Bill’s Blog | February 16, 2023
I read “The Millionaire Next Door” by Thomas Stanley & William Danko over 25 years ago and found it fascinating and insightful. The researchers gained insights by interviewing many successful millionaires and sharing their habits. In reviewing the book’s key points, they are still as relevant today as when first published in 1996. I highly recommend you read this book.
Today, I will share personal observations and statistics in Canada and highlight seven essential factors that create long-term wealth and closing thoughts.
- Less than 3% of Canadians have 2M or more in assets. (approximately 780,000 people)
- The majority of Canadians’ wealth is in their home. Many Boomers will either sell/downsize or turn their homes into cash-flowing properties to sustain their desired lifestyle.
- In Canada, business ownership, high-paying careers and careful stewardship are the primary paths to building sizable wealth.
- It takes a lifetime to build sustainable wealth.
- Just as important as building wealth, it is critical not to take huge losses on the journey. The key is to protect your wealth through multiple strategies and have proper diversification.
- Most millionaires will make one or two big mistakes over their journey. Many will learn from their mistakes and not repeat them.
- Privileged kids often lose their parent’s wealth, as they are unwilling to put in their parent’s hard work, limit spending and apply financial discipline.
- The majority of people are not willing to learn the fundamentals of how to build wealth. Yet, education is critical to building wealth. Consider taking my course if you are serious about learning the wealth fundamentals and disciplines necessary to grow long-term wealth.
- The uneducated sadly fall into the Debt-Trap, and seldom escape.
Seven Factors to Build Wealth:
- They live well below their means. They consistently save 20% or more of their money and then wisely invest.
- They allocate their time, energy and money efficiently in ways conducive to building wealth.
- They believe that financial independence is more important than displaying high social status.
- Their parents did not provide economic care-patients (spoiling or enabling children).
- They teach their children to be economically self-sufficient.
- They are proficient in targeting niche markets and quality opportunities. They create value in the marketplace.
- They chose the right occupation/career.
Here are some other notable and quality characteristics of wealthy people.
- They live purposeful lives.
- They are well-adjusted with their wealth, are more charitable, and love giving back. Often will mentor young people.
- Creating wealth is a mindset accompanied by principles, strategies and disciplines.
- Often the wealthy will choose practicality or luxury.
- When money is your goal, you will never have enough.
- Avoid the false premise: “Fake it till you make it.”
- True wealth is far more than money. It includes faith, family, friends, health, giving back and living out your WHY. What is your why?
In closing, it is becoming harder to create wealth due to the rising cost of living, bad government and central bank policies. The Debt-Trap is a BIG problem: Student debt, credit cards and having no savings. One of the greatest gifts you can give yourself and those you love is to become financially savvy. If you are willing to increase your financial IQ, you will make superior choices with your money and have a good chance of creating long-term wealth! Remember, financial education is a lifelong process, not just reading one book or taking one course.
PS. For those who would like to learn about the Energy Sector and investment opportunities, I will host a webinar with top analyst Josef Schachter of the Schachter Energy Report. So put March 18 at 10 AM PST on your calendar for a very informative webinar on the New Energy Supercycle. Webinar 45 minutes with Q & A to follow. I will provide more details and a Webinar sign-up in the next couple of weeks.
All the best in 2023,
Bill Westmacott, Owner & Educator