Explain the following two concepts addressed in the Millionaire Next door:
● Big Hat, No Cattle
○ The term “Big Hat, No Cattle” means that an individual is showy in their
material possessions but has no wealth to show for it. This type of
individual lives in a way to impress others, but at the end of the day, they
have little to no actual wealth.
● Go to Hell Fund
○ The term “Go to Hell Fund” is a way of living frugally and saving often so
you don’t have to work for ten or more years.

2. In the examples of Mr. Richards (PAW) and Mr. Ford (UAW), both men are close in
age and yearly income. Explain why Mr. Richards has nearly five times the net worth of Mr.
In the example of Mr. Richards and Mr. Ford, Mr. Richards has five times the net worth
of Mr. Ford because he is more frugal and conscious of what he is spending his money on.
While Mr. Ford lives a very expensive lifestyle, spending money on expensive clothes, fancy
cars, and a large home, Mr. Richards lives more moderately. If Mr. Ford decided to life a less
elaborate lifestyle, he would soon have the same net worth as Mr. Richards.

3. UAWs live beyond their means. PAWS are builders of wealth. Describe someone you
know who is either a UAW or a PAW (or is headed in that direction) and what can be learned
from their example.
A friend of mine, we’ll call him Tim, has had a reliable job since our Sophomore year of
highschool. Working in an IT field, he makes around $12 an hour and is able to make his own
schedule around school and family obligations. Unsurprisingly, he works as many hours as
possible, averaging between 30 and 40 a week, alongside his normal high school classes.
While he does occasionally buy himself something nice, like something new for his truck, the
money he earns from this job goes into his college savings account. As of the last time we
discussed it, he had nearly $20,000 saved up for his college tuition/future home. This is
arguably more than what most families save up for their children’s college tuition. Tim has been
smart about his money since day one, and has found a balance between saving and spending
that works for him.

4. Provide short answers to the following three questions:
● Most people 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? ​She continued to live frugally by cutting coupons to
save money on groceries.
● Why would someone who is a millionaire need to budget? ​A millionaire would
need to budget in order to maintain and continue building their wealth; if
there was no budgeting, they wouldn’t be considered a millionaire for a
significant amount of time.
5. In the example of Theodore “Teddy” J. Friend and his parents, answer the following two
● The book describes Teddy as being “possessed by possessions.” Explain this
○ Teddy is the opposite of minimalist; rather than focusing on living with the
bare minimum, he focuses on obtaining items that will make him seem
more wealthy. Rather than tell people of his accomplishments, he wants
to show them off through material possessions.
● What was the “small change” Teddy’s parents could have made that would have
put them in the millionaire category?
○ Teddy’s parents would have been in the millionaire category if they had
stopped smoking. Tobacco is an addictive product that not only hurts your
health, but your wallet as well. Over time, this expense builds up
significantly, but oftentimes smokers won’t acknowledge the money they
are wasting on cigarettes because they see it as a necessity. For
example, my boyfriends mother is a freelance photographer who couldn’t
afford to live in her downtown Salt Lake apartment anymore. She also
smoked at least a pack a day, maybe more if she was stressed. If she
had had the extra money from her cigarette use, she probably would have
been able to continue living in her apartment.

6. Mr. Rodney is a high-income/low-net worth corporate manager. Explain why he is
described as having “sold his financial independence”.
Mr. Rodney is considered having “sold his financial independence” because he didn’t
take advantage of his jobs matching stock purchase plan that could have allowed him to obtain
6% of his income shares in the corporation. Having not done this and lost this opportunity, he is
uncertain about his future retirement.

7. If your goal is to become financially independent, what should your plan be?
If your goal is to become financially independent, you should have a plan that is
obtainable and adaptable. To save money, you shouldn’t dramatically change your financial
plans overnight; rather, starting with smaller, more attainable goals will allow you to begin
getting in the habits of saving as well as adapt your goals once they have been met. For
example, you could begin saving 5% of each pay period towards your retirement. As that
becomes easier, you could increase that 5% to 10%, then that 10% to 20%, etc. By doing this,
you’re not only accomplishing your goal of being financially independent, but also doing it in a
way that is personalized to you.

8. Why did Mr. W. W. Allan decline the gift of a Rolls-Royce?
Mr. Allan declined the gift of the Rolls-Royce because it didn’t fit the needs that he
wanted in a car. Being an outdoorsy person, Mr. Allan didn’t see a benefit in owning a
Rolls-Royce, even if it was a gift. By knowing his priorities in a car, Mr. Allan was able to decline
the gift as he knew that he would never use it.

9. Regarding Economic Outpatient Care (EOC), answer the following three questions:
● What is the likely financial outcome for Mary and Lamar once her mother passes
○ Once her mother passes away, Mary and Lamar’s financial outcome is
completely unknown. During her life, Mary and Lamar have extensively
relied on her mother for financial support and assistance. They have no
idea the amount of money Mary’s mother has left to them in her will; and
even then, with their consumption of material items, it would not take long
for them to use all of that money.
● The parents of Ms. BPF were determined to give their daughter every advantage.
After they created an ideal environment for her, what was the result?
○ Although Ms. BPF had the vision of an entrepreneur, she didn’t have the
resilience. While her parents continued to invest in her company, she
wasn’t making enough profits to make their investment worthwhile. If her
parent’s had stopped creating this ideal environment for her, she would
have had to go out on her own and adapt/change her product to meet her
consumer’s needs.
● In the case of Laura (A Woman of Great Courage), explain the primary message
derived from her story?
○ The primary message from Laura’s story is that ​if you put your mind to it,
you can do anything. ​As cliche as it sounds, Laura was able to earn more
money in the first month of her real estate career than she was in her best
year of teaching. By being determined, Laura was able to accomplish her
monetary goals and give her family the life that she wanted them to have.

10. Regarding Affirmative Action, Family style, answer the following two questions:
● In the example of sisters Ann and Beth, describe the consequences to Beth and
her husband from receiving EOC?
○ Although Ann was financially independent, Beth and her husband were
not because they received EOC. Because they were given extra
assistance, they were not completely independent, and therefore relied on
somebody else’s funds when they should have been handling them
● Explain the concept “Weakening the Weak”
○ The concept “Weakening the Weak” refers to parents giving their children
extended financial aid when they should be able to provide for
themselves. If a child was physically weak, the parent would not do
anything and everything for them; the parent cannot give the child
physical strength, that is something the child must develop on their own.
Likewise, a child must develop their own finances and financial
independent and not rely entirely on their parents.

11. Explain the root cause for the conflict between Mr. W and the residents of the
vacation condominiums.
Mr. W and his wife were not seen as wealthy or beautiful as the rest of the condominium
residents. As a result, the residents did not want Mr. W and his wife to continue living there, so
they used his dog as an excuse to make him leave.

12. Now that you have finished reading the Millionaire Next Door, answer the following
three questions in a minimum of three paragraphs.
● What are the two concepts you found most useful? Explain why.
● Give a specific example of one small change you can make to improve your
financial well being.
In reading this book, I found the UAW vs. PAW concept to be very useful and interesting.
Looking at my generation, more often than not I see people who are trying to flaunt and flash
their wealth when in reality they have none. By only living with what you need and actually want,
you become less engrossed in the consumerist society and actually benefit not just yourself, but
the planet. By consuming only what you need, you not only reduce the amount of waste you
produce, but also allow those resources to be given to others as well.
Another concept I found to be particularly useful was the Economic Outpatient Care, or
EOC. As a 17 year old college student who currently lives at home, this concept made me
reevaluate what my life is going to be like in the next two to five years. While I want to be
financially independent from my parents, I know that they will be there for me if I am unable to
make ends meet. However, I don’t want to rely on them for my entire life, so I think that some
cold turkey every now and then would be very useful and beneficial to me in the long run.
Being as young as I am, the smallest thing (but also the biggest) I can do for my future
finances is save. I know that there will be difficult times ahead of me, both financially, physically,
and emotionally, and I need to have my present self take care of my future self. I would much
rather have too much money in my savings account than not enough, and I think by saving a
small amount now while I am young is the best thing I can do to help my future finances.

Reflective Writing
Compose 2-3 paragraphs explaining how completing this assignment helped you
achieve at least two of the SLCC learning outcomes.
Through this assignment, I further improved my use of computer literacy as well as
effective communication. By creating and further adding to my eportfolio, I have learned about
design templates as well as what is the easiest way to create a website from a template.
Eventually, I would like to develop and design my own website for my ePortfolio, but for now I
will continue using the one I already have for the sake of organization.
In regards to communication, I have a tendency to ramble in my writing. Through this
assignment, I learned how to be thorough but still concise in my writing. Rather than using
roundabout examples, I learned to shorten or eliminate the examples I was using for each
question. In doing this, my writing became more effective and clear to the reader. I also learned
how to format questions and answers in a more clear way, allowing my reader to differentiate
between the question and answer more easily.