Money: Being vs Acting Rich
Monday October 19, 2015

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“More people look richer than they really are, and the really rich often don’t look anything like what we think they should look like.” -Thomas J. Stanley

~The Simple Sophisticate, episode #66

Perception versus reality. The primary goal of someone working in public relations is to present an exterior that will prompt a desired result: sales, confidence, change, movement, acceptance, etc. But as those who have been behind the scenes know, just because an image is given to us of what “rich” looks like doesn’t mean it is so.

The multi-million dollar contracts signed by Adonis-esque athletes, the many homes owned by starlets as well as the celebrity endorsed products seen ad-nauseum don’t guarantee or demonstrate the truth behind what being financially rich actually is.

Thomas J. Stanley in his 2009 book Stop Acting Rich: And Start Living Like a Real Millionaire, enumerates the many ways those of us who  might desire to be rich are misled to believe what rich actually is.


  1. An expensive, well-located, spacious home
  2. Owning a Rolex
  3. Driving a BMW
  4. A stocked wine cellar
  5. Top designer clothing
  6. Owning a vacation home
  7. Have hired help

In reality, those who are actually rich generally defy the entire list mentioned above. Stanley points out that the image of “rich” presented by the media, advertisers and celebrities themselves (perhaps that are endorsed by the brands they don unbeknownst to the onlooker) misrepresent the truth of what it takes to truly become rich.

So what is the definition of rich? In Stanley’s first book The Millionaire Next Doorthe numerical goal of net assets is approximately $350,000. Regardless of where those assets are coming from, if one has not attained this dollar amount, they are not a true millionaire.

Upon reading this equation, it was in many ways a relief. Why? Because for many, the idea of owning a house is described as the only way to become financially security, but as we saw in the Great Recession, many took a financial face-plant because of their real estate choices. This is not to say real estate is a bad financial decision. In fact, it is usually a very good idea in the long run, but the key is to understand there are many routes to attaining the label of rich, or a secure financial life. However you are able to attain the $350,000 will be dependent on your career, talents, goals, locale, etc. And most importantly, it will take time.

With that said, let’s take a look at the many ways you can actually become rich:

1. Become Well Educated

Ninety percent of millionaires who were happy in their lives had graduated from college, 62% had graduated from graduate or professional school and only 19% were in the top 5% of their class. The key to making sound life decisions not only

in finance, but in general, is to become savvy about what you will be doing for your career as that will be your foundation. Being at the top is not necessary, but it is clear that wisdom when applied makes a tremendous difference.

2. Have Patience

It takes time to accrue wealth. Stanley interviewed Baby Boomers in their mid-fifties who were millionaires and as many of them began investing in their mid-twenties, it was evident that the $350K mark did not happen overnight, but rather over decades of smart decision-making.

3. Make More Than You Spend

Another commonality was millionaires lived in a smaller or less expensive house than they could afford and refrained from buying status symbol items such as vehicles, watches, and clothing. Did it mean they were Scrooges? No, they had nice clothing, but they were smart, thoughtful purchases as I will talk about in #8.

4. Don’t Depend on an Inheritance

Only 12% of the millionaires in Stanley’s study inherited any money from relatives as their means to achieving wealth. In fact, those who received inheritance were less likely to grow their money or maintain a millionaire status.

5. Invest in Real Estate, but Purchase Less Than You Can Afford

As mentioned in #2, most millionaires bought their first house at the age of 26, but they don’t still live in this home and they tend to purchase less than what their income allows. Not only does this aid in one’s health and therefore overall happiness due to the stress alleviated, it also frees up money to be invested elsewhere or invest in experiences to grow as an individual.

6. Don’t Live in the Most Expensive Neighborhood

While location is key in real estate, investing in a neighborhood purely to maintain appearances regardless of how much it will cost will do you no favors in the long-run as you save and invest for your financial security. In fact, Stanley found that most millionaires were better off than their neighbors based on where they chose to live.

7. Be Generous

Sixty percent of happy millionaires were found to give to charitable causes while only 38% of unsatisfied millionaires did the same. While the reasons may be wide and vast, helping and giving when we can is easier when we make more than we spend on necessary expenditures and overall leaves us feeling more connected to our community and those we love.

8. Make Smart Purchases

Are wearing Manolo Blahniks off the table if we want to become rich? It depends. A frugal shopper who appreciates quality over quantity can purchase a pair of Manolo’s and wear them for years, or perhaps find them in a consignment shop. It is the person who believes they must have designer everything and pay full price as well. Part of the mission of living simply luxuriously is not to feel deprived, but instead to live intelligently. You know what you need, you know how much you can afford and you are the savvy shopper who knows how to get what they want at the best price.

9. Reconsider the Second Home or Extra Recreational Anything

Stanley shares a long list of experiences and activities that deca-millionaires spend their money on versus buying a second home, a boat, or expensive labels in watches, wines, cars and the like. Here is just a taste: gardening, vacationing in Paris (I kid you not), visiting museums, attending Broadway plays, jogging, attending lectures, socializing with loved ones, raising money for charities, participating in civic activities, studying art, golfing and this is just a start. In other words, as Stanley states, “You cannot be in two places at one time” so why spend your money unnecessarily on two mortgages or paying down debt you don’t need to thrive?

10. Refuse to Fall Prey to the Newest Model

In 1927, Stanley shares General Motors began to realize a winning sales strategy: produce new models of the same car each season as “people will pay big bucks for cars that symbolize wealth and status”. Whether it’s the latest Apple iPhone model or the new 2016 model of the car you are currently driving, new doesn’t necessarily mean better. So long as you purchase a quality vehicle, care for it properly, there is no need to invest every time a new edition is revealed.

11. Cultivate Self-Esteem

One of the careers that predominantly acquires millionaires in its field of expertise is engineers. In particular, Stanley observes one such engineer (Tom) and what he reveals is significant. Rather than seeking out expensive automobiles or items that project the image of wealth, he drives a Honda Civic. Why? Tom is focused on value and quality rather than showmanship. The career achievements he has attained have played a significant role in his high self-esteem, and he need not seek out external validation.

12. Invest in Quality 

Bottom line: purchase the best quality product necessarily to complete the task effectively. Whether it is a pair of jeans that cost $200, but will last for 10 years or a Honda Civic that will run smoothly and efficiently for 10 years or more, if it gets the job done, let go of worrying about the audience. If they applaud, okay. But if they do not, you will be financially secure and still be stylish and arriving safe at work each and every day.

While the goal of our lives is not to become rich, it is what becoming rich allows. I have always strived to be financially secure and independently so as it affords me the ability to dictate my future. As much as I wish I could have been über financially secure when I was in my twenties, I have realized that it is a gradual process and the key is to make savvy decisions, take educated risks and consult those who know better than us along the way.

“But the values and work habits of millionaires, like the roots of the oak, are what support their lifestyles (the leaves), not the other way around. ” -Thomas J. Stanley


~10 Ways to Strengthen Self-Worth

~Confidence: How to Gain It & Why It’s Invaluable

Petit Plaisir:

~French Chic Living: Simple Ways to Make Your Home Beautiful by  Florence de Dampierre

~Visit her website and blog here.


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13 thoughts on “Money: Being vs Acting Rich

  1. I love this. My husband and I have always tried to never fit in. My husband has a very high paying job and we do not the trappings of wealth. We live in a very small house of 125q m with a small garden. My grandfather gave us the advice of never purchasing a home over 60% of the amount the bank offered. Our soft furnishings are all home made and if we can’t purchase what we would need we make it. Our holidays are modest normally walking and never at the beach. We do have a very expensive car but that is our only extravagant purchase. We make do and mend with everything that we can. We love living well with no worries. Being rich to us is so much more than our bank account its about the quality of life.

  2. I loved this podcast Shannon! I love all your podcast, but I loved this one so much I shared it on a finance forum that I am apart of. I read the Millionaire Next Door years ago and you summarised it so beautifully.

    I think that it is really important to cultivate self-esteem and have a clear vision of what we would like to be, rather than let the media, peers and our surrounding environment dictate to us what our lives ought to be. Truly wealthy people are like black sheep, they never follow the crowd.

    I enjoy your reading your blog with a cup of coffee, a petite four and a Diptique Candle burning in the background! Thanks for creating your blog The Simply Luxurious Life and introducing us to simple pleasures!

  3. What a great post! My husband and I make a very nice salary allowing us the luxury of not having to worry about money. That being said, we have a modest house, drive economy cars and live well below our means. Not having the stress of money allows us to live an extravagant life for sure!

  4. ” Invest in experiences to grow as an individual.” Traveling, reading, enjoying best quality food, exercising, dressing well, being yourself, and the most important part of being rich is sharing all the above activities and spending quality time with your love ones. Being rich is amazing.

    We are profoundly blessed.

    Blessings on you, Shannon! And thank you for sharing such wise insights.

  5. Completely agree. I used to live the former life, always trying to have and be the best but struggled with money. Now, we live well below our means, save and invest, and the desire for everything has waned. The peace you find in knowing you can buy what you want but now realize you don’t need to spend for it, is a greater gift than any material thing. We live in a small, well-cared for lovely home and truly enjoy our blessings.

  6. I agree with all of that but I do drive a BMW. Purchased my car new and fully loaded with exactly what I wanted on and in the car with having to wait many months for the car. But for me it was worth my money to do so. Nothing drives like a BMW and I keep my cars for 12-14 years. So for me, it was purchasing quality that I know I will use for a very long time. I went into the dealer knowing what the car should cost, got a respectable price, paid on the car loan for two years to add to my excellent credit rating and now putting my car payment into savings.

    I do live paycheck to paycheck mentality but off the top 10% goes into retirement. Then with net pay, every penny is budgeted so if I run out of money for eating out, fun spending, etc then that is it until the next paycheck.

    A good thrift store is really a boon! Have found clothes, shoes and purses never used at amazing prices. Coach purse never used which would have sold for over $300, I purchased for $100. Just purchased Ecco leather shoes never worn for $11

  7. Shannon – I couldn’t agree with you more! I would much rather have the freedom to pursue my passions than owning a lot of things that take time and money to maintain. It’s all about choices and what is most important to you. 🙂

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