This is a follow up to the post Most Common Myths about Everyday Millionaires which featured information from the book Everyday Millionaires.
The book conducted a survey of 10k millionaires, discovering their demographics, lifestyles, beliefs, and so forth.
Today we’ll get into the book’s second part and the real meat it has to offer.
This section begins with the author (Chris Hogan) listing the five attributes of millionaires.
They are as follows:
- Millionaires take personal responsibility.
- Millionaires practice intentionality.
- Millionaires are goal-oriented.
- Millionaires are hard workers.
- Millionaires are consistent.
Don’t worry if some of these statements don’t make sense to you yet. This post and a follow-up one will get into what each of these mean as well as my thoughts on them.
Millionaires Take Personal Responsibility
Let’s begin by reviewing what “millionaires take personal responsibility” means according to the book.
This section begins by Chris recounting the sorry state of the average American’s finances (which I think we all are well aware of), and then he says this:
Wherever you are, it’s because you allowed it. Whatever you’ve accomplished, it’s because you did it. Whatever you failed at, it’s because you messed it up.
Some things — most things, in fact — are your fault. Your ups and downs, your wins and losses. They’re on you.
He talks about how many people don’t believe this and simply want to cast blame for their failed efforts on others.
In other words, they don’t take personal responsibility.
Chris then contrasts this attitude with how millionaires respond:
I know there really are obstacles out there, but I also know millionaire-minded people don’t let those obstacles get in their way. Instead, they find a way around — or, better yet, through — whatever gets in between them and their goals.
Focused, driven, and responsible people find a way to get the job done, and that starts with taking personal responsibility for solving the problem themselves.
Preach it, brother!
He goes on, but I’ll leave that for when you read the book. Besides, I think you get the idea.
I have to agree that there’s a general lack of personal responsibility when it comes to personal finances (it’s not just finance IMO, but that’s our focus here.)
People come up with all sorts of excuses for why they can’t earn, why they can’t save, and why they can’t invest.
They want the results (to become wealthy) but they don’t want to take the appropriate steps.
By contrast, millionaires take the responsibility for wealth-building on themselves and then take action to make it happen. This is one key reason they are successful.
How Personal Responsibility Plays Out
In addition to having a general personal responsibility for their results, millionaires also take specific steps (and avoid others) to become wealthy.
The book lists these as follows:
- Millionaires own their mistakes and change course when needed. 95% of millionaires are willing to quickly admit when they are wrong.
- Millionaires take advice from others. 98% say they actively integrate feedback from other people.
- Millionaires use financial planner. 68% have used one.
- Millionaires don’t think negatively. 82% describe themselves as optimists.
- Millionaires don’t let the unknown scare them off. 94% are willing to try difficult things to get new results.
My thoughts on these:
- 95% are willing to “quickly admit when they are wrong”? Wow. Is this real or is this the difference (often common in surveys) between what people say about themselves and how they actually act? If it’s true, I’m in the minority 5% for sure. I might admit I’m wrong, but it’s hardly ever “quick”. 🙂
- I’ve been blogging since 2005 on various sites. One of the biggest benefits to me has been the advice I’ve received from other bloggers and readers. When you write about and discuss a topic it also forces you to decide what you really believe, consider other options, and then take action. I’ve probably made way more money off comments, debates, and working out my own beliefs than I have from my sites generating revenue themselves.
- So…I know that Dave Ramsey has a network of advisors he recommends (in case you don’t know, the author works for Dave). I’m wondering if the advisor point is them trying to reinforce that working with advisors is good. Plus there’s a difference between “have used” a planner and “currently use” a planner. As you know, I’m not a big fan of financial planners, but I’m willing to be wrong (though I won’t be quick to admit it). Haha!
- I think a can-do attitude is a key part of personal responsibility. You might have challenges, but you think/know you can overcome them, take action, and good things happen. By contrast, pessimists assume the worst and “know” whatever they do won’t work. They are defeated even before they try. I would say I’m a bit more optimistic than pessimistic but if I had to classify myself it would be as a realist (which is unusual for someone who used to work in marketing).
- One of the most difficult things I did was to get involved in rental real estate. It was a HUGE leap of faith for me. Thankfully I found the right person to help me, timing was right, and it all worked out for the best. So I can see how trying new things (even getting up the nerve to retire early) can give millionaires a huge advantage.
Overall, I think the point here is that millionaires take matters in their own hands and act accordingly. They don’t wait around for someone else to do it nor do they spend their lives doing nothing and then blaming others for the fact they are not wealthy (which is quite common in America today based on the comments I get every time a post hits the mainstream media.)
Millionaires Practice Intentionality
Moving to the second key attribute, let’s talk about the book’s finding that “millionaires practice intentionality.”
Here’s how the book describes being intentional:
You see, nobody accidently ends up retiring with millions in the bank, just like no football team accidently wins the Super Bowl. These victories come from a ton of hard work and thousands of daily decisions.
I like to describe intentionality in terms of deciding versus sliding. When you decide to do something, you’re in control. You’re making a conscious choice about what you want to do, and you’re taking the time to measure the pros and cons. You may not get it right every time, but you’re being intentional about what you do with your life. You’re [making things happen] instead of letting things happen to you. Instead of drifting through life, you’re hopping in the driver’s seat with your GPS locked on your destination.
Compare that to what I call sliding. When you slide into a decision, you’re being a passive passenger in your own life. You’re just going with the flow, drifting wherever the current takes you. You aren’t in control of anything, and you have no idea where you will end up.
The millionaires we studied weren’t surprised by where they ended up. They arrived at the destinations they had worked toward their whole lives. And they did it one decision at a time.
Wow. This guy is dropping truth-bombs all over this book!
A few things I want to chime in on:
- Many people simply do not want to be intentional and don’t want to do what’s required to get the results they want. They are hoping to slide into wealth but things do NOT work that way. And when they don’t, the excuses start to come out.
- I have said this often: Small gains over a long period of time add up to big things. It works!
- Ugh. The go-with-the-flow people kill me! I use this phrase a lot related to growing a career. People who go-with-the-flow get go-with-the-flow raises (which aren’t great). If you want more, you have to take action and do more. The good news is that even a small effort can add up to millions more in earnings. Is it an accident that the first thing I say in my seven steps to grow your career is “You Must Be Proactive”? No, it’s not!
I could probably go on and on in this line of thinking, but let’s move to the book’s list of the various ways millionaires are intentional.
Here are some of their findings:
- Millionaires live on less than they make. 94% do compared to 55% of the general population.
- Millionaires plan ahead and pay cash. 95% save up for big expenses compared to 67% of the general population.
- Millionaires use coupons. 93% do.
- Millionaires use shopping lists and stick to them. 85% use a list when shopping for groceries.
- Millionaires drive older cars with no car payments. The average millionaire drives a four-year-old car with 41,000 miles on it and 82% have no car payments.
- Millionaires don’t go out to eat every night. They spend $200 or less per month on restaurants.
- Millionaires don’t try to impress anyone. Only 7% feel pressure to keep up with friends and family spending.
- Millionaires don’t pay their bills late. 96% have never had a past-due bill.
- Millionaires don’t have credit card debt. 73% have never carried a credit card balance in their lives.
- Can’t we just summarize all these by saying “millionaires cover the basics of money management to become wealthy”? Really, these are all good practices and it’s no surprise millionaires do them.
- What is surprising is that 55% of the general population lives on less than it makes. LOL!
- We pay cash, use coupons and lists, and drive older cars. My car is seven years old and has 140k miles on it. I love it (Toyota Highlander) and plan to drive it until it can’t go any longer.
- We spend about $170 a month on eating out and I feel like we could do better. But we’re not really counting our pennies at this stage.
- Haha! Millionaires say that the Joneses can keep up with themselves!!! I’ve never felt any pressure to keep up with family and friends. A part of this is that most of my family and friends are far less wealthy than we are, so there’s never been a temptation (or at least one I can remember).
- It must have KILLED the people at Dave Ramsey headquarters to put out a book that says “millionaires don’t have credit card debt” instead of “millionaires don’t have credit cards.” The truth is that using credit cards in a strategic way can earn you some good side money (I’m over $20k since 2006). This is why I have a list of the best credit cards at any time on this site.
If you want the rest of the story, see part 2 of this series where I detail the last three attributes and wrap up my coverage of the book.
I do love the concept of intentionality versus sliding. Sure some people slide into money (lottery winners, etc) but because of how that money is obtained, there are many cases of these people quickly losing it all as they never learned the concept of earning the money in the first place and fritter it away.
Being a multimillionaire I still shop for bargains and use coupons. It is wild that people think that just because you are wealthy you don’t take time to save money anymore. How do you think we got there in the first place? Old habits are hard to break.
This was a huge contention point with my ex-wife. She never wanted to use coupons and felt it was “beneath her” and embarrassed to hand them over to the cashier. Not me. I don’t let pride get in the way if it puts more money in my hands.
Bernd Doss says
Many of the attributes that are mentioned herein are practiced by more than just millionaires. I have used many of these guides throughout my life and , although not a millionaire, I am quite content with my lot. Knowing when enough is enough can be just as satisfying as crossing the threshold of being called a millionaire. Wealth can be measured in many ways. Thanks ESI for your work. Enjoy reading your thoughts.
Good point. It really should be “millionaires or people on the way to being millionaires” 😉
I’m making a guess that if you’re reading this, you’re following the practice of a future millionaire.
I do wonder about these types of books if they are sometimes confusing correlation with causation. Yes, many millionaires may have these characteristics, but perhaps having these characteristics does not necessarily mean you will become a millionaire.
That said, I really like the comment on intentionality. That one is for sure, seems like a prerequisite to self-made wealth.
Jason MI#1 says
yes, this exactly. also a significant lack of understanding of statistics…
If the focus of the book is providing a path to being a millionaire, the purpose isn’t served well by highlighting that there aren’t any guarantees following that path.
I recognize that there may be a lack of understanding of statistics but I’d posit that it’s more likely the author is being a good salesperson.
Mr. r2e says
When I read “95% quickly admit to mistakes,” I said out loud “I wonder how they define quickly.” I for one admit to mistakes but not so sure I am quick on the ball to recognize it, let alone admit it!
Based on reviews of the book on various blogger site – I think I am going to be thrifty and not buy the book. It honestly appears that the book is just rehashing what is already free on all the financial blogs!
“Millions spend quite a bit less than they earn, and save the rest.” Easy peezy lemon squeezy! 🙂
MM Interview 55 says
Intentional vs. “sliding”!!!…..SO TRUE!
My wife and I talk about this concept all the time. We attribute the success we’ve achieved to being intentional and how many of our relatives are the exact opposite. They can’t figure out why their lives (by their reckoning) haven’t worked out so well.
They just float along with an inability to make a decision or create a plan… no matter how many times we’ve made offers to “cast them a line” and get out of the flow.
They refer to us as lucky… I would say we made most of our own “luck” by making hard decisions, some right, some wrong, but in the end those decisions were ours and we have no one to blame or reward, but ourselves. And we wouldn’t have it any other way!
“I might admit I’m wrong, but it’s hardly ever “quick”.” I think you’re right and the statement from the book is a bit optimistic.
I consider myself fairly self-reflective but I’d be lying if I said I easily assumed I’m wrong. Once I get there, I have no problem owning it, though.
Thanks for this – I’m enjoying your series of response/thoughts to the book.
I think the practice of being intentional versus just sliding or “going with the flow” is probably one of the most pointed things I’ve read in this review of the book. I think that when you are deliberate about most things that you do, you do tend to notice a lot of “sliding” by other people around you. People act as if they are never going to age, they are always going to have a good job, they’ll always be healthy, nothing bad will ever happen them. Why waste time in the today and now planning for something they don’t believe will happen to them? They sometimes justify it even though they know better by saying to themselves, what’s the point, I can’t afford to anyway. And its mostly down to the fact they don’t believe its important enough to really, really think about it. The path of least resistance is to just brush it off. “It will never happen to me”.
Think about what financial planning means? I know everyone here already knows but for the purposes of this comment, it is a deliberate set of steps taken in preparation for a given scenario coming to pass or not as the case may be. These plans can be small and large. From having cash on hand in the event there’s a power outage or an emergency of some sort to having eff you money to having an emergency fund to savings to retirement. All of these things require deliberation which in and of itself if you have it probably also makes it likely you will follow through on executing all of these plans. Deliberation can be boring but it increases the likelihood of preparedness.
So perhaps I’d call it instead Deliberation in the cause of Preparedness.
As for being wrong, open to being wrong and sometimes quick to admit it because its much easier if you recognize it quickly. Just don’t be in love with your opinions and avoid ideologies. Ideologies make you dumber. So I’d say that sometimes I’m in the 5% and sometimes I’m in the 95%. I think the larger point of being open to being wrong is more important than how quickly you admit.
Commenting on the financial planner debate. Given the millionaire profile above, self-directed, frugal folks probably feel they already have a good grip on their money management and direction so don’t feel they need a financial planner. More recently, I’ve been taking advantage of “free” planning services (I’m certainly not going to pay AUM fees) and have found intelligent eyes can help tweak you plan in valuable ways. Some examples of what I got include why you may want to set up a living trust (especially in CA, which I shared with my mom who subsequently acted based on this insight), investment tools (mostly free proprietary tools offered to clients) that can improve your investment strategies, insurance considerations and coverage levels, tax optimization strategies, a second opinion on portfolio balance and possible new asset classes to consider. I have strong opinions on how to manage my finances but would be foolish not to get input on my plan from experts who work with many in similar situations. The best of plans should be battle tested and open to criticism. The trick is to find this input/insights for free … and this blog site is one of them 🙂
Okay I was liking your list until you said millionaires don’t go out to eat every night. I would change that in my case to millionaires never used to go out and eat every night, but I think I am turning into my parents now I look at my grocery bill which is becoming much smaller than my restaurant bill. Maybe it’s because no more kids, and getting older. Now I look at the days of the week.
Monday – trying to get in the groove of things, must take it easy – go out and eat
Tuesday – Preparing for hump day – go out and eat
Wednesday- Celebrate hump day – go out and eat
Thursday – week winding down – must get ready for weekend – go out and eat
Friday – well week is over no reason to cook – go out and eat
Saturday / Sunday – No one cooks on the weekend
As you can see, I just don’t have any time to cook anymore.
LOL, I don’t know where they are finding these millionaires that don’t go out to eat…
We are retired and eating out is social for us, but now we can eat lunch out leisurely vs more expensive dinner. We had lunch with a previous co worker today and he had to watch his time closely so he could go back to work while we were able to sit and have another soft drink as we slowly finished the meal. Eating out is fun and can be done wisely (coupons, specials or bringing home leftovers). YUM
Frogdancer Jones says
Your last dot point made me laugh!
Although I’m a fan of Chris Hogan (love his enthusiasm and passion for what he does, and also enjoy his podcasts), I was rather disappointed in this recent book. To me, it seemed overly full of cliches and “obvious” conclusions. I get much more “meat” from reading ESI millionaire interviews!
As far as books on millionaires, I much preferred Tom Stanley’s The Millionaire Next Door (perhaps I’m more of a data-driven person).
Semantics aside, one point not-so-often argued is that you can (also) be wealthy, or feel that way, without actually being rich. I have an abundance of possessions, collected over many decades at certain flush intervals, at least half of which can quickly be converted to cold hard cash in a pinch . . . barring that, I consider them extremely good company. I currently make about 40k, full medical, premiums paid and so on, for working 30-32 hours a week. Perhaps modest to other hot killers (go-getters), but I also make more money than other co-workers three ‘paper’ grades above me. I’ve been offered a promotion at least four times; I always say no. Whenever I feel like a pay cut, more responsibility, longer hours, a dry cleaning bill in a town without one, all to impress others, and not myself, then I might finally consider it. So not only bigger bank than my peers (dysfunctional mgmt IS a problem there), but also a LOT more time. No fifty-plus work weeks for me. No kids, no daycare, no car payment, ever. A mortgage, easily within budget, plenty left over for investing. No apartment or house-sharing issues anymore, just a lot more time, and for more money. Should this job disappear next week, or next year, well, I do have that B.A. from the University of Washington. A few months later, one dinky certificate, and BAM, I’m a teacher the rest of my life, or a financial planner. Both sound like more hours, a lot more responsibility, so no special rush. Strictly working smarter, not harder. I could get to rich one day, or feel it, WITHOUT being a millionaire. Until then, I do feel reasonably wealthy, all things considered.
Also, more sexy than a pay raise, or even a bonus, both of which I get every year, is eradicating a line item expense in the budget, then shifting it to saving and investing. Major wood there . . . cheap thrills, baby, with long-term impact. And unlike some, I LOVE budgeting, down to the last penny. Knowledge is power, straight up; lying to myself, little phantom expenses on credit cards, ‘maintaining’ balances and so on is such a yesterday thing, hopefully never seen again, anywhere.
I’m just curious – how much do you spend per month roughly? I’m curious because I might be in a similar boat, and want up my % invested. I also agree with you re promotions – for me it’s been more important to learn more and I usually go down that road.
Spending varies a little, paychecks too, but I recently calculated living costs at $900 a month. That’s as low as it goes, purposely leaving out any margin for saving, investing, or cable, because a job loss would bring a quick halt to all three–until the next job. It covers everything else, though, like the mortgage, utilities, and food. Fortunately, every two weeks I generally receive a paycheck a few hundred over that, so a pretty healthy margin for growth, IF the job holds . . . I just don’t know. I have a few thousand set aside for emergencies, then a credit card, but to really sleep better, I’d like $21,600 set aside, basically cash budget protection (900 x 24), meanwhile covering significant emergencies or house costs. I’ll be working hard on that going forward.
Hi, thanks for your reply. If that includes your mortgage, I’m stunned. In Aussie capitals, a mortgage would cost min $1000 a month on its own. But I’m in a similar boat, looking to live frugally while still investing – and looking to improve future earnings.
One of those things; at the right time, an opportunity presented itself. Basically foreclosed homes left over from the Great Recession. We avoided short sales like the plague. Unfortunately, Californians and Texans and Seattle refugees snapped up the last of the great deals years ago, whether renting or buying–most thankfully, shortly after we did. Five years out, this sleepy coastal town has finally awakened, to its detriment if the Seattle ‘disease’ (soaring real estate, the homeless, etc.) comes with. We’ll see. Long story short, I was ready and we got lucky. Prices are insane, everywhere, once again.