The Quiet Millionaire: Part 1 – What is Important about Money to You?
You’ve heard of The Millionaire Next Door (see Nora’s post on this book), now there’s The Quiet Millionaire. Whereas Next Door considers the mindset of the millionaire, Quiet offers practical advice on building and preserving wealth, beginning with an exploration of your life goals, reasons that money is important to you, and your possible motivations for desiring wealth. Its author is Brett Wilder, a Certified Financial Planner and President/CEO of Financial Management Group, Inc., a fee-only financial management and investment advisory firm. Through Wise Bread, I’ve been given a copy of the book so that I can give you an idea of what it has to offer.
Topics for most chapters are straightforward and cover issues such as borrowing intelligently, winning at investments, and making college affordable. In the first chapter, however, Mr. Wilder builds the platform for helping you make financial decisions and provides guidance on defining what is truly important; he proposes that
Money is the fuel for achieving your life goals and objectives.
He also suggests that each of us have a money personality and specific reasons that money is important, such as:
- Security (you may fear being impoverished, which is motivating to save but may lead you to be too risk adverse)
- Freedom (you have enough money to live the way you choose and work with enthusiasm)
- Gaining Love (you feel that money helps you to attract persons who will love you)
- Respect (you associate having money with being respected)
- Power (you want to influence people with the power that money can bring)
- Happiness (you enjoy the experiences and items that money can buy)
- Self-worth (you equate self worth with net worth)
- Accomplishment (you consider wealth a measure of success)
- Entitlement (you feel deserving of money because you have endured years of struggling without money)
- Helping others (you want to use your money to help others, possibly because you have been helped yourself)
Mr. Wilder recommends exercises to detect what drives you the most:
The objective is to discover what you really feel and truly believe is important about money to you in order to understand the reasons behind your earning, saving, and spending activities, which can be financially healthy or unhealthy and may require adjustments to be made.
I enjoyed the “building block” method, which might go like this:
Q. What is important about money to you?
A. Security. I like the security that money can bring.
Q. Why do you like security?
A. Because once I am secure, then I can focus on the things that are important.
Q. What are the things that are important to you?
A. Being able to pursue work that is meaningful, being able to spend time with my family, being able take part in activities that are rewarding to me.
Q. What about money allows you to do those things?
A. Enough money will give me freedom with my time.
It’s up to you to decide whether your reasons for wanting money are valid or not, and if you need to reshape your approach to money. (For further insight, read what Wise Bread writers and readers had to say in What Did Your Parents Teach You About Money?) While you’re pondering money motivations, I’ll be reading The Quiet Millionaire and sharing strategies (in future posts) for saving, investing, and protecting wealth so that you can realize your dreams.