Summary of the Millionaire Next Door by Readtrepreneur Publishing

Author:Readtrepreneur Publishing
Language: eng
Format: epub
Tags: millionaire next door surprising secrets america's, richest man babylon george s clason rich dad poor, what teach their kids about money do not simple, path wealth your road map financial independence, rich free life money 9 steps transforming, new google e non fiction guide grit of for kids, summary 2019 2020 top book books paperback online
Publisher: Readtrepreneur Publishing
Published: 2018-06-10T00:00:00+00:00

From all these data, the authors have concluded that most vehicle buyers in America are not the affluent members of society. Moreover, the typical millionaires have a similar buying pattern which revolves around frugality. This stems from the belief that being frugal is the key to achieving financial independence, and that there are various benefits towards this independence.

Chapter 5: Economic Outpatient Care

Economic Outpatient Care, abbreviated as EOC, was coined by the authors to describe parents who provide their children with monetary gifts even when the latter have already reached adulthood. In fact, some of these parents shoulder the tuition fees of their grandchildren. What effect does this have on their children? Do they become more productive adults? Do they become successful entrepreneurs?

The authors share the story of Mary and Lamar, a couple in their 50s who enjoy living luxuriously. They are country club members who drive luxury cars, wear fine clothing and jewelry, and enjoy gourmet food and vintage wines. To top it off, they frequently fly to foreign places to spend their vacation. However, despite this lifestyle, they are in desperate need of money.

You see, Lamar is an administrator in a local college with an annual income less than $60,000.00. Mary, on the other hand, is a housewife. With this meager income, how can they possibly afford such an expensive lifestyle?

Their lifestyle has nothing to do with budgeting and planning. It is later on revealed that Mary has been receiving cash gifts from her parents since she was married to Lamar. Her mother also took it upon herself to provide them with a generous loan to buy a nice house in an upscale neighborhood. She even offered to pay for the tuition fees of her grandchildren so that they could attend prestigious private schools in the area.

This is a typical example of a parent who provides her children with EOC. The study reveals that parents who are distributors of EOC are the ones who successfully accumulated wealth early on in their lives. Although they lived a life of frugality in terms of consumption, they were not as stingy when it comes to providing for their children. In fact, they feel obligated to provide this economic support not just for their children, but for their families as well.

These distributors of EOC believe that their children could not maintain a high consumption lifestyle without their help. What’s interesting is how common this behavior is in America. Study shows that more than 46 percent of the affluent class in the country give at least $15,000.00 annually to their adult children. Most of these children are under thirty-five years of age because the incidence of EOC giving declines as their child ages.

Additionally, these EOC distributors are concerned with the fact that the government can take around 55 percent of tax on their estate. As a result, they increase the size of what they can give to their children so that the tax burden on their estates would decrease.

The study also reveals that this behavior is more common among mothers.

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