Thomas Stanley has written a number of books on the millionaire next door and Stop Acting Rich, John Wiley & Sons, 2009 is one of the books he has written. When we think of billionaires and millionaires, for most of us the billionaires are in a different group than us. However, the ability to become a millionaire is within reach, what it really means is living a good life, but living below your yearly income to have savings. When you have savings, then you can invest your money into things that produce an income and overtime your money will grow. When you live slightly below your income, while it is possible to buy in the premium areas of housing, clothing, etc. the practical step is to look and find great value first. It can be in the premium area or it could be in the non-premium goods.

Mr. Stanley believes where you buy your home is a good indication of how much your spending will go up or down. If you are a normal person, you are influenced by your neighbours. If all your neighbours tend to adopt a certain lifestyle, then you will to. Perhaps not at first, but slowly and you will soon be spending most of your income on upkeep. If you bought in a different neighbourhood, but still a good one, your neighbours may have different spending habits and you would not have to spend as much money. The classic example is a vehicle – to many it means something, to others it is a transportation device, what kind of vehicle you buy or what your neighbours have will influence your other shopping habits. There is nothing wrong with spending your money, there are many people who get paid trying to figure out how you can spend even more.

Linking to dividend paying stocks, when you have savings you can have investments, if the investments have a cash flow or dividends over time the investment will grow. The dividends help ensure management of the company does not do anything to rash to upset the payments and to keep making a profit. Making a profit every year will push the price of the stock upwards and although it will go up and down, the long term trend is upwards. The stock will go fluctuate because the market rewards different strategies at different times. In a low interest market, having some debt is good, in a high interest market having too much debt is not good. With the dividends, the company tries to retain a balance approach.

There are more questions than answers, till the next time – to raising questions