How to Become a Millionaire – The Simple Truth

Written by Nickel - 8 Comments

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A week or so ago, I shared some tips from Warren Buffett about how to become a millionaire. Today, I wanted to share some tips from our eight year old.

This weekend, I had an interesting financial conversation with our eight year old. This is the same kid that has an impressive knack for saving. To set the scene, we were tooling around town when the subject of cars came up…

As we pulled up to a stoplight, a particularly sweet ride rolled by. As soon as they spotted it, our kids started marveling at how nice it was, and how much it must have cost. The undertone of the conversation was that the owner must be über-rich. Never one to miss out on a teachable moment, I mentioned that stuff like that isn’t necessarily an indicator of wealth.

Taking a page from “The Millionaire Next Door,” I explained that some of the wealthiest people that they’ll ever meet are the ones that don’t flaunt it. In fact, most people probably wouldn’t even realize that these people are rich — rather, they’ll seem just like “regular” people leading a “normal” life.

This prompted our eight year old to say:

“Why doesn’t everyone just buy normal stuff? That way they could get rich. And if millionaires just bought normal stuff, then they could stay rich.”

While this is a bit of an oversimplification, I think our society could use a healthy dose of eight year old logic. In fact, if more people thought like him, we wouldn’t be talking about negative savings rates and multi-billion dollar bailouts.

Intrigued, I asked him if he wanted to be a millionaire. His response?

“Maybe someday, but not right now. If I was a millionaire, I’d probably just worry about my money all the time.”

From the mouths of babes…

Published on September 29th, 2008 - 8 Comments
Filed under: Miscellany
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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Comments (scroll down to add your own):

  1. Wow, that is one astute and precocious kid.

    Comment by Terry — Sep 29th 2008 @ 6:23 am

  2. It just goes to show, while the principles of proper money management might be difficult for some to live by, there are pretty simple to understand. If you always live below your means, you should never need to worry about money.

    Comment by RDS — Sep 29th 2008 @ 6:32 am

  3. Out of the mouth of babes comes some pretty amazing wisdom.
    My own son once asked me whether I thought it would be a good idea to have a debt / equity indicator on every car which I thought would certainly work out who owned the car rather than who was paying to drive it.
    But wait there’s more… A couple of months later he asked whether there should be a debt / equity indicator on the letterbox of every house in our street to see who really owned the house or who was simply a part owner and paying lots of interest to the bank!!!
    I guess the moral of the story is to listen to our kids. They can always teach us something if we’re prepared to listen!!

    Comment by Andee Sellman, One Sherpa — Sep 29th 2008 @ 7:18 am

  4. If I *could* live below my means that would be a miracle.

    Comment by Terry — Sep 29th 2008 @ 7:31 am

  5. Heh, smart kid! I think he’ll do well by himself once he leaves the house.

    Comment by Blaine Moore — Sep 29th 2008 @ 10:14 am

  6. that is bad a$$. perhaps McCain can use him?

    Comment by Budgets are Sexy. — Sep 29th 2008 @ 12:39 pm

  7. It’s too bad more adults don’t pay attention to smart financial instincts like your kid does! Hm.. could be he’s a future Warren Buffett in the making?

    Comment by Living Within Your Means — Sep 29th 2008 @ 8:33 pm

  8. I’ve always maintained the philosophy that in order to be good stewards of not only our money but the world’s resources, we should all be buying “normal stuff” and in moderation. The more resources we use up, the less there is for others.

    Economy is based on demand. If we demand less stuff and extravagance and demand more charitable organizations, renewable resources, etc, the world would be a much better place.

    Comment by Colombian Coffee — Oct 2nd 2008 @ 12:39 pm

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