Questions - The Millionaire Next Door

After reading The Millionaire Next Door, answer the following ten (10) questions and compose
your Reflective Writing.
1. Explain the following two (2) concepts addressed in The Millionaire Next Door:
Big Hat, No Cattle - The Meaning to this is a person who presents themselves as having
great financial importance, but in reality does not have the financial means to justify their
lifestyle.
Go to Hell Fund- Having enough financial stability to live without working for ten or more
years.
2. In the examples of Mr. Richards (PAW) & Mr. Ford (UAW), both men are close in age &
yearly income. Explain why Mr. Richards has nearly five times the net worth of Mr. Ford.
(Be specific).
The reason why Mr. Richards was able to have almost five times the net worth of Mr. Ford was
because he practiced a PAW style of life. He was the type of person to build wealth by working
on his net worth and because he lived frugally and was wise with his investments, ended up
having that much wealth.

3. Provide short answers to the following three (3) questions:

Most people will never become wealthy in one generation if they are married to people
who are _Wasteful_.
Upon giving his wife $8 million of stock, from taking his company public, what did his
wife continue doing?
His wife Did not change her way of frugality. She kept cutting coupons and saving her income.
Why would someone who is a millionaire need to budget?
The reason why a millionaire would need to budget, is so they don't end up become wasteful. A
Lifestyle of just spending and consuming can eventually run you dry if you are not keeping track
of what amounts you have to spend. This helps with staying frugal. Spending less than what you
make. These people need to budget so they are able to invest and multiply their income every
year.
4. In the example of Theodore Teddy J. Friend and his parents, answer the following
two (2) questions:
The book describes Teddy as being possessed by possessions. Explain this comment.
What that comment means is that he is a hyper consumer that lives a lavish lifestyle. He only
works for possessions and does not build wealth.

What was the small change Teddys parents could have made that would put them in
the millionaire category? (Be specific.)
If only his parents would have invested their cigarette money they could have possibly been in
the millionaire category.
5. Mr. Rodney is a high-income/low-net worth corporate manager. Explain why he is
described as having sold his financial independence.
His employer offered Mr.Rodney a stock-buying plan that would have allowed him to buy stocks
and his employer would have matched it. Since Mr.Rodney had multiple houses, Leasing a car
and several other payments he was not able to purchase stocks. Therefore he sold his financial
independence and was stuck in a whirlpool of consumption.
6. Why did Mr. W.W. Allan decline the gift of a Rolls-Royce?
He declined the Car because it didn't suit his lifestyle. He thought that Having 2 cars and it
would be inefficient. Plus he wouldn't be able to take it fishing and he felt like it would have
intimidated his employees.
7. Regarding Economic Outpatient Care (EOC), answer the following four (4) questions:
Explain why Economic Outpatient Care (EOC) can be harmful.
EOC can be harmful because it causes your UAW children to rely on your subsides, to be able
to afford their lifestyles. Most of these people can't afford modest size housing. Also it may
cause children to fight over who gets the most money.
Explain this statement: The more dollars adult children receive, the fewer they
accumulate.
This statement is practically saying that the more money you hand over to your children the
more things they will acquire that they will not be able to afford.
What is the likely financial outcome for Mary & Lamar once her Mother passes away?
The outcome that they will face would be that they really won't know what their financial
outcome might look like. They have no clue as to how much Mary's mother had put into funds. It
looks like it wouldn't take them long to deplete a good amount of inheritance. The main reason
behind that is because they have to pay off all the stuff they still owe and on top they want to
buy a bigger place and travel.
As illustrated in the example of Henry & Josh, what is the fundamental rule regarding
wealth building? (Be specific.)
The fundamental rule is Whatever your income, always live lower than your means. be frugal
and don't buy things that you do not need, and don't spend extravagant amounts of money on
things you need.

8. Regarding Affirmative Action, Family Style, answer the following three (3) questions:
In the example of sisters Ann & Beth, describe the consequences to Beth & her husband
from receiving EOC?
Beth struggled with her parents. It seemed as they were controlling and always criticizing their
lives. Her mother would sometimes show up to the home unannounced since she help buy the
home. What didn't help is how close they lived together. They took advantage of the husband
during the time they lived together. Her Parents admittedly have told her that she cannot afford
to live without them.
Explain the concept weakening the weak.
Ignore an issue with your children or somebody else. Its not allowing them to seek for resources
to get help that is needed.
What did Kens father tell him often? (Be specific.)
I am not impressed with what people own. But I'm Impressed with what they achieve. I am
proud to be a physician. Always strive to be the best in your field. Don't chase money. If you are
the best in your field, money will find you.
9. Explain the root cause for the conflict between Mr. W & the residents of the vacation
condominiums. (HINT: Its not because of his dog.)
I consider the main reason why Mr.w and the condominium residents didnt get along was due to
that they did not find Mr. and Mrs. W to be beautiful people. They used the dogs as a scapegoat
to get rid of them. This can be supported by the fact that they didn't want the factory workers in
the area.
10. Now that you have finished reading The Millionaire Next Door, answer the following three
(3) questions in a minimum of three (3) paragraphs.
How has your perception of millionaires changed?
My perception on millionaires has changed quite drastically. All I ever thought was that they
were rich people who are stuck up and live in huge mansions and drive sport cars all over the
place. They are always dressed fancey. Now I can say that my mind has been cleared a little
more. Although what I described does apply to some millionaires, there is a large amount of
them that might just be living in my average neighborhood. Having all that money still means
you need to budget and keep track.
What are the two (2) concepts you found most useful?
Im 100% sure that the main concept taken from this book that has become the most helpful is
the idea of PAW and UAW. The reason behind this because I went from being a PAW to the
biggest UAW. Reading the definitions really made it stand out to me and now i will try to go back
to living more frugally and spend less than what I make. I think another important concept is to
no to rely on your parents too much. My parents have always been hard workers and I look up
to them and I thank them for not allowing me to become dependent of them.

Give a specific example of one small change you can make to improve your financial
wellbeing.
I think that the smallest change i could do is to stop spending money I do not have and start at
least saving 10% of all my paychecks, by investing them into stocks or dividend reinvestment
plans. Working on my net worth is my priority and trying to focus on the future instead of the
now is my new priority.
Reflection.
As I finished this assignment I took some time to see what 2 SLCC Learning outcomes I
have achieved. the first one would have to be the critical and creative thinking. The reason for
this is due to the fact that I am not a person to gladly accept to read a book like this. I read
through it and try tried to focus on it. In the end I was able to answer all the questions with
precision and creatively, I also think the fact that I was able to open my mind and think of
Millionaires differently helped with the critical thinking part of it.
The second thing this assignment help me with is developing quantitative literacies for
my chosen field of study. Though I'm not going into a major that involves this sort of education, it
is really go to know all the information that the assignment has given me. This will always come
in hand later on in life. Someday I hope my job will make me a millionaire but now I know that
once I get there I still need to manage my money.