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Think Like a Millionaire

A dozen years ago, researchers surprised us by revealing that millionaires do not have trust funds, drive flashy cars, or own luxury yachts. Instead, the wealthy types profiled in Thomas J. Stanley's The Millionaire Next Door build their fortunes in one generation, drive inconspicuous cars, and live below their means.

But what makes these people tick?

In a sequel, The Millionaire Mind, Stanley probes the brains of millionaires to find out how they think and how their thinking makes them rich. What makes multimillionaire households so successful at piling up serious wealth in just a few decades?

For one thing, they think very differently from a typical family that's stuck in a consumer spin of debt and spending. Their attitudes are very revealing:

A millionaire's perspective:
Most millionaires think like entrepreneurs. They build businesses, look for investment opportunities everywhere, and strike when they know there's money to be made. But that's not their only advantage. They have ideas that can help everyone who wants to build their net worth.

Millionaires seek careers they love that make full use of their abilities and strengths. Millionaires know (or learned the hard way) that any old dull job, one that doesn't challenge your mind or fit your capabilities, can quickly sap your energy and drain your will to succeed. When you find a career you love, you easily find the energy and enthusiasm to be productive and can see the results of your productivity.

Millionaires invest in themselves. Many millionaires become entrepreneurs because they know it's riskier to rely on someone else for their livelihood than to be in business for themselves. To protect their biggest asset, they stay fit, disciplined, and organized, and they work hard. They're not workaholics, but they're extremely productive during their working time. They don't let critics deter them, and they have a talent for channeling criticism into motivation.

Millionaires find courage. Becoming a millionaire involves risk, and millionaires cultivate the courage to take appropriate risks despite the chance of failure. That doesn't mean they close their eyes to danger. They plan, prepare, confront problems, and outwork their competition.

Millionaires view their households like a business. When it comes to everyday matters, millionaires think about household expenses not just in terms of the prices they pay, but also in terms of the value and quality of the items they buy. They clip coupons to buy groceries but invest in furniture that can be refinished or reupholstered to last a lifetime.

Let's delve into this point a little further. I see how a soon-to-be-multimillionaire would clip coupons on the road to building the family's riches, but why keep it up? Does saving a couple of dollars a week matter after you've built a serious amount of wealth?

According to Stanley, it does -- and it's also proof of thinking like a millionaire. In driving this point home, he noted that over an adult's lifetime, a typical affluent family spends $400,000 to $600,000 on food and household supplies. If coupons and bulk purchases saved 5% of that amount, that's $20,000 to $30,000 available for investing.

Imagine what you could do if you had $20,000 or $30,000 to invest at just the right moment. Do you think now's the right moment, for example, to buy stocks like Google (Nasdaq: GOOG  ) and Research In Motion (Nasdaq: RIMM  ) that have gotten pulled down with the rest of the ailing market?

If you had $20,000 on hand, you could take advantage. Or you could try to find a bottom in financials like Citigroup (NYSE: C  ) or retailers like Home Depot (NYSE: HD  ) . Without that money set aside, though, you're stuck watching those bargains disappear.

Lastly, millionaires think differently from the crowd in another fundamental sense -- they set their intention to be financially independent. That's a different goal than setting out to be comfortable, affluent, or merely able to retire one day.

Imagine how differently you might manage your money if you made it your mission to be financially independent. Small changes might add up to some serious wealth if you considered how every dollar that flowed through your fingertips could be put to work in support of that goal.

You might even start clipping coupons.

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