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Hey I think I get that some people like to pay down their mortgage and some people (most millionaires?) don't.

Is there anything else about the millionaire mind that we can discuss?
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Anything is fair game. Personally, I'm interested in learning about self employed millionaires. Know any?
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<<< Personally, I'm interested in learning about self employed millionaires. Know any? >>>

Talk to just about "any" (I use this term liberally) physician. The majority are self employed or work in small groups, 5 or less. Now while they might not currently qualify as millionaires, they should have the earning potential barring their massive college and medical school debts.

JLC
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"Anything is fair game. Personally, I'm interested in learning about self employed millionaires. Know any? "


If you were to inquire around your hometown, probably the people who own the franchises such as McDonald's, KFC, Subway, Kinko's, TruValue Hardware etc. are, or are on their way to being millionaires (determined by net worth). In my town, I can also point out real estate developers, established chiropractors and dentists. Doctors are not as well-heeled as they once were and tend to have lots of student loans, and high expenses right out of the gate. Small businesses such as publishing and printing, asset management (financial and real estate) firms, waste handling firms (recession proof also), and the auto salvage business are candidates for millionairedom in my region.

Most of the self-made millionaires in my region have pedestrian, unromantic, unexciting businesses that are not by any means glamorous but require day to day attention to detail, customer service, and often involve doing what no one else wants to do but is a necessary cog in the smooth workings of the local economy. Very few people in America are millionaires because of saving their 20% of their monthly paycheck and stashing it in their 401(k). Most people in American do not have the nerves or the family backing to take the financial risk of being self-employed or starting or taking over a business. But sometimes, being fired or downsized can be the impetus to bigger and better opportunities because there is no place to go but up!

The downside to being a millionaire on paper is that most of one's assets are tied up in the business which is usually tricky to sell and gives the greatest return when leveraged. So cash or near-cash is usually not that great a portion of the balance sheet. The cash is used to pay off working capital, acquire new assets or refurbish etc. Anyone I know who has tried to spend his cash intended for working capital has ended up working 80 hour weeks because he/she can't afford staff or efficient equipment.

This readers of this board should look around their home towns and report back to the readers here regarding the millionaire types in their own backyards. (Balance sheet millionaires, not high income types) What do you think?
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This readers of this board should look around their home towns and report back to the readers here regarding the millionaire types in their own backyards. (Balance sheet millionaires, not high income types) What do you think?

Guy across the street from where I used to live used to work for an international air freight company. From what he learned there he started his own business doing something I never understood to facilitate the movement of products across international boundaries (I know what you're thinking--it isn't smuggling!), and now has some of the major high-tech companies as customers. His company is worth millions.

Since this was Silicon Valley, the wife and I knew others who were stock option millionaires, of course. Those who cashed out in time are probably still millionaires.
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Very few people in America are millionaires because of saving their 20% of their monthly paycheck and stashing it in their 401(k).

What do you think?


I think there are more 401(k) millionaires than you realize. At 10% compounded it takes 25 years of saving 10,000 a year.
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I think there are more 401(k) millionaires than you realize. At 10% compounded it takes 25 years of saving 10,000 a year.

I did some projections on my own money and, if one includes both the member and employer balances in my pension, between my pension, 403(b), Roth IRA, and taxable investments, in 10 years when I retire it looks like the total will be about $1.2M, assuming 9% growth and continuing levels of contributions as at present. Of course a whole lot can happen between now and then.

My income isn't all that fantastic--I am just a working stiff at a community college--but I have been dilligent saving and about 5 years ago got serious about the 403(b) and later in taxable investments. It does help to live way below my means and to direct as much money as possible to savings and investing.
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"Very few people in America are millionaires because of saving their 20% of their monthly paycheck and stashing it in their 401(k). "

Those who were savvy enough, and got their 401K matches in company stock (3 or 5% or whatever) were often richly rewarded. For example, WCOM stock rose by a factor of 40 over the past 12 years. GE stock has gone up by 40 since the early 80s.

If you worked for one of a hundred companies or more, you would have been richly rewarded.

Just being in the SP500 for the past 10 years has done wonders for 401Ks. Of course, repeating that 20% per year may be hard, but for those in the market, they have done well.

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Those who were savvy enough, and got their 401K matches in company stock (3 or 5% or whatever) were often richly rewarded. For example, WCOM stock rose by a factor of 40 over the past 12 years. GE stock has gone up by 40 since the early 80s

Well I dont know about everyone but you hit the nail on the head for me.Mine has been because of WalMart stock.

Rockco
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If you were to inquire around your hometown, probably the people who own the franchises such as McDonald's, KFC, Subway, Kinko's, TruValue Hardware etc. are, or are on their way to being millionaires (determined by net worth). In my town, I can also point out real estate developers, established chiropractors and dentists. Doctors are not as well-heeled as they once were and tend to have lots of student loans, and high expenses right out of the gate. Small businesses such as publishing and printing, asset management (financial and real estate) firms, waste handling firms (recession proof also), and the auto salvage business are candidates for millionairedom in my region.

Most of the self-made millionaires in my region have pedestrian, unromantic, unexciting businesses that are not by any means glamorous but require day to day attention to detail, customer service, and often involve doing what no one else wants to do but is a necessary cog in the smooth workings of the local economy. Very few people in America are millionaires because of saving their 20% of their monthly paycheck and stashing it in their 401(k). Most people in American do not have the nerves or the family backing to take the financial risk of being self-employed or starting or taking over a business. But sometimes, being fired or downsized can be the impetus to bigger and better opportunities because there is no place to go but up!

The downside to being a millionaire on paper is that most of one's assets are tied up in the business which is usually tricky to sell and gives the greatest return when leveraged. So cash or near-cash is usually not that great a portion of the balance sheet. The cash is used to pay off working capital, acquire new assets or refurbish etc. Anyone I know who has tried to spend his cash intended for working capital has ended up working 80 hour weeks because he/she can't afford staff or efficient equipment.

This readers of this board should look around their home towns and report back to the readers here regarding the millionaire types in their own backyards. (Balance sheet millionaires, not high income types) What do you think?<i/>

I'm fascinated with this aspect of Stanley's book -- the risk of being self-employed v. the risk of working for someone else. I am very interested in looking at the finances behind various small business opportunities, but am completely ignorant as to how to do this. For example, how much does it cost to buy and operate a small cafe/drycleaner/drugstore/whatever? Beyond knocking on doors, talking to acquaintances, phoning business owners, where does one find this information?
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There was recently a case of a woman whose account accidentally got credited with $350,000 meant for one of the UN relief agenices. She used the money to start a dry cleaners. Two years later the bank realized their mistake and sued her to get the money back. She said she only had $35,000 cash in her assets. The bank wanted her to sell the drycleaners but she said it wasn't possible.
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There was recently a case of a woman whose account accidentally got credited with $350,000 meant for one of the UN relief agenices. She used the money to start a dry cleaners. Two years later the bank realized their mistake and sued her to get the money back. She said she only had $35,000 cash in her assets. The bank wanted her to sell the drycleaners but she said it wasn't possible.

Beyond a lawsuit, I would think she would be facing criminal charges. And why was it impossible to sell? Lack of buyers or lack of desire? What a scam!
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Then again, the company I work for doesn't match a dime in my 401k.

cat
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