The Millionaire Next Door - Part 3

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Well into part 3 of The Millionaire Next door at this point. I wanted to cover some of the topics presented in this part of the book.

No Rolls Royce Please
This chapter is largely about the actual cost of luxury items. Basically, if you are gifted one luxury item (or you purchase one with a gift), it may often lead to purchasing others. The best example being, if your parents buy you a house in a very nice neighborhood, you will have more expenses. These could be anything but here are a few common examples:

• Increased property taxes
• Private school tuition
• Pressure to purchase “nicer” things

Buying a Car Millionaire Style
Here, we review the buying habits of the average millionaire. The author does a lot more digging into the statistics, but this is what I found most interesting.

• 81% Purchase new or used vehicles
• 23.5 Lease
• 25% go at least 7.5 years between purchases
• Average cost of a vehicle purchase is 24.8k (about 2% of their net worth)
• 37% of purchased vehicles are used
• If the average American spent the same amount by net worth, they would spend $580(!)

Purchase Behaviors
This detailed the common purchasing behaviors by the sampled group when buying a new car. 45% of the people surveyed were “dealership loyalists” meaning they tend to use the same dealership each time. They also tend to refer their customers to this dealership. This type of symbiotic relationship suggests that the dealer offers them the best price with little negotiation. This saves ample amounts of time, and to the common millionaire, time is money.

At this point, I am still finding some interesting facts surrounding this population. If you pick up the book, or if you have read it, I would love to hear your thoughts.

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