Getting Out of the Poorhouse
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program certainly raised eyebrows. Most of the homes depicted were in the $200,000 to under $400,000 price range. All of the millionaire next door types who lived in these neighborhoods had an investment portfolio of at least $1 million.Yet the median price they typically pay for a bottle of wine is just over $10. After the program was televised, I did a statistical analysis of my database and ultimately a profile of millionaires who live in homes currently valued at between $125,000 and $395,000. What is particularly interesting is that most of their neighbors had less than one-fifth the financial wealth that these affluent respondents had accumulated. A more detailed examination of the data brought to mind another television episode. It took place while I was promoting The Millionaire Next Door on the Oprah Winfrey Show. A rather well dressed woman from the audience asked me the same question I had heard a thousand times before: “What good does it do to have all this money if you don’t spend it?” The woman was agitated, even indignant, that I was touting frugality. She further indicated that “these people couldn’t possibly be happy.” She, like most people who are not wealthy, believed that the more one spends, the more satisfying life is. Thus, more money translates into more spending and therefore more happiness. But she does not completely understand the benefits of being wealthy. It has much more to do with being financially independent and secure than owning prestige brands. High self-esteem is related to achieving financial independence. Both the sense of achievement that comes from success and financial independence lead to happiness and life satisfaction, not meaningless badges. What percentage of the millionaires who live in homes valued at under $400,000 are happy? More than 9 in 10 (91 percent) indicate that they are extremely satisfied with life. Yet only 1 in 20 has a wine collection. Happy people tend to live well below their means. I have found this to be the case in all of the studies I have conducted. Most of the people who make up this low-profile millionaire segment never earned very high incomes. In fact, their median household annual