The book is supposed to stand out because it is an empirical studies of the millionaires in U.S. However, the tips to being rich is almost common sense and against the norm of which define wealthy.
Millionaire is not defined as reaching the 6 figure sum, but that your total asset value is to be higher than that expected of those of the same age group and educational level. In that sense, it is not really being rich per say.
One big central theme of the book is to never spend beyond your means, and not live the high life. Then I am left thinking why the hell do you want to be rich. I suppose I am one of those influenced by the consumer wave of our period! :)
Things to do for finance:
- Begin earning and investing early in your adult life.
- 15% of pretax income into some form of investment
- Minimise your taxable income, maximise your non taxable income.
- Rent in Singapore is taxable. Stocks are not taxable
Tips for Finance:
- Poor people hold at least 20 percent of total wealth in cash/near cash
Even consider saving accounts as investment.
Rich people invest in category that appreciate in value but do not produce realised income.
- A person debt to service ratio should not be more than 35% of disposable income.
- Rule of 72: allows u to find out number of years it takes to double your investment simply by dividing 72 by the potential investment return.
- Buy second hand car - where the value has already depreciated rapidly.
- If u want to be wealthy someday, never purchase a home that requires a mortgage that is more than twice your household total annual realized income
- The millionaires are often inactive traders of stocks as well. Most have no trading done within a year.