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1.

Explain the following four (4) concepts addressed in The Millionaire Next Door:
1. “Big Hat, No Cattle”- it refers to a person who acts like they have a lot of money by wearing fancy clothes or watches but they don’t actually have a lot of money saved.

2. “Go To Hell Fund”-someone has enough money or wealth saved up to be able to live without working for at least ten years or more. 3. “PAW”- Prodigious Accumulator of Wealth. Are people who save up money by not spending a lot of money, have budgets, and don’t buy a lot of expensive things like a big house or brand new car. 4. “UAW” Under Accumulator of Wealth. People who spend a lot of the money they earned, don’t have a budget, don’t invest that much. Have big homes, and brand new cars.

2. In the example of Theodore “Teddy” J. Friend: Provide three (3) reasons why Teddy is considered a UAW. What was the message Teddy’s parents sent him about consumer behavior?
Reason one- he spent most of the money he makes, so he didn’t have any money saved up. He is considered to be a “UAW”. Reason two- His thinking was wrong. He was waiting for others to save their money when he should of started saving money on his own. Reason three- He had a blue collar upbringing and wanted to show it in the form of expensive cars, big home, and fancy clothes. Parents Message-His parents were “UAW” they never saved. It was about what they bought. They didn’t budget at all, and never invested the money they had.

3. In the example of Mr. W.W. Allan, a self-made multimillionaire: He never extended credit to people who exhibited the “Big Hat, No Cattle” philosophy. Why? Why did he decline the gift of a Rolls-Royce? Philosophy- he would never give people money because he would never see it again. People like that tend to spend money on things they haven’t earned yet. Rolls-Royce- He didn’t take it because it wasn’t his life style. He liked to fish and you don’t take cars like that fishing. He also didn’t want it because he didn’t want his employees feeling awkward around him.

1. Define Economic Outpatient Care (EOC). A parent giving a lot of money to their children or grandchildren. So that the child doesn’t feel the like have to work, and then they become lazy. 2. Like the example of James, many EOC receivers (inaccurately) view themselves as __________. EOC receivers view themselves as wealthy when they aren’t. They have their parents money to spend and don’t have any money of their own.

3. As illustrated in the example of Henry & Josh, what is the fundamental rule regarding wealth building? Be specific. The fundamental rule is wealth building. Save the money you have and work hard for it. Don’t be lazy and wait around for someone to give it to you. 4. Why did Laura succeed? Laura succeeded because she wasn’t lazy worked hard for her money, and didn’t take any money from her parents.

5. Now that you have finished reading The Millionaire Next Door, give your thoughts What are the two (2) concepts you found most useful? How will you apply them into your life? In your own words, give your thoughts in a minimum of three (3) paragraphs. Reflective Writing
1.The concepts that were most useful for me was time and efficiency, and controlling. Time and efficiency are important because if you won’t to gain wealth you need to spend the time planning and executing the plan. To execute the plan efficiently you will want to invest money and set a budget. Controlling your money is great because when you make a plan the controlling part is executing what you set up in the planning part. UAW’s don’t control their money and PAW’s plan and control their money. 2.How I will put them into my life is by what I learned from this class. I have started to write down a budget so I know exactly where my money is going, and I have been executing this plan from the start of this month. I don’t have a family or a house to worry about right now, but I am learning how to control my money since I have started the budget and I have been doing a 401K plan since the start of this year. I am also actively searching to put some of my money in an investing plan. 3.My thoughts are that the book could of used more people examples to help convey the message the book was trying to tell. The examples that they used people were great. It had a lot of useful info about how to save your money quickly and effectively. I liked how they talked about looking like a millionaire and being a millionaire. The difference is how much money you have saved in the bank compared to how much thing you buy.

Another example is where your money is going. If someone makes a lot of money at their job and doesn’t see where it is going they are going to be losing a lot of money when they really didn’t need to. When it talked about car buying I was on the same page with the book that you should buy a new car because it depreciates really fast. Buying a used car might not be luxury, but it is the way if you want to have money down the road. Being fugal is one of the most important things to accumulating wealth. If you go out and buy big houses, expensive cars, and fancy clothing then you won’t have money to spend on the necessity. You need to save for a rainy day. It will help so that you don’t need to borrow from your family member let alone the pay loan centers.

Reflective Writing Compose 2-3 paragraphs explaining how reading The Millionaire Next Door helped you achieve at least 2 of the SLCC Learning Outcomes:

Acquire Substantive Knowledge
By reading this book it has allowed me to gain a lot of useful info in my life like starting a budget, don’t spend money on expensive cars or homes, and fancy clothing. It has taught me to work hard and plan to save money by putting it in the bank, investing money, and to save more money than you gain. I’m going to use this for the rest of my life. I have already started a budget, and am going to budget my money really soon.

Think Critically
This book has allowed me to think about how I am living write now. With the addition of this class I have already started a plan to save my money more effectively and have learned that you need to work. Even if I won’t be a millionaire I have used most of the concepts in the book in my own life so that I can start be a PAW instead of a AUW.