Marriage, Mortgage and Faith…Reading Journal Week 34

My blog and I can’t seem to get together these days. I still farm. I still work. I still carry a stack of books around with me everywhere.

Recently I was talking to some co-workers about “rich people” saying you probably have no idea who they are. You only notice the flashy jerks but that doesn’t mean they are all flashy jerks.

So who are the millionaires really? That question was answered by The Millionaire Next Door by Stanley and Danko. Stanley goes the next step to find out what’s going on between a millionaire’s ears to separate them from the pack in The Millionaire Mind. This week I read The Millionaire Mind.

So back to my question. Who are they? The introduction covers that well enough. I’ll just pull a few quotes.

  • I am a fifty-four-year-old male. I have been married to the same woman for twenty-eight years.
  • We live in fine homes in quality neighborhoods, but only 2 percent of us inherited all or any part of our homes and property.
  • Some of us have inherited a portion of our wealth…61 percent of us never received any inheritance, financial gifts or income from an estate or trust.
  • 97% are homeowners
  • …with small outstanding mortgages
  • Nearly 50 percent of our wives do not work koutside of the home.
  • 90 percent of us are collage graduates.
  • Many of us play golf and/or tennis on a regular basis. In fact, there is a strong correlation between golf and level of net worth.
  • We became rich without compromising our integrity. In fact, we credit our integrity with significantly contributing to our success.

I’m pulling just a few examples from a lengthy list but I want to focus on three ideas: Marriage, mortgage and faith. I simply don’t have time to cover the book in depth today. I STRONGLY encourage you to read both this and the previous book, The Millionaire Next Door. Julie and I first read them in 2002 or 2003 and they made a big impact. Reading them again later we find them to be even more impactful…the path ahead is more clear now.

Marriage:

Millionaires do everything differently including how they pick spouses. There is a joking quote in the book that says,

Given the choice, I prefer to be physically attracted to a woman who is intelligent, honest, unselfish, well-adjusted…

So there you go. He breaks it down into qualities that lead to a successful marriage according to millionaires:

  • Honest
  • Responsible
  • Loving
  • Capable
  • Supportive

These words describe my wife well…not that my 18-year-old self had a clue what he was doing. But those are words that describe “spouses”. How did they describe potential mates?

  • Intelligent
  • Sincere
  • Cheerful
  • Reliable
  • Affectionate

Again, Julie.

But what’s not in that list? Measurements? Muscles? Money? Nope. So what if you married for money, muscles or measurements and find your marriage to be lacking in cheer, affection and honesty? You might try to become the embodiment of the attributes listed above.

The author goes on to cite research into “normal” marriages.

Dr. Tucker also found that, overall, both men and women would contemplate divorcing a spouse who lost his or her job!

Compare that to story after story of entrepreneurs who listed failure after failure, firing after firing, flop after flop. A whole series of examples of couples saving up, stepping into the unknown, getting their butts kicked by life, dusting each other off and trying again, ultimately succeeding.

I’m moving pretty fast here but Julie and I have been through the grinder and she has always been my biggest fan…even when I’m ready to give up. If we ever accomplish anything together it is because of her. And this book points out the significance of her contribution.

Mortgage:

It’s amazing to read the details on the kinds of homes Millionaires typically owned in 1996. 5 bedroom homes. Nothing huge or opulent. Just a house. But a house that is worth $1.4 million in 1996? Surely there are better deals out there.

Most of us have mortgages, but 40 percent have no mortgage at all. Less than 5 percent of us have an outstanding mortgage balance of $1 million or more. Only about one in three (34 percent) of us have a mortgage balance outstanding of $300,000 or more.

Read that again.

Most of us enjoy living in well-established neighborhoods. There is nothing flashy or even modern about the style of houses in these neighborhoods. Our homes give us away – for the most part they are conservative in style, like our lifestyles.

I have TONS of people in my life who try to borrow 120% of a property’s value so they can lever up their way to wealth. But that’s not what the millionaires detailed in this book did. They were wealthy before they bought. And they bought something that would add to their wealth at a time when they could get a deal. Let me quote a little more from the book. He is narrating with a typical millionaire respondant’s voice:

I purchased my home about twelve years ago, and my family has lived there ever since. The approximate purchase price was just under $560,000. According to conservative estimates, it would sell today for just under $1.4 million.

Compare that to a recent conversation I had with a friend who had borrowed from his 401k to make the downpayment on a home he could just barely afford saying, “You should always buy as much house as you can, right?” I really don’t think so. Dude, you borrowed from your retirement so you could have a big house today. That’s not what the millionaires detailed in this book did. They bought high-quality but distressed properties when sellers greatly outnumbered buyers…and they probably bought them from people like you.

But let’s not talk about suburban palaces. Let’s talk about farms. I mean, this is a farm blog, right? How much money COULD I borrow? I don’t know. I don’t want to know. I have a mortgage that is, according to this book, too large compared to my total net worth. What I need is a return on my investment from this farm. I started small. We grew a little. But before we grow any more we need a cash-generating machine to push us onward, not low interest rates. And I think that’s the lesson here. Produce before you consume.

Faith

In the chapter The Realtionship Between Courage and Wealth the author includes a few points about religious faith. He kicks things off early on by talking about overcoming fear. Let me tell you, I know a little bit about fear. I know a little bit about failure too. But I am not afraid. And I am not a failure. These are things millionaires have to remind themselves regularly. They have to build up some level of confidence and courage over time, daily reminding themselves of the truth. Every day I have to remind myself of the truth.

  • I am not an accident.
  • I was made for a purpose.
  • I am God’s workmanship.
  • Even if I fail I have value.
  • I am loved. No matter what.

But what if you were never taught those truths? The book indicates that you will be less likely to accumulate wealth. In fact, there is a positive correlation between faith and higher wealth.

I don’t like to be preachy so I’ll stop with one more quote. One I tell myself often.

I know the plans I have for you, says the Lord. Plans to prosper you and not to harm you. Plans to give you hope and a future.

Is this a book about farming? No. But this is certainly a book about the majority of farmers I have met. Hard working and frugal with enduring marriages. They struggled together and built wealth over time and, as noted in the book:

There is a strong correlation between net worth and the proportion of one’s wealth that is invested in real estate.

Be sure to read that correctly. He said “wealth” not “debt”. You can’t farm in debt. That’s why I have a job in town.

I think there is a lot of real insight into what it is like on the other side. In fact, I think the truth presented in this book makes the endpoint approachable. The majority of millionaires didn’t inherit money, they didn’t necessarily get top grades in school, they aren’t the best looking people. But they are careful in choosing their spouse and they make that relationship last. They know the difference between risk and opportunity, between wealth and debt. And they appear to be fulfilling their role in creation.

These are goals I can work toward.

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5 thoughts on “Marriage, Mortgage and Faith…Reading Journal Week 34

  1. I’m curious about millionaires that “get it” later in life. Those people that go through difficulties and change how they live for the last 25-30 years of their lives. Where do these people end up on the scale?

    • That may be covered in Stanley’s works but I think the answer has less to do with age and more to do with starting. He makes it a point to say that business owners are better off than the rest.

      You have to be young and foolish before you can be older and less foolish. The point isn’t age. It’s being less foolish. Get started.

  2. We are doing everything we can to build our farm (infrastructure, home, workshop, etc…) and accumulate the tools we need while my husband has his town job so that when we do move to the farm and start farming fulltime we will not have a mortgage or carry any debt. I think because we are starting this endeavor later in life and have managed to not carry any debt other than our current home mortgage, we are able to do it this way. We pay as we go. Having been on the other end of this spectrum in my first marriage – I will never go back to carrying debt EVER. My husband and I are lucky that we both have this discipline – it’s hard on a marriage when you don’t spend – or rather save well with one another.
    Very thoughtful post. It’s funny – my first husband had The Millionaire Next Door, but I doubt he read it, or if he did, he certainly didn’t get it. He juggled debt and real estate like crazy -always on the edge.
    You’ve inspired me to pick up both books and read them – not that I aspire to be a millionaire. I’m happy to be [working towards] doing what I love with the man of my dreams and being debt free.

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