Everyday Millionaire Myths

what do you think of when you hear the word millionaire do you think of lots of cash fancy cars private jets mansions being able to travel to exotic places having servants pampering yourself or maybe just spending more time with the people that you love today we're going to talk about what it's like to be an everyday millionaire [Music] hi folks paul price here with retire rich with real estate and today i wanted to talk to you a little bit about a book that i just read i just finished this book by chris hogan it's called everyday millionaires today i got my wife with me and we were just going to discuss a little bit of some of the topics that he goes over in this book i guess okay this is my wife heather and i don't know what that we were just want to talk a little bit about what we think about some of the the myths and some of the concepts that they have in here this book is almost uh a redo of an earlier book that that was done by thomas stanley and william danko back in the 90s this is a book that i read back years and years ago same type premise of the book basically talking about how people that might be living in your neighborhood you would never know are actually millionaires um and it talks about you know what their spending habits are and what kind of things that they do to to become millionaires so it's kind of interesting but uh let's give us a little background on on what we uh you know grew up from we came from from basically middle class backgrounds both of us and uh you know my father worked for a government contractor for 27 years and we grew up pretty modest and i had two sisters uh and you want to tell about your growing up sure um i grew up very rural around a lot of farmland and stuff my dad actually worked for an automotive um manufacturer for gosh i think it was almost 40 years maybe by the time that he retired you know my mom had a job at the local hospital so i mean solidly middle class where we grew up um you know never wanted for anything um but probably um i would never have considered us millionaires and who knows at the time we might have been just because of land and some stuff and things but um you know just uh never wanted for anything like i said but you know i wasn't driving a brand new car when i turned 16 or anything like that so and you know um i kind of was in the same situation my parents you know they didn't pay for me to go to college or buy me a new car when i turned 16. it was like everything we got was was pretty much earned and the only time we got any real gifts or anything from our parents was usually on our birthday and christmas and so about twice a year and uh and that's just how it was and we never you know we understood that and you know there wasn't any expectation if you went to the store that you're gonna get you know get them to buy anything for you or do anything like that out of the ordinary so um you know i went through paid my way through college um and she had some a little bit different similar experience but different um you know we i was lucky enough i went to a state school but i did go to a university um in my state in my parents i was lucky enough that my mom and dad had the ability to really pay for my four years of course it was nothing compared to what it is now which i think upwards sometimes of over a hundred thousand dollars just for a state school was not that i'm not gonna tell how long ago it's been but we of course didn't pay um that amount of money and stuff you know and and i was lucky i mean you know while i didn't get a new car i did get help you know with the car and you know my parents were paying some of the expenses and we did do vacations and disney and you know all that stuff so i'm a little bit probably different paul in that that realm than that um because there's only two of us me and my brother and we are about eight years apart so there's a lot of like only child stuff that happened there um you know with that so um you know we did have the ability again that's why i would kind of kind of call us just really solidly middle class if you know maybe even in today's money maybe a little bit on the upper end and because um we did have you know extras and we could do what we wanted and stuff and and i did get things if you talk to my mom probably too much right you know so well you know one of the things that i found kind of interesting in the book here just looking through he had six myths that he talked about as a millionaires that most people believe about millionaires and the first one he talks about is that he talks about that wealthy people uh inherited all their money that that's the first myth and uh no what do you think about that do you do you think when you think of a millionaire do you think most of them inherited their money i mean was that would that have been your first thought um it depends probably on what time we're talking about right if you talk to me as a kid um i grew up in the you know dallas dynasty area that the stuff that you saw on tv right a lot of that was i think family wealth right just generational love that they just um really accumulated and stuff you know but unfortunately you know i don't have grandparents living or anything like that now but i can surely tell you that you know my grandparents really left little to nothing right for any of the children that they had um my mom or my dad so you know for us um well for my parents let me say that right it definitely was not anything i think that was inherited for them i mean again they've had good jobs they were mindful about their budget right you know they um you know always ensured that they had you know more coming in going out those kind of things and then really for us i mean we're lucky enough that all of our parents still live are living um so if our grandparents didn't leave anything to parents we definitely got nothing right and i um probably when our parents go there may be some cash and houses right and stuff like that that gets passed down and stuff but but nothing i think that would like sway us one way or the other right too it's not going to change our lifestyle and cry you know one thing for for me same type of situation my parents uh you know my grandparents didn't leave them and i still have one grandparent living but my grandparents never left my parents uh much of anything on either side a little bit on both sides you know they had to divide it with a lot of more children so you didn't really get very much but um but there was a little bit of inheritance there but it was nothing you know nothing of any consequence so um for us we have not inherited anything as of yet and i don't really care whether i do or not um but it's not it's not where we got our money so you know that so i have to feel like that but i i don't know that i ever thought that a lot of people inherited but here's the numbers that he gives in here he says 79 received zero inheritance uh and only uh sixteen percent that inherited uh received over a hundred thousand dollars and only three percent inherited more than a million dollars so that's pretty interesting um when you look at those numbers uh the second myth he talks about is uh wealthy people are just lucky and um you know that that's kind of interesting what do you think about that do you feel like wealthy people are just lucky well i mean i think we've had this conversation a little bit just amongst ourselves um what did we say the definition of lucky is really where opportunity meets hard work right i mean preparation yeah like you're you're setting yourself up to be ready when opportunity knocks at that door and i think both of us um know other people right in our community that have if you looked on the outside and just saw them you would be like oh damn they are just super lucky people right that's not true right they've always been number one you know they're great workers they're super smart right they've always you know in their job they've always ensured that they were making the company more than they were costing them right you know so that um and now timing timing is a lot of it i think out there i have a great mentor who i think just really um got into an industry that i had been in previously at a really great time um where you know they were you know just making killer money the industry as a whole right and he worked his way up the the company with that which left him to number one have you know some really great um retirement options and 401ks and bonuses and stocks options right and all that kind of stuff so again is that lucky or is that just being smart about what you go to school for being smart about the career that you have um you know being a really great worker and that puts you in a position to take advantage of all the things that that opportunities are out there i think it's easier for people to think it's lucky that you think i think so and i think a lot of people you know you see the tv shows where people win the lottery and all this stuff but that's not really you know how most people become wealthy and in fact uh there again his numbers here 76 percent of millionaires uh say that anyone in america can become a millionaire with discipline and hard work and i think that's that's very true i think um i think we're proof of that that we've you know that we have maybe not so much on the disciplined side [Laughter] we've made our mistakes along the way but i think that um you know we have worked hard to get where we're at and we don't uh you know uh we don't live lavishly or anything like that we just well i think for us a little bit of personal is that we look at it it's really providential right i think god's been a part of a lot of stuff that we've just definitely been blessed yes that that things have just kind of came and and that um you know um to be able to pay that forward and i do back to the lucky thing i think though sometimes it's easier for a person who's unhappy maybe or unsatisfied to look at somebody and say they're lucky instead of being some introspective kind of like what can i do to to i want to i admire that person gosh i i want that car what can i do to get there to you know put me in in the right spot a little less of you know well it just allows you to not have to take the responsibility for yourself right you know so you say oh it's lucky yeah you know i think that's an easy way to look at it for some people yeah you know the the myth number three talks about is wealthy people make risky investments and what he's talking about there is is did did you go out and do some kind of get rich quick scheme or something like that to become wealthy and um and we can i think well i can attest to the fact that what what we've done in my business of doing real estate it's it it may seem like you're an overnight success but it's been long years in the making my first rental property i bought in 2002 and so you know where i'm at now where it was then is a whole different you know different ball game completely and i think the same thing with her and her career and her job and everything i'd say my risky investment was probably you i'm still not sure it's going to pay off but um i mean right i mean kind of i mean i say that just but it's kind of true i mean to some extent you know and that we took down a path that again like paul said i was kind of lucky enough that um i've had good jobs and made good money that paul was able to kind of do things that we're really i'm much more of a like right now kind of person paul's very forward thinking right where are we going to be how do we get to what's my goal how do i get there um so i mean in in truth right um you know that wasn't an investment right we decided that for the family as i guess as far as like right now we're going to kind of live with me one one income and stuff as opposed to really yeah what she's referring to is you know we've lived especially early on basically off her income and we said we're gonna live off one income and the other income is going to be completely reinvested and we're just going to try to to to use that for our future and so everything that i've made has either been reinvested in buying more properties or we put in in stocks or mutual funds things like that and as well as you know she's she's invested in 401ks and things like that i mean right as everybody always says don't pass up free money so if the company was ever actually putting any money in we always at least took advantage of that right the match because that's just silly not to do that but really we've looked at i think um kind of jokes of security whether it's around or not like whatever right because we kind of have said we don't think it'll be around kind of i don't so this has kind of been you know his the real estate really our social security our kids college you know and those kind of things like how do we get there yeah and i think that um you know i i don't believe that people take most in and back to the what he was talking about here uh that people take risky you know make risky investments or uh to get rich quick uh he talks about that's the next one is the people take stupid risks to get rich quick i i don't think either one of those are very true with the millionaires that i know i know several other people that are millionaires and i don't feel like any of them have been very risky with their money and his uh his statistics here kind of prove that out he says that you know basically 79 of millionaires reach their millionaire status through employer-sponsored retirements um that kind of surprised me i did not feel that that that would be the case i would have thought because most of the millionaires i know either made their money like i did in real estate or in owning a small business or being a business or some kind of investing or some investments of some kind um that's what i would have thought more likely but that's where a good portion of our wealth comes from is from her 401ks and her investments in her retirement so i do see how that's possible well in the stock market too i would say right in the past i mean let's look at it over what a 20-year period or something really for baby boomers and stuff have really at least what's the return the average rate of return eight to ten percent probably even higher you know in some areas and stuff so you can see how that money just um does and and start when you're young right that's that's a key we have it we have a daughter who is um in relate teams and we've really tried to talk to her about the importance of compounding interest um you know because you really don't you don't get it until you see the actual um bank statement come right and you can get it to say okay if you do it now you know you only have to do it like 18 to 22 or right that's some of the stuff that you can have and then and that that was one thing that i did early on my my uncle and i actually you know he actually told me you know you need to invest in early on in some mutual funds and take you know some savings and put it aside it's going to grow and uh and he's a he's a multi-millionaire so i i trusted his advice and that's one thing i did around 20 21 years old after we had that conversation i i opened up on his recommendation and opened up an account and started doing that and that helped us when we got married that was where i took the money out of that account to pay for our down payment on our first house um so there was a lot of uh benefits there and that during those you know 10 years or so before i bought that we got married and all that there was a big run-up because of the dot-com you know stock market so stock market was just really on fire and you're telling our age i think yeah well okay but it just by but there here's where luck plays in we did buy the house in february uh we closed on it and in march the stock market crashed into the dot-com bubble bursting so we got our money out right at the peak of the market of course i didn't take all of it out but my account almost cut in half like the next month so i was able to sell my stocks at a high point in the market which allowed me to get more value out of them of course you know going on to myth 4 he says that talking about people taking stupid risks to get rich he says that the average millionaire hits the 1 million dollar market 49 years old well i'm going to tell i'm going to tell my age because she may not want to tell her much about you like um i'm my 50 years old i just turned 50 years old last month so that's a pretty close on statistic um i didn't turn uh we've probably been in the million dollar range for several years now so probably before i was 49 but that's probably pretty close though i was probably 47 48 somewhere around there by the time we hit the million dollar mark so um only five percent of the millionaires got there in less than ten years um so that's that's probably i i mean i feel like that's accurate for us too because it took a lot longer than 10 years well i mean it makes some sense i mean i think statistics will show like your why greatest earning potential is really kind of in that whole 1 35 to probably 55 you know age and stuff where you know it's probably making the most money your kids are probably hopefully moving through their life and doing the things that they need to be doing kind of you know you're downsizing some i mean so you're making some adjustments you know which i think helps for people to get to that number faster yeah i i i think that uh i agree which is interesting too i think like when you think of the millionaire next door i mean we've had this conversation um what does that really mean right and i guess we'll probably talk a little bit about that yeah i'm going to get through these and we'll kind of talk about that a little bit more uh the number five is wealthy people have prestigious private school educations um you know they're again i i went to community college i have two associate degrees um she went to state school both times i do have an mba but it was here in the state that we live in now so both of them were yeah state schools um good schools i won't say that they you know weren't um higher tier or anything like that but i mean a state school we certainly weren't paying you know harvard princeton you know kind of tuition on anything like that so you know accurate there um the truth is 79 of the millionaires did not attend prestigious uh private schools and actually 62 percent graduated from public state schools like both of us um and eight percent uh attended community college that would have been me which was a state community college and nine percent never graduated college at all which i know personally two millionaires i'm very close to mentors of mine that uh neither one of them graduated from high school so well i you know i think in today's world as well i mean we could sit here and talk about student loan debt and what it does you know but if you um you know a trade is i mean it used to be i think maybe when we were kids kind of people look down on a trade maybe like hey you don't want to do that right you wanted to go to college like that's how they saw how you would like get ahead i think today people are much smarter and brighter about stuff when you say and that they're saying like i mean trades because today number one they have a need for them you know and if you are if you're a good tradesman a skilled trades person and that's what my dad was right you know and he um finished high school but then went along to like get an apprenticeship right for skilled trades and stuff like that but um if you're good i mean there's opportunity out there for you making good money without a hundred fifty thousand dollars in student loan debt that you have to pay off to get to where you're living you know the american dream if you will so i think if you're gonna get into something like electrician plumber heating air attack something like that there's a lot of opportunities there uh now my grandfather used to teach me he's he would work me to death and then i'd be complaining and he'd have me laying brick or hauling stuff or pouring concrete or you know and he was a pipe fitter like much like her dad was a union pipefitter and uh he had me digging a sewer ditch one day and he come out there and i was i had blisters on my hands from shoveling and picking and all that stuff and he said he said you i was complaining about how sore my hands against you you don't like that much too you don't like this hard back breaking work dude i said no i don't like it at all he and he said he said well i hear your grades aren't too good in school and he said if you don't want to be digging ditches and you want to be pushing my pencil that's what he would call it he said that you need to do better in school and he he always you know so i don't think he looked down on it but i think he just thought if you're smart you should be in his idea of pushing a pencil working in with your mind and not with your muscles right um well that goes to my point i think that was different kind of when we were kids because they thought college is where you needed to go to have a nicer house or have all this other kind of stuff and unfortunately i think college is so expensive these days for folks that it becomes difficult you know yeah i mean if you pick a wrong major i mean if you're in like you know fine arts nothing wrong right you can send that to their studies or something like that okay don't even forget but like you know what i mean like if you pick something that doesn't really happen don't yeah it doesn't have a clear cut i think um job prospect right i think it's not it's not worth the risk right i think you have to be careful of what you pick uh as your major and what you're going to go after and have a goal and have a plan i think i think this tells you that it doesn't really matter where you come from or where you're starting if you have a clear-cut kind of plan and a goal and really follow some um easy kind of financial building blocks you know you could have an opportunity to get where you want to be on myth number six here he talks about how wealthy people uh have high paying jobs that's myth number six um i don't know that i ever thought i mean i probably thought that that's possible that uh some of these uh people like doctors and lawyers would be millionaires i would think that's possible um i don't know how would you feel about that would you think that myth would be true i mean did you think that way well sure i guess then or not or or well yeah before you i mean like younger yeah um yeah i mean i i guess i definitely thought like if you were white collar if you will right some type of job maybe that needed maybe actually over a like even more secondary education you know after your bachelor's degree and stuff that you know you definitely were kind of guaranteed but it's something like i think i've read lawyers coming out of law school like the average salary is like eighty thousand dollars which if you're not making any thousand dollars i think that sounds like a lot of money but if you've got two hundred thousand dollars four thousand dollars loan debt yeah like you're like dang that's way upside down you know kind of a deal but with the high paying thing right it's always like it seems like paying to get paid that for a while and then well that's and it's not yeah he talks about your lifestyle gets used to he talks about that a little bit too he calls that lifestyle creep the more you make the more you spend the more you know the nicer house you live in the nicer cars you have all those kind of things kind of creep in there but here's what he comes back on the truth on this myth number six he says one-third of millionaires have a six-figure income uh in a single work year and only 31 percent of them averaged a hundred thousand dollar a year income and seven percent averaged over two hundred thousand dollar household income over the course of their career so that's kind of unexpected never had a six figure yeah one third never had 33 never did is that what i said i did already no i don't know that's what i'm saying like one of millions one third of theaters never had a six-figure single year single working year so that really means that 66 did yeah so it i mean there kind of is a little bit of trick well it's not 100 but only 31 of them averaged over 100 000 a year and only seven averaged over 200 000 a year so think about those statistics there i mean um basically he's saying even these people that made less money could still get there it's just going to take a little more effort on your part so after going through all these things you kind of kind of wanted to talk a little bit about what you know what what did you think about when you growing up i mean i know like you said we talked about you being on tv and stuff uh talking about like dallas and all the tv shows uh you know falcon crest and and i remember like dynasty and and even even the comedies like silver spoons and and you know uh different strokes you know all these people had millionaires and as characters in the shows so growing up in the 80s which kind of there you go shows my age um you know i saw a lot of that and i thought and then this is you know they were driving around it's chauffeur driven limousines and they're having living in big mansions and driving fancy cars and all that kind of stuff was that's what i thought of as a millionaire you know and uh you know it really um until until probably i was about 10 or 11 12 years old somewhere in there you know i realized that that that you know that i knew a millionaire and and that would have been my uncle at the time and he had you know and started his own business and become uh very wealthy doing that and you know and i saw you know he they lived in a house just like us and they moved into a bigger house and they built a swimming pool and he you know he started buying cars and you know motor homes and all these big fancy stuff and uh and he had a son my age my cousin and we grew up to you know living about six miles apart and so we i'd go over and spend the night with him and he always had all the latest toys and gadgets and gizmos and i was like you know i saw that and i was thinking man this is cool stuff i wish we had this stuff you know and i think that uh was my first you know experience of like learning what a millionaires really liked what it what the lifestyle was a little bit like and what it was like to have some wealth um it was a little different than what was on tv but but i did understand that i liked it and that's kind of what i wanted you know what made me want to achieve that kind of you know wealth as well what do what do you think i mean did you have uh experience i mean just what you said um again kind of i think we're particularly where i grew up um i don't know that we i mean if somebody had a swimming pool yeah they were like wake hole right you're like kind of a deal but i mean even my where i grew up because it's rural which i think makes a difference right um a lot of people were just i mean we were all pretty much the same kind of a deal um i i think about i told you this i guess the one time um we had somebody's and it's it's a tragic story actually how they came upon their money and stuff but they built a a large home in the area um way bigger than any of us like had lived in and i think at that point it was kind of like wow that's some you know must be some serious cash um that they have there but that's really i mean excited from tv right again i think if somebody said oh you know what do you like asked 12 year old heather what's a billionaire bike and it would probably have been some of the stuff that you just said there right you have people either in fancy sports cars all the time right or you know they're living in super luxurious houses with maids and all that kind of stuff yeah you know that that's what i would say um it was so um yeah i don't you know and then today i guess if people i mean i know you tell us all you tell me all the time kind of where you know are um where we fall like it's financially wise right you know in our net worth and everything like that you know i mean and i'm like you're a liar because like i feel like we live nothing um in my head right that says no you really have this kind of net worth and i'll be like well we don't live that way you know i mean and then that's why i feel too i feel like you know i look back at that i want to yeah like i want to live the way i think that that number should make it so that's even harder because in my head i think i'm thinking oh damn we got that you know and i'm not saying we're not grateful and blessed and all that i think it's just i think it's a lot different than what people think you know when you finally achieve that millionaire status it's not what you think it what what it's going to be uh i i i guess is what i kind of what i like i mean it's the whole deal it's back to you just won the lottery right like so you won make up a number 50 million dollars i watched that on a show right what's it called like my lottery dream home right and these people and i'm thinking to myself they've won 10 million dollars and they're looking for like a five million dollar home right and then all of a sudden you're thinking oh this i'm thinking how you gonna afford that you know you you gotta keep up you buy these big houses it's going to cost you that much money or more to keep it going you know what i mean same thing like nfl right we talk about that a lot of times like sports guys and stuff who get these super super big packages in the beginning of their career right and they are living it up right you've seen all that stuff on espn i'm sure like entourages right and i'm buying multiple houses and multiple cars and all this kind of thing but you know that money's not going to be there forever i mean so that's that's just hard to get in your head that just because you have that number doesn't mean you can live like you have that number unless you're jeff bezos or something right that just has that's where it comes that's where income and net worth are different and that's where a lot of people don't understand um you can have millions in net worth and not have a huge income um because uh if i was to like i said win the lottery and get and they give me uh you know we we did a thing a few years ago where you paid like 100 for our chance to win this million dollar dream home you remember that yeah and uh you know uh the lady who actually won one of those was on one of those uh lottery shows and uh and she won it but she couldn't pay the taxes on it so she had to sell it so you think about that for a minute if i if i want a house and it's worth a million dollars and i don't owe anything i don't have a mortgage well then i'm a millionaire because i've got an asset with a million dollars take the taxes out of it you're technically a millionaire but are you going to be able to pay the electric bill right the tax bill the next year the um all the utilities and things that are and the maintenance for like keeping the lawn up but i mean there's so much that's got to be done to a huge house like that um you know it's it's going to be probably more than you can afford if you're just making 50 60 000 a year out here with an average job an average salary so net worth and income are totally different you need to have a large income to support a lifestyle of where the servants and the cars and the pools and the mansions and all that um and it helps if you have the net worth too but there's people out there that have a lot of income like she's talking about the football players and people like that that go out and spend a lot of money but then when that income stops they don't really have anything to show for it but they have no network yeah they have no net worth they haven't invested their money they've spent it and there's a big difference and that's kind of what we're trying to make a point here is is that you know net worth is great and it and it's it's interesting and i think that's what they're saying here in these both of these books is you know your millionaire next door and your everyday millionaire these are people that have net worth but they don't have huge income probably you know and and what we would see is like lavish you know lifestyles um because they it's saved and invested properly and um so i think this does allow you to to see that you can become uh financially independent and i think when you get to a point where you're going to stop working and you can start living off the assets that you have and in our case we have rental properties as our biggest asset and they generate cash so it's not like something that's just an asset that doesn't generate any income so it does inter uh generate income uh that that's going to be able to hopefully you know support us very well in our retirement and we you know we still got our ways to go for retirement and i continue want to continue to invest and go forward with that but but i think it's an interesting look and if you get a chance to look at either one of these books it's a good read it's a it's a good and it will change your perspective on what a millionaire is and what it takes to to get to be a millionaire so like i said i recommend both of these books uh like i said this is the newer one uh this one was just released by chris hogan everyday millionaires and this is an older one the millionaire next door they also did another book that i read also it's called the millionaire mind which is uh very it's talks more about the mindset of the millionaire is another good book too but if you're interested in learning about this you can read either one of these books or if you want to learn more about real estate investing go to retire rich with realestate.com or check out our other videos and please subscribe to our channel and that helps us grow our channel and reach more people so thank you for watching and have a good day thanks thanks for watching if you enjoyed this video please press the like button and if you'd like to see more subscribe to our channel don't forget to hit the bell for notifications so you know when we release new videos and if you'd like more information on real estate investing go to retire richwithrealestate.com until next time i'm paul price teaching you how to retire rich with real estate you

Channel: Retire Rich with Real Estate

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Keywords: real estate, investing, rich, wealth, wealthy, money, financial freedom, millionaire, million dollars, investor, everyday millionaires chris hogan, everyday millionaire, chris hogan, paul price, retire rich with real estate, retire early, retirement planning, millionaire next door, millionaire mindset, how to become a millionaire, how to be a millionaire, how to become rich, dave ramsey millionaire stats, millionaire lifestyle, money habits, everyday millionaires, dave ramsey

Id: eMtDTDbvULs

Length: 35min 8sec (2108 seconds)

Published: Wed Aug 05 2020