The Tycoon Report

It's Not Too Late to Adopt a Millionaire's Mindset

Friday, November 13, 2009 | Ethan Roberts

I was traveling last week, near an area where an old friend of mine lives.  So I called him to see if there was a chance of meeting for lunch. 

After the usual "How ya doing, dude?" opening, the first question he asked me, but with a real surly tone in his voice, was, "SO, HOW MANY HOUSES YOU GOT NOW?"

Maybe You Know This Guy, or Someone Like Him

Now, I'm used to him asking me this question, as it seems to be one of his favorites going back over the last dozen years or so.

My response is to simply answer him truthfully, and in a matter-of-fact way.  I certainly wasn't bragging about it, and for sure I wasn't the one who raised the subject.

But I'm not going to lie and minimize the answer, just so he will feel better!

Now my friend has been fairly successful in the insurance industry for many years.  I also know that he has been nurturing a 401(k) for many years, but I don't ask him how much he's accumulated in there. 

In fact, many years ago, I helped him to set it up, when he barely knew what the word "mutual fund" meant.

Wealth-Building 101: A Critical, Yet Absent, Curriculum

It's ironic. Despite having a master's degree, he was never taught anything about building financial wealth in any of the schools he attended. 

And these days, our schools are so busy giving trophies to the last-place team, and teaching kids that it's not fair for one child to have more jellybeans than the next, that the chances of any of them learning about how to become wealthy are slim-to-none.

My friend's sardonic attitude toward my properties is fairly common in our society. 

In America today, we have a bad case of "Wealth Envy." fostered by the media and hypocritical rich politicians who buy votes by talking about taxing the rich, as if the rich are lepers who should be punished. 

And if it doesn't stop soon, we are going to wake up one day and find that the U.S. has become a banana republic.

So what's wrong with trying to become wealthy?  Why do we have this image that everyone who becomes rich is like Ebenezer Scrooge, throwing old ladies out of their homes and into the street on a freezing-cold night in the dead of winter?

The truth is, many of the wealthiest individuals in the U.S. are also the most-philanthropic.  It has been widely reported in the media that Bill Gates and Warren Buffett, among others, have been tremendously generous in giving to various charitable foundations. 

In fact, Bill Gates has said that he will leave a good portion of his $58 billion fortune to the Bill and Melinda Gates Foundation (a charity that he created), rather than to his children.  This foundation has already given away over $10 billion to education and global health initiatives, including immunizations and AIDS research.

But there are probably people who feel that he should do more.  Maybe they want him to just give away all of his money, and start a business once again out of his garage, like he and Paul Allen did way back in 1975.



So, what is wealth envy all about?  What makes our friends and relatives give us mal occhio (i.e., the "evil eye" or "stink-eye") because we buy a new house or take an expensive vacation? 

Do you remember that episode of "Seinfeld" when Jerry bought his dad a new Cadillac and all the neighbors then accused the father of stealing from the home-owners' association to buy the car?

Neal Boortz, radio talk show host and co-author of "The Fair Tax Book," had this to say about wealth envy:


However, much of the remainder of what he says is valid.  We make decisions every day of our lives that either move us forward financially or hold us back. 

I'm speaking of decisions like whether to be lazy or bust your butt ... to invest your money or to max out your credit cards on frivolous things ... whether to take that night class that could help your career, or to be a couch potato instead.



The Case for Real Estate Investing

What my friend doesn't think about when he snipes at me for owning so many homes, is all the time and hard work that I've put into those properties. 

He wasn't with me on the days when I was out in the 93-degree Florida sun -- painting a house, shoveling fill dirt onto an exposed foundation, mowing the lawn, or pressure-washing a driveway so my property would rent or sell quicker. 

My friend likes to buy new cars every four or five years.  By contrast, I drive an older car that still runs well, and I prefer to spend my money on newer homes in foreclosure that are 40%-50% cheaper than when they were built. 

In 15 years, his new car will be rotting on the clunker pile, while my homes will still be generating monthly income for me.  Sure, I don't get the enjoyment of the new-car smell and all the electronic gadgets, but you also won't find me "still working for the man" at age 65 or 70.  We all make our choices in life.

Maybe he doesn't remember the time I pleaded with him in early 2000 to buy investment properties that would have increased his net worth considerably.  Or maybe he does remember, and he's mad at himself for not having done so!

Get into the Millionaire Mindset

By the way, I tell people this all the time.  If you really want to become wealthy, it isn't really that difficult.  Start by reading two simple books, "The Automatic Millionaire" by David Bach, and "The Millionaire Next Door" by Thomas J. Stanley and William D. Danko.

Bach teaches the same concepts as Neal Boortz; he just says them in a nicer way.  He tells people to live frugally, to eliminate their consumer debt, and to put themselves on an automatic plan to pay themselves first, before they pay or buy anything else, each and every month. 

It's not rocket science; it's just stuff that we don't like to do!

"The Millionaire Next Door" is an interesting, if somewhat dry, book that summarizes the authors' research into the key characteristics of ordinary people, just like you and me, who have become wealthy over time. 

And what you read in that book may just turn everything you ever believed about rich people upside-down.

Very few millionaires today were born with a silver spoon in their mouths.  The largest percentage worked hard to get where they are, created something that worked well, or provided numerous jobs to people, as they built a successful business.


That's the part that people, like my friend, forget when they knock people who have accumulated any wealth for themselves.

So I forgive my friend for his disdain of my real estate.  We've been friends far too long for that to come between us.  I'll just kick his butt on the golf course when I see him next!

Now, I know that most of the people who read The Tycoon Report do so because they want to learn how to increase their wealth.  And that's a great plan, too! 

So, the lesson is clear.  If you want to become wealthy, stop envying what the rich have and start emulating what they did to get there!

Now let me hear from you, Tycoon readers.  Have you been the victim of wealth envy by YOUR friends, relatives or neighbors, or do you find yourself being envious of the rich at times? 
See you next week!





Ethan Roberts
Contributing Editor
The Tycoon Report