Review of: The Middle-Class Millionaire
The Middle-Class Millionaire The Rise of the New Rich and How They Are Changing America by Russ Alan Prince and Lewis Schiff copyright 2008 published by Doubleday a division of Random House, Inc New York
The author’s theorize (based on a survey) that there is a group of people with middle class values but with more than middle class amounts of money (Middle-Class Millionaires).
Middle-Class Millionaires are defined as those with net worth between 1 million and 10 million including their primary house and having made the wealth themselves. Middle class members, on the other hand, are defined in the book as: heads of households with annual household incomes between 50k and 80k and a net worth under 1 million.
They define millionaire intelligence as having the traits of being:
- Always on – middle class members believe in virtue of hard work. Millionaires work an average of 70 hours a week v.s. 41 hours a week for middle class members. Millionaires value their time and are willing to pay to manage it well.
- Networked – knowing many people and having reciprocal relationships with them is very important to Millionaires
- Never giving up – Millionaires are more persistent than middle class, they were 5 times more likely than the middle class members to try something again in the same field. Both groups thought perseverance is important but the Millionaires act on the belief more than the middle class members.
- Going where the money is:
- Millionaires take an ownership stake in their business. They consciously put themselves in the flow of money (options, commissions, choices as to occupations, doing what it takes to succeed -even if you step on others doing it). Millionaires feel that work is more enjoyable when you are pursuing it for your own profit.
The authors state that their survey showed:
- Millionaires place higher value on being financially independent than middle class members.
- The Millionaires more closely resemble the middle class members on a lot of family centric values, but more closely resemble the ultra wealthy on financial, career and personal success values.
- Middle-Class Millionaires earn their high income through devotion to a career. They like to maximize earnings.
- They hold the same values and priories as the middle class members, but the focus on them is stronger and more consistent among the Millionaires.
- These folks choose their career based on the financial rewards, not on what they enjoy doing. They tap into the money flow at their work (stock options – anything to get an owership stake).
- They concentrate their efforts on one moneymaking efforts rather than diversifying the ways they make money. They tend to work longer hours on their focused area than the middle class members.
- They focus on winning, it is important to get the best deal, to come out on top of negotiations, etc. They look out for themselves and take advantage of others when necessary.
- They choose projects with greater risk, greater reward. They want to hedge their risk by using other peoples money, etc.
- They fail twice as often as middle class members and view failures as opportunities to learn.
- They network to gain advantage to themselves in their career or finances.
- They hire coaches to help them get ahead in their financial and work lives.
Read this book to understand and address:
- What a Middle-Class Millionaire is
- Specific examples of Millionaire’s influencing the development of products or services for the middle-class members
- Results of the survey the authors did
- Characteristics of high-net-worth individuals having middle class value systems.
What I liked:
- Specific examples using real people
- Discussion of survey methodology and individual results
What I wished for:
- Fewer pages discussing a particular housing development in California
- Less focus on individual examples of ‘Influence of affluence’ and more hard facts to support it
“These 8.4 million households make up a new generation of millionaires who began to emerge from the middle class in the late twentieth century. Overwhelmingly, these millionaire households are headed by people raised in ordinary middle class homes. …..Now through the influence of their affluence, this group is helping to bring about momentous changes throughout American society.” p9
“The….working rich are different from the broader the middle class. They are uniquely achievement oriented. They tend to be high earning and big spending. Through their lifestyle choices and spending decisions, they wield influence in the overall economy in support of the same middle class values and concerns they were raised with: security, health, self-betterment, family and community.” p 9
“Our survey results illustrate the old saying that few things are more important in the pursuit of success than perseverance…..The Middle-Class Millionaires were far less likely than the middle class to take failure as a signal that they should try something else.” p34
‘Middle-Class Millionaires are deeply rooted emotionally in the middle class values they assumed during childhood, but on the other hand, they are equipped with attitudes toward career and personal success that far more closely resemble those of high-net-worth individuals.” p60