Is There A Millionaire Next Door?

According to MarketWatch.com, there were 6.1 million millionaires in the U.S. as of January 2014.

Chances are one of them lives near you.

If so, what lessons has that millionaire neighbor learned that we can benefit from?

At the Business Insider website, personal finance writer Len Penzo came up with his list of 19 common sense tactics of that millionaire. I picked 10 of my favorites and added additional comments.

1. He always spends less than he earns. In fact his mantra is, over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

2. He knows that patience is a virtue. The odds are you won’t become a millionaire overnight. If you’re like him, your wealth will be accumulated gradually by diligently managing your money over multiple decades.

3. He pays off his credit cards in full every month. He’s smart enough to understand that if he can’t afford to pay cash for something, then he can’t afford it.

4. He realized early on that money does not buy happiness. If you’re looking for nirvana, you need to focus on attaining financial freedom. That freedom comes from being debt free.

5. He understands that money is like a toddler; it is incapable of managing itself. After all, you can’t expect your money to grow and mature as it should without some form of credible money management.

6. He’s a big believer in paying yourself first. This instills financial discipline. He knows that you can’t spend what you don’t see. And to this one I add: He also knows how to pay God first and ask for His wisdom in financial decisions.

7. He knows that failing to plan is the same as planning to fail.

8. He realizes that stuff happens, that’s why you’re a fool if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner and can be triggered from multiple sources: the death of the family’s key bread winner, divorce, or disability that leads to a loss of work.

9. He understands that time is an ally of the young. He was fortunate enough to begin saving in his twenties so he could develop strong financial habits and take maximum advantage of the power of compounding interest on his investments.

10. He’s never been impressed by a person living in a McMansion and driving the latest luxury import. When you go to his modest three-bedroom house, you’ll drink Folgers instead of Starbucks. If you need a lift, you’ll ride in his ten-year-old economy sedan. And if you think that makes him cheap, ask him if he cares.

Penzo’s last point reminded me of a sermon by T.D. Jakes. He stated that a society of people who don’t know who they are define themselves by brand names. “When you don’t know your name, you need my [the brand] name to make you great.”

I suspect that millionaire next door agrees.

By the way, can you guess which state has the highest number of millionaires per capita? According to marketwatch.com it’s our former home state of Maryland.