The Millionaire Mind

I have just started reading the book The Millionaire Mind by Thomas J. Stanley as mentioned by Dave Ramsey in a recent podcast.

Stanley (a professor and researcher) studied the habits and behaviors of millionaires. He explains the decisions millionaires make and how those decisions lead to building wealth. He asks millionaires to explain and describe their own thought process.

I wanted to share two interesting comments made in the first few pages. The first goes along with my current desire to turn away from consumerism and toward more contentment.

All were first-generation wealthy. Some were credit-dependent earlier in their careers, but they eventually saw the light. They went cold turkey, breaking the cycle of borrowing to consume, earning to consume, and borrowing more and more money. Others never became addicted to credit or the need to display their success.

The second point was sobering:

There were many important points made about how one can become an economic success, but one statement was riveting. It was made by Gene. He mentioned that those who are "credit-dependent" are in fact controlled by someone else, some institution.

Gene was in his late forties at the time. He listed his occupation as "owner of a salvage business." He purchased or "salvaged" real estate from various financial institutions. These institutions "have loans that are in default...six months or more."

Just a few weeks prior to the interview, Gene "salvaged" sixty-eight homes, a commercial shopping center, and five multifamily apartment complexes from a financial institution with which he'd had many previous dealings. Immediately after the deal was signed, the senior credit officer of the institution signaled to Gene and walked with him over to the large window in the officer's top-floor office. It was a tall building - they could see for miles and miles. There were thousands upon thousands of commercial buildings all around. Gene could even see some of the residential neighborhoods on the horizon.

As he looked out the window, the officer pointed to all the buildings, homes, offices, garages, shops, and so on, and said the words that made a lasting impression on Gene:

We [the lenders] own it all...all of it. The business out there? ... You [borrowers] just run these businesses for us. You guys run them for us, the financial institutions.

How many people today in America run "their businesses," "their professional practices" but actually work for or are being controlled by lenders? How many live in luxury homes yet work hard to make payements to the ultimate owner of the mortgage? How many people take care of autos they lease from the real owner? Too many. But Gene is not among them, nor were any of the other members of his focus group. All possessed the millionaire mind. None had a private credit officer doling out cash. All lived in fine homes, but not one had a "jumbo mortgage".