Wes Moss: How to live like a millionaire

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here Monday mornings.


In his 1996 best seller “The Millionaire Next Door,” Thomas Stanley detailed the traits of the average millionaire. Notice I didn’t say rich person. Millionaires have a net worth of more than seven figures and are also “financially free.” That excludes that guy who makes $50,000 a month but spends $60,000 a month living in Buckhead, driving a Bentley and eating at Chops three times a week.

Not much has changed about this group since 1996. So today in 2011 we’re still talking about good old-fashioned millionaires — couples (and some individuals) who are truly “rich” (see my blog on the Rich Ratio).

I see these people every day of the week. They drive Toyotas, Hondas, Kias — and the occasional Jeep Cherokee. They have saved for a long time and finally find themselves in a position to quit their job and live life on their own terms. Here’s what they have in common.

1. Job stability. They tend to stay with one employer for a very long time — sometimes 30 or 40 years. Being a company man can offer huge rewards, including a nice ending salary, significant pension benefits and hefty 401(k) balances. I know it’s almost unimaginable in this day and age to work for the same employer for a couple of decades, but there are still people who do it, including teachers and other government workers.

2. Steady saving. I’ve rarely met a rich retiree who didn’t start making the maximum contribution to a 401(k) in his 20s or 30s. This year you can save $16,500 in a 401(k) or 403(b), and $22,000 if you are over the age of 50. That doesn’t count your company’s “free match” if it is generous enough to give you one.

3. Saving the raise. One trick I’ve seen these savers use is saving at least half of pay raises. Instead of going toward a new boat or vacation, those added dollars end up in retirement or brokerage accounts.

4. Investing. Millionaires who own stocks tend to hold their investments for decades (not just years). They let their dividends re-invest over time and thus participate in the long-term growth of our economy. This makes them different from “savers,” who only invest in CDs or money markets.

5. Owning. Business owners, partners and other employees who are fully vested in a company tend to end up with substantial savings.

6. Mortgage. One key “rich” person move is to get rid of the mortgage by age 65. This may take two or three extra payments per year. Go to this mortgage payoff calculator to see what a few extra will do.

7. No fancy toys. Very few millionaires own BMWs, Mercedes, $3,000 watches or $5,000 suits. Nearly 40 percent of the “rich” buy their cars used.

8. Credit. The better your FICO score, the lower the interest rates you’ll pay on your mortgage and car loans. The “rich” do this by carrying low debt loads.

9. No lotto. Rich people don’t buy lottery tickets. It’s a fact. I’ve never seen a millionaire buy a lottery ticket, and I’ve never met anyone who won the lottery and still had the money three years later.

10. Real estate. They buy homes that are not overly priced or extravagant in rentable areas. They maintain them appropriately and rent them out consistently. They pay down their mortgages and end up with cash-flowing assets that build their net worth slowly over 30 years.

The lesson: An average income, carefully managed, can generate considerable wealth over a period of time. To borrow a line from radio’s Dave Ramsey, “Live like no one else today, and one day you’ll be able to live like no one else.”

– By Wes Moss, for Atlanta Bargain Hunter

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16 comments Add your comment

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September 12th, 2011
2:28 pm

All of this is pretty much common sense, but unfortunately, very few people have common sense these days.


September 12th, 2011
2:59 pm

Our government needs to understand these principles – not just the people!

Destin Dawg

September 12th, 2011
3:01 pm

we worked part time jobs all the way through school…. we’ve saved and invested since the 1970’s… mutual funds in an IRA…. bought used cars for ca$h… modest vacations… built 3 nice brick homes one in Indiana 2 in Ga… good tax free profit on each one…. had a 1 man sales company… commission rep… traveled 4 states… most people don’t or won’t relocate/ travel like I did…. re tired million $$ net worth.. at age 55… Always save 1st… never borrow for anything but your primary residence…. think and vote like a non union conservative… take personal responsibility !!

Vampire Bill

September 12th, 2011
3:18 pm

I read that book a long time ago and its served me well. Far from a millionaire but I live below my means and save my money. Debt free and money in the bank. Oh and being a single guy helps.

Destin Dawg

September 12th, 2011
3:24 pm

I did buy BMW’s and Porsches.. ..but used like CPO…. and not the most expensive models and then kept them 3 or 4 years… which was over 100,000 ++ miles in my sales job… save your lotto money ( also union dues )… in a retirement Acct…

Rational Citizen

September 12th, 2011
3:57 pm

Do what most of the “job creators” in this nation do…win the crotch lottery. It’s all about who the doctor yanks you out of. Then spend the rest of your privileged life complaining about how the government wants to punish the hard work of your great-grandfather by raising the estate tax so you can’t enjoy the fruits of labor you had nothing to do with.

Uh Duh

September 12th, 2011
4:05 pm

“Rich people don’t buy lottery tickets. It’s a fact. I’ve never seen a millionaire buy a lottery ticket…” Wes, you must not read the very newspaper your column is featured in. The 25 year-old heir of the Marriott hotel chain just hit for $107 million and plans to buy…a BMW.

Destin Dawg

September 12th, 2011
4:09 pm

Rational Citizen… your attitude won’t get you very far… take personal responsibilty… it’s a free country… work hard…. maybe 2 jobs ( we did )… start a business…. $ave and invest … well with your attitude… maybe you should just play the lottery…… you must have lost the ” crotch lottery ” !!


September 12th, 2011
4:14 pm

Uh Duh… you missed the point… the heir of hotel chain is NOT the Millionaire… many heirs get left out !!! that’s NOT how you do it…. crotch lottery loser !!!


September 12th, 2011
4:49 pm

job stability? good one. i tried that once then the company sold out and the new owner scrapped all the benefits I was staying there for. so glad I stayed at a god awful job for all those years to get my sabbatical yanked by the new owners right when i was about to get it. good luck trying to find a company with a pension, health insurance or even 50% matching 401k. so are you saying we should all work for the government?


September 12th, 2011
7:02 pm

save your lotto money … in a retirement Acct…

LOL I plop down a dollar (when I think about it) when the lottery goes over 100 milion. The dollar isn’t going to hurt my retirement account (being self employed, they cap it) and I can dream BIG for one dollar. Best investment ever when ever I remember to do it. Hell, a movie costs 6 bucks and only lasts a couple of hours……….. I get anywhere from 72-24 hours off a lottery ticket…….


September 12th, 2011
7:28 pm

Oh and by the same token? The time I went to Vegas, we planned before hand how much we were going to lose. We took $500 “gambling money.” We were there 5 days (and went to the NASCAR races that weekend). We used the same $500 for all our concessions at the race and for several meals. I gues I had to have ‘won” some money since at best recollection we spent about $1500 of cash on that $500. The onlt thing that went on a credit card was the motel room. Everything else came from out $500 “gambling’ money. Did Vegas once. Wasn’t impressed. Can’t see myself going back.


September 13th, 2011
1:57 am

I play they lotto and have net worth over a million, and have a few new luxury cars, but then again, millionaire next door said there were plenty of people like me (except the lotto part). Just a minority as far as millionaires go. Of course, I often wonder what’s the point of playing the lottery as the jackpots I play for don’t exactly move the needle much (I play whenever I’m at a gas station or grocery and the lotto machine is open and I have a dollar bill–but to be fair, those three only occur once every couple weeks or so). And most important, though it is nice to dream, it is annoying to keep losing! And the one time I “won” I forgot to redeem the ticket for $2 before the 180 days was up.


September 15th, 2011
8:06 am

Although I’m a “millionaire” I drive a BMW that’s 11 years old. I bought it when it was 5 years used. My children pay for their own soft drinks when we dine out. Dollar movies were a common event until the thugs trashed the theater. We shop at Walmart, and on vacation we still fly coach (unless we have a five hour flight and can’t get the bulkhead seat. Between working my shift at the Kiwanis fund raisers, helping the kids with their homework from a public school, or running my office of seven employees, we occasionally splurge in our pool or hot tub, which is our most enjoyable perk. Oh, and we play the lotto. At birthdays we buy a couple scratch offs, but mock the wastefulness of it. I’ve invested and lost hundreds of thousands of dollars in businesses that failed. But we keep on trying and hoping that our hard work will pay off. But with this anti-business regime in DC, I have to be careful if we can afford to take anymore risks in making more jobs out of the fear that it’s all just folder for a politician to take away.

Ole Guy

September 16th, 2011
7:07 am

Probably the best way to live like a millionaire is to NOT PRETEND to live like a millionaire.