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Aaron Olson

Mr. Howell

April 11, 2017

Personal Finance

The Millionaire Next Door

The concept of Big Hat, No Cattle is basically saying that you dont need to look the

part or act the part of a millionaire to be a millionaire. The man that said this idea to the people

taking the survey for the book looked about 35, lived in Texas, drove a ten-year-old truck, and

work jeans and a buckskin shirt which threw off his British partners because they were probably

looking for a man dressed in fancy clothing. The Go to Hell Fund states that the way they live

so well is they save up enough of their own wealth so that they dont have to work and they can

survive for about 10-12 years maybe even longer. Simply saying, saving up your money can help

you survive for a long time in the future if you are ever laid off or decide not to work anymore

for a while.

Mr. Richards (the PWA) has five times the net worth of Mr. Ford (the UAW) because of a

few reasons. One reason is Mr. Ford, being an attorney and living like a millionaire, spending

more money than he has to, to maintain the illusion of being a millionaire. Compared to Mr.

Richards who lives the same class level but choses to live in a normal home and not spending as

much money on such extravagant things just to have the appearance of being wealthy. Mr.

Richards being five times as wealthy as Mr. Ford doesnt mean he likes to show off his money

and flash it around he would much rather prefer to work at his mobile-home dealership job and

keep a low profile around people he knows.

Most people will never become wealthy in one generation if they are married to people

who are not frugal. They may not be able to accumulate enough wealth in order to keep a good

amount of money so that they may be able to survive and still make money while surviving.

When Mr. Johnny Lucas wife was given $8 million in stock, rather than going out and selling it

or trying to do stuff with it she just continued to do as she did, clipping 25 and 50 cent coupons

off the newspaper like she usually would. The reason someone who is a millionaire would need

to budget, is because if they dont then they could easily squander their money with in mere

months or years and not have a penny to their name.

In the example of Theodore Teddy J. Friend, it says that he is possessed by possessions,

it says that he works in order to things. He works hard in order to make money so that he can buy

stuff that otherwise he may not need but he gets them so he can try and impress other people

around him. In essence, he works, he earns, and he sacrifices to impress others.

One of the Small Changes Mr. Friends parents could have made was investing is stuff

that they frequently purchased such as Tobacco companies. Even though they would be putting

money they would like to spend right away, or even before they have it, they would be making

more money back in the long run. They were constantly spending money they had earned and

even stuff like the income check from taxes they basically spent before they even received it. If

they had taken time to at least invest in somethings they would have been a part of the PAWs

and not the UAWs that they have been their whole lives.

I believe the reason the book describes Mr. Rodney as having Sold his financial

Independence is because he was putting all his income into things in his life suck as his $4,200

monthly mortgage payment, two leased vehicles, tuition bills, club dues, a vacation home that

needed to be fixed up, and taxes. He wasnt thinking about his future when he may be able to
retire and have money to use then for everything that he worked to get. Instead he decided not to

participate in his companys stock purchase plan because he was putting all his money into

things he didnt need until he was older and had more money than he does now.

Regarding the statement about how The more dollars adult children receive, the fewer

they accumulate is saying that when an independent adult is making money, and their parents

are giving them money as well, they are most likely not going to earn more money at their job.

Its a basic concept that if your helping someone out financially all their lives, and even if they

have a job theirs a good chance that they will not be making much money at their job because

they know they would be getting money from the other person as well.

The most likely outcome of Mary and Lamar when her mother passes away is that they, if

they receive an inheritance, will continue to do as they do now. Buy a new model car every 3

years, spend their large lump sum of money they receive slowly, yet still rather quickly, and in a

matter of years will be in financial need of help. They do not seem to understand the concept of

budgeting for very large and expensive items such as vacation, education, luxuries, etc. Instead

they choose to take Lamars $60,000 salary as a college administrator and use that to buy

necessities and spend any money they get via EOC on things that they dont need to buy in such

a frequent manner.

The result of Mrs. BPFs parents creating the ideal environment for their daughter was

that she now lives at home with her parents, she is in her late 30s, her business gained $50,000

and parents are still giving her $60,000 each year to help her out. They still feel that she will be

able to become financially independent one day and yet she doesnt show any signs of going out

of her way to do so. Her parents have created an environment where she is able to leach off of
them for money and housing for free without any risk of losing her own money in some shape or


The primary message derived from Lauras story is that when you are given a bad thing

in your life, you may also be able to turn that back thing into something great and wonderful.

Lauras husband left her high and dry and rather than going to her parents for financial help or

going back to working at a high school she went into working real estate making more money

than she had before and could learn to be more frugal with her money. Riding early birds and red

eye flights not having to spend so much money on things like expensive flights and such made it

easier on her. She was able to save money, and still live a life with a large amount of money in

her back pocket all thanks to her husband leaving her.

The consequences to Beth and her Husband receiving EOC from her wealthy parents is

that they both have basically been letting her parents use and abuse them both. They help pay for

their home, where they live only a few miles away, most of the time the mother is at Beths

home, invited or not and makes most of the decisions on the house rather than Beth. Beths

husband was called a Bozo by his father-in-law in front of Ann and her husband. All in all, the

two of them have basically become adult children for the family to watch after and use for their

enjoyment. Keeping their daughter and he husband close by so that they can have someone to

talk to and enjoy company with whenever they want.

The concept of Weakening the Weak is one that is obvious, when you have a child that

is doing poorly in something than you will encourage more weakness rather than work on trying

to improve on it. Some of the examples the book states is that a mother requested her daughter be

moved to the back of the class because she is too shy to ask questions and such, the teacher did

not move her so her mother had her transferred to a different school entirely because her
daughter couldnt be prompted to ask questions on her own. Weakening the weak is a concept

where you feed off the weakness and give it more strength in being weak rather than trying to

build on it and make it become stronger and better.

I believe that the most important rule of Rules for affluent parents & Productive

children would have to be for me is number 2: No matter how wealthy you are, teach your

children discipline and frugality. The reason I chose this one is because I also need to learn to be

more discipline with my money and more frugal as well. I am a student in college and yet I still

act like a child at times when I have money. I am still learning to try and save my money and not

spend it as much or trying to put it in a savings account so it can grow much larger for when I

need it later in my life.

The reason Mr. W had decided to leave the condominiums was mostly his dog, but at the

very end of the passage he gives us a real reason stating that A hostile environment, even in an

atmosphere of beautiful people, is not a good place for dogs or for prodigious accumulators of

wealth. He says it isnt a good place for his dog, but the point he is saying is that being in a

hostile environment no matter how great it is, isnt a good place for wealthy investors and people

that are making good money should be in. He decides to sell hundreds of thousands of dollars on

condominiums just to keep his dog, and to keep wealthy business people away from hostile


Two concepts I found useful were the concepts of being very frugal, and trying to keep

from being sucked into a EOC type environment. The reason I feel that being frugal is a good

concept is because it will teach not just me but everyone a good way to saving money is being

somewhat cheap with things. You dont need to buy the most expensive things from a store just

so you can feel wealthy or even look wealthy around other people. Sometimes buying the
cheaper version of something or buying something in a longer span of time could be beneficial

because you can easily save a lot of money in the long run.

The other concept of being in an EOC (Economic Outpatient Care) environment to me is

something that I could never see myself being in, because I want to be independent when I am

older. I want to be a person that can make my own financial decisions and do things on my own

so that I dont need people to help me come up with money that I may need but get it as a hand

out. I would much rather be the person that works harder to make the money I need than get

stuck in a spot where I am getting money and not working for it.

A specific example I will use in my financial wellbeing in my life would have to be I

want to be more frugal. At the moment, I see money as something that I want to spend on

somewhat expensive stuff rather than consider going for the cheaper versions of things. I will

start to consider what I really need to spend my money on currently and consider what saving my

money could do for me in the future, helping me with putting money into savings accounts so

that I can be more well off in the future.

Reflective Writing

The way this assignment was able to tie into SLCCs learning outcome was in the

fallowing ways: develop knowledge and skills to civically engaged and develop computer and

information literacy. The reason I choose these two learning outcomes is simple, develop

computer and information literacy skills is because I was having to look through the book and
remember things that I highlighted and can type them out without having relook at everything

multiple times.

The reason I choose develop knowledge and skills to civically engaged is because using

the information that I learned about in this book will be able to help me in my own life. I found

that being frugal with things can help me save money and can keep me financially stable

somewhat. The other information I found in this book will help me with keeping myself

financially independent so that way I do not need to rely on other people for money or to keep

myself financially stable if I ever come into a time where I have no job and I am on my own.