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Want to be a Millionaire? Here's How to Think Like One

Written on September 8, 2008 by admin in Money

sale CNN Money recently asked forty people for the best advice they ever got about money. One of the people featured is Bill Nygren, the great manager of the Oakmark Select Fund.

He refers to an episode of the Johnny Carson show, where Johnny asked financial guru Andrew Tobias how someone with only $1,000 should invest it. Andrew Tobias said they should buy non-perishable items.

The crowd got quite a kick out of that answer!

Here was this great financial mind suggesting that people, with only a small amount of money, buy common, every day items instead of investing it.

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Saving money beats making money

There’s incredible wisdom in his answer. After all, whether we save money or invest it, we end up with more money. In fact, we end up with more, by saving it, because we don’t pay taxes on what we save; we only pay taxes on what we earn.

So if we save $100, we’ll be ahead by $100. If we earn $100 and we’re in the 25% tax bracket, we’ll only be ahead by $75.

Trading time for money

We all face tradeoffs. One of those is saving money by spending time or vice versa. For example, we often eat out to save time. But eating out costs more money than buying the groceries and cooking for ourselves.

Thinking like an investor, we have to ask ourselves how we’re spending that time. If it’s not productive – if it’s not saving us more money or making us more money – we might as well spend that time dining in.

Of course, it’s not just about money. We do understand quality of life! We just had to throw this in here to let you know we are human!

Weighing now vs. later

Another trade-off we have to consider is now vs. later. If we spend money today, we won’t have it tomorrow. But instead of spending it today, we could invest it. If we do that, we’ll have more money tomorrow (the original money plus whatever we earn on our investment).

Every outlay is an investment

Taking the advice Tobias gave, if I can save enough on the non-perishables I buy, it may be worth it to buy them now so I don’t have to pay more tomorrow. It’s just like investing the money now to have a greater amount later.

Millionaires get this concept

In his great book, The Millionaire Mind, Thomas Stanley talks about how millionaires spend their money. Of course, they invest. But millionaires are also very frugal. Some examples that Stanley points out are:

They tend to buy used cars. New cars depreciate too quickly for millionaires.

They buy couture clothes, but usually buy them second-hand. They want the quality, but know they will pay much less this way.

In what you might think is a contradiction to these previous two, they buy high quality furniture, which tend to go up in value.

So you know you’re thinking like a millionaire when you’re looking at every dollar you spend as an investment. Are you getting the return you want?

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Next time, we’ll talk about getting ahead by getting out. Until then, here’s to your bigg success!

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How to Attract and Retain the Next Generation of Talent

Written on August 27, 2008 by George Krueger & Mary-Lynn Foster in Business, Communication

soft_skills Beloit College recently published their eleventh annual Mindset List about this year’s crop of incoming freshmen. Check it out to understand the perspective of the Class of 2012.

For example, Jay Leno has always been the host of The Tonight Show for this group. Bring up Johnny Carson only if you’re prepared to explain who he was!

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Hear us discuss today's topic on The Bigg Success Show! Just click the purple play button: Play Now | Play in Popup | Download

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Putting it into con-text

We have a friend who thinks they lack social skills. He believes they’re so busy texting that they’ve never developed the ability to communication personally.

We disagree – we think they’re very social. A generation before, we e-mailed or called someone on their cell phone instead of texting. In our mind, the only difference is the medium used.

We wanted to dig a little deeper to fully understand the perceptions of young people in their late teens and early twenties. After all, they’re the ones who will be coming to us for employment in the near future.

The Media Center at the American Press Institute calls this group of people the “Content Generation” – they use text, videos, and photos (often generated from their cell phones) to connect and inform.

Understanding the paradigm

They have witnessed September 11, corporate scandals, mass layoffs, sweat shops, the burst of the dot.com bubble, and now the subprime mortgage crisis.

When they think of the future, they realize that they will have to fund their own retirement while they start and raise a family. Since their parents are older than previous generations, they will also likely have to care for them at some point in their lives.

The workplace for the next generation

All of these things impact the jobs they will choose. They don’t expect to stay at the same company for their entire career. They won’t necessarily take the job that pays the most either – they’re looking for more than money.

This generation grew up with Tom Peters and the idea of Me, Inc. They understand personal branding and seek lifelong employability. So two of the most important components of a good job are:

Personal and professional growth – They want a job that helps them develop skills that will be valuable in their career and at home.

Work – life balance – They want a job that allows them to enjoy their lives now. They’re not willing to wait until they retire to “live”.

They want to work for people in a company that truly values its employees. These people live the values they talk about. They follow through on what they say. They’re authentic.

For example, if you say you’re “green”, you better be green. You recycle. You use energy-efficient light bulbs. You work to reduce paper use. And that’s just the start!

We admire them because they’ve figured out some important things already that we didn’t have worked out at their age. They have a lot of potential. Time will tell if they live up to it.