I’m in the kitchen
MAK: You don’t think he’s… Cooking … DO YOU?
GRANT: Please tell me that’s not true. He’s sure making a lot of noise down there and mom left for the store, so maybe…
DAD: Don’t be scared, come on down. I’m trying a couple new things.
MAK: Are you sure you know what you’re doing? O-M-G, are those crab rangoons? Seriously? That kind of smells good.
DAD: Yep. Take a taste, they’re pretty good. Don’t they smell great? There’s some soy sauce and onions if you like that or some sweet thai chili sauce, if you like that better.
MAK: Thanks dad. Wow, this is really good, what happened?
DAD: What do you mean?
GRANT: Well, this is kind of a first. You don’t exactly hang out in the kitchen for anything other than eating.
DAD: Wow, I make pancakes and eggs and…
MAK: Exactly. Hey, I love that you’re trying new things, it’s just very different from those things.
GRANT: And, what about me? I like crab rangoon, but I’m more of a dumpling man.
DAD: Well, then check the Insta-Pot. I have a dozen dumplings in there steaming right now.
GRANT: Way to go dad!!! You’re the best. Ummmm, they’re good right? You’ve tasted them already?
DAD: If you add enough sauce they’re great. I’m just kidding. Mom tried them and said they were pretty good. She didn’t die.
MAK: Did she help you?
DAD: Of course she did. You can’t expect to try something new and be successful without help, right?
GRANT: Ok, dad, good point. I know how much you like “Dim and Dumb”? I think it’s one of your favorites, right?
MAK: Grrrrraaannntt, it’s DIM SUM.
DAD: I know it’s a weird name. But, Dim Dumb, really?
GRANT: Sorry, I couldn’t remember. Where the heck did the name “Dim Sum” come from? I know it’s chinese, but do you know the history?
MAK: Yum CHA! That sounds great. THat’s probably where Har Gow came from. Shrimp dim sum rocks.
GRANT: Dad, those puffy things with barbeque pork are delicious and fun to hold and throw!
DAD: A-GREE. The teahouse was set up for one cup of tea and two pieces. Dim Sum, literally means “touch heart”, which was the small food that went along with the tea.
MAK: The way you L-O-V-E dim sum, I can see how you touch your heart after eating it.
GRANT: Yeah dad, sounds like the perfect food for you. Maybe your last name should have been “Dim”.
DAD: Oh, thank you… I think. I really do love dim sum. So, what’s up?
GRANT: Mak and I were talking about how looks can be deceiving. You know. People who look Rich aren’t…
MAK: And vice versa. That whole “can’t judge a book by it’s cover” thing.
DAD: Nice one. If you learn that things aren’t always the way they seem, you’ve learnt a big lesson in life.
GRANT: You know me, I’m the super smart one.
DAD: Ok, I know you’re both smart. A lot of people who are wealthy don’t have “flashy” items, like a really nice car, really nice clothes or a really nice watch.
GRANT: Wasn’t that Steve Jobs guy from Apple loaded, and he always wore black pants and a black turtleneck? That’s not flashy at all.
DAD: Now you’re getting it. There’s a great book about money that brings the point HOME.
MAK: Sounds like that was a clue.
DAD: It was. The book is called the Millionaire Next Door.
GRANT: Does it talk about how a millionaire could be living next door, and you wouldn’t ever know based on the way they live?
MAK: Grant, that was awesome. Really clear and insightful!!
DAD: G-man, I couldn’t agree more. Any idea how many lessons it teaches you?
GRANT: How about 5?
MAK: What about 7?
DAD: It is 7! Funny, huh. Just like the Richest Man in Babylon. Want to hear something else funny? The first lesson is…
GRANT: Spend less than you earn.
DAD: You got it! In the book, they say “Live well below your means”, which means exactly that.
MAK: Dad, that’s super easy. We got that one. You have to make great decisions about spending less than you make.
GRANT: I’m curious. Wealthy people work on spending their money better, but how do they SPEND their time?
DAD: Great question, because they SPEND their time and energy more efficiently too, in order to help build their wealth.
MAK: Are you saying they spend more time planning, learning and investing their money?
DAD: Absolutely, those that save more and grow their wealth faster simply spend more time working on it. You know, budgets, saving and investing.
GRANT: It sounds like everything you want to be good at requires time, like my video game! Getting ironman will only take another 10 hours!
MAK: Bad habit Grant? LAZY? Sound familiar? Rich Dad Poor Dad!!
DAD: Here’s what’s surprising. You don’t have to put in a lot of time G. And, you’d still have lots of time to play your video games. You just have to do it!
GRANT: Thank goodness!!! I was getting a little scared I’d have to quit. Thanks for clearing that up!
DAD: Question? Do you know any kids at school who have the coolest clothes and best phone?
MAK: That’s easy. There’s always a couple. Why?
DAD: The Millionaire Next Door believes that it’s MUCH more important to be wealthy than look wealthy.
GRANT: Is that the old “Keep up with the Joneses?” thing.
DAD: Yep. People see their neighbor buy a new car, and they want a new car so they can look as successful as their neighbor. I’m not sure why, but I never really cared about that.
MAK: Yeah, isn’t it funny they say “Joneses”? If you kept up with us, you’d have to sell your new car and buy one that’s over 10 years old!!
GRANT: Yeah, and you’d have to go to Goodwill and buy your clothes.
DAD: Ouch, I resemble those remarks. That’s a family secret by the way!!
MAK: Dad, it sounds pretty obvious that you follow several of the lessons in this book.
DAD: I’m glad you say that, because idea #4 and #5 concern you. So, this is a good time to break it to you.
GRANT: Nice going Mak, you made dad mad, when talking about money. No inheritance for you!
DAD: Well G, the parents of those who follow the book don’t provide “economic outpatient care” and they’re children are “economically self-sufficient”, which means inheritance isn’t a given
MAK: So, when you say “economic”, I know that means money. Isn’t “outpatient” a word when you’re sick and a doctor helps you?
DAD: Yep. So, the parents in the book won’t help their kids with money. These parents believed they taught the lessons they needed to know. So, no help if they don’t make HEALTHY money decisions.
GRANT: Sounds like “tough love”. Time to learn to stand on your own two feet, right?
DAD: You got it. You have to be able to take care of yourself. That’s “self-sufficient”. In this case, it’s about money. You’re on your own. Did you know my mom told me to never expect any money from her.
MAK: Why’d she say that? That sounds kind of mean.
DAD: Believe it or not, parents need money too. With 6 kids, she wasn’t going to be able to support us when we got older.
GRANT: Ok, that does make sense. So, the millionaires in the book raise their kids to make solid money decisions, aren’t financially supported and can take care of themselves.
DAD: Yep, that’s lesson #4 and 5. Ready for the next one? We’ve had an entire season on it. You have to become good at “targeting investing opportunities”.
MAK: Was that when we spoke about what Corona did to the market. You had to think through what was likely to happen?
GRANT: And, who it affects, to determine who will win and who will lose?
DAD: Yep, that big drop in the market was clearly an opportunity we should have been ready for, and seen the potential upside.
MAK: So, if you’re spending time understanding the market, when the opportunity comes, you’re ready to take advantage of it.
DAD: You got that right.
GRANT: I think we understand that one, and we’ll continue to build our skills as we get more experience, right?
DAD: Yep. Here’s a question. Is it easier to save more money if your job pays more?
MAK: That’s a no brainer. Sure it is.
DAD: So, the 7th lesson is to choose the right occupation.
GRANT: Sounds like Grandma Jones had this one right too! She only let you be one of 5 things, because she knew you’d always have a job, and could support yourselves.
MAK: Sounds like she wanted you “off her payroll”, dad.
DAD: Couldn’t have said it better myself Mak. I could’ve been a 1) Doctor 2) Lawyer 3) Engineer 4) Accountant or 5) Nurse. All could get a credential and all were good jobs at the time.
GRANT: Now, technology is huge, and I bet your mom would’ve let you do that.
DAD: True. Things have changed. And, there are other professions too. Her point was you have to be able to support yourself, and when I went to school, I didn’t know what I wanted.
MAK: Understand. It sounds like we’re done. We covered all 7. Grant, did you hear that..7. Who guessed the correct number of lessons?
GRANT: You did. I’ve got a lesson for you.
DAD: Ok everybody. Big breath. We’ve made it through all the lessons. So, it’s time to say goodbye. So long…
DAD: Good night.
MAK/GRANT: See you next week. Bye!!
Ben’s 2 Cents
The Millionaire Next Door is a great book with over 20 years of research in it. Becoming wealthy doesn’t have to be cool. For those in the book, it was simply a number of the right decisions, over time. When speaking about this book, I think of my childhood friend and his parents.
They weren’t flashy. They were great people, who were kind and worked a regular job. They also worked a second job on the weekends and nights. They mentioned the Millionaire Next Door to me once, and how they lived their life based on its concepts. 15 years later, they moved into this great new house, retired early, started traveling and really looked like they were having fun.
To this day, I think they are the perfect example of the millionaire next door. They didn’t seem wealthy by ANY standard, but they planned and worked, and simply made their move when the time was right. All because they lived below their means and did the right things to be financially independent. And, they were able to realize their dream of living in Florida, and driving a couple of used BMWs because they couldn’t bring themselves to buy new ones.
It does take time and energy. And not everyone wants to put the time in. You can always pay someone to do the work for you. But, follow their advice. Question: If you knew with certainty that IF you did what you were told, and that you would be wealthy in 10 years, would you do it? If you said “Absolutely yes”, then you’re ready. Because it works.
I’ll leave you with a couple numbers to think about concerning the Millionaires in this book
● 75% never pay more than $199 for a pair of shoes, and 1/2 pay less than $140
● And, as for flashy watches, 50% pay less than $235
Living below your means is important. Flashy isn’t in the calculation for the Millionaire next door. And, of course I don’t always follow every lesson. It’s important to make them a habit to be successful.
Thanks for being here. We’ll see you next time for more Money with Mak & G. Don’t forget to like, comment and rate the podcast!! See you next week. BYE!