The month of May, across the country, is filled with one graduation ceremony after another. From Kindergarteners to Ph.D. candidates celebrations are taking place to congratulate the graduates for their hard-work and to wish them well on their future. Even if you won't be putting on a robe and mortar board this May, make this month your graduation out of debt and into financial independence!
If I were to suggest that we all could become financially wealthy in our lifetime, would you believe me? As hard as it is to believe, especially during the economic situation our country is currently in, we all have the power to achieve financial independence. And the way to achieve it is really quite simple. It is a matter of simply living within our means.
A book written a few years ago highlighted this very point. Thomas Stanley and William Danko wrote "The Millionaire Next Door" based on decades of data gathered surrounding the rich. Their research was the most comprehensive ever conducted on who the wealthy are in America and how they got that way. And what they found within their research astounded them.
The authors found that the large majority of millionaires are not the descendants of the Rockefellers or Vanderbilts. The large majority of millionaires in this country are ordinary people who have accumulated their wealth in one generation. They did it slowly, steadily, without signing a multimillion-dollar contract with the Royals, without winning the lottery, without becoming the next Tom Hanks. Windfalls make great headlines, but such occurrences are rare. In the course of an adult's lifetime, the probability of becoming wealthy via such paths is lower than one in 4,000.
So who are these millionaires? They are business person who have lived in the same place their entire adult lives. They are well educated and know how to work hard. They marry….and remain married. They live next door to people with a fraction of their wealth. They are compulsive savers and investors. They have made their money on their own. They shop at Sears and drive Fords. They know the difference between a want and a need. They are always looking for a bargain, and never rely on credit. They possess a spirit of generosity. They believe the best things in life are free. They live below their means.
The question is not necessarily "How much money can I earn"? The question is "How much money can I save?" Most of us tend to spend what we have. The more we make….the more we spend. We never seem to get ahead.
From my first day as Kansas State Treasurer I have encouraged Kansans to take control of their finances - to stop allowing their finances to control them. In these economic times when families are spending more and more on food and gas and seeing less and less in their bank accounts, now is the perfect time take control.
The ideas and facts presented in "The Millionaire Next Door" give me great hope for all Kansans. Accumulating and maintaining great financial wealth is an attainable goal. During this time of high school and college graduations make this May your graduation to financial independence! Make the commitment to be your neighbor's millionaire next door - not only for yourself but your children, grandchildren and great-grandchildren.
