The Millionaire Next Door

Reading Questions
Bryanda Garcia
FIN 1050-403

The Millionaire Next Door e-Portfolio Reading Questions

1. The following two concepts discussed in our reading were
a. Big Hat, No Cattle this phrase is used to mean someone who flaunts their
wealth but has not accumulated much wealth. The Texan who coined this phrase
was a rancher who was actually very wealthy but did not show it, unlike Big Hat,
No Cattle folks who show-off and hyper-consume into rich people stereotypes.
b. Go to Hell Fund-meaning a person who has accumulated enough wealth to keep
their current lifestyle, without working, for ten or more years. Its something
wealthy people are able to tell their bosses since they dont have an immediate
need for the job.
2. In the examples of Mr. Richards and Mr. Ford, both men are closely related in age and
yearly income but Mr. Richards net worth far exceeds that of Mr. Ford. Bubba
Richards is a mobile home dealer while Mr. Richards is an attorney. Mr. Richards is at a
disadvantage because he is an attorney, he has to look and play the part of a wealthy man.
He has a higher propensity to spend than members of the PAW group. He drives a nice
car, wears nice clothes, and has expensive tastes because that is what is expected of
attorneys. His clients might lose trust in him if he didnt live lavishly. Meanwhile,
Bubba can live a middle class or even blue collar lifestyle and live well below his
means and accumulate wealth.
3. Provide short answers to the following three questions:
a. Most people will never become wealthy in one generation if they are married to
people who are wasteful.

The Millionaire Next Door

Reading Questions
Bryanda Garcia
FIN 1050-403

b. Upon giving his wife $8 million of stock, from taking his company public, what
did his wife continue doing? She continued coupon clipping and staying frugal as
always.
c. Why would someone who is a millionaire need to budget? Many became
millionaires by budgeting and controlling their expenses. There are many who
earn high incomes but do not budget well so they dont stay millionaires.
4. In the example of Theodore Teddy J. Friend and his parents, answer the following two
questions:
a. The book describes Teddy as being possessed by possessions. Explain this
comment. He works for his things, his motivation and thoughts are focused on
symbols of economic success such as cars, a nice home, fancy clothes. He feels
the need to convince others of his success but he hasnt convinced himself.
b. What was the small change Teddys parents could have made that would have
put them in the millionaire category? They were heavy smokers and the book
suggested they should have invested the money they spent on cigarettes and
invested in cigarette stocks. At the end of their smoking career, they would have
had a tobacco portfolio worth over $2 million.
5. Mr. Rodney is a high-income/low-net worth corporate manager. Explain why he is
described as having sold his financial independence. He has so many bills, a high
mortgage payment, 2 leased vehicle payments, tuition, club dues, vacation home
expenses, and taxes so he cant afford to participate in his employers tax advantaged
stock plan. If he would participate, he would decrease his tax payments and be able to
retire comfortably someday.

The Millionaire Next Door

Reading Questions
Bryanda Garcia
FIN 1050-403

6. Why did Mr. W.W. Allan decline the gift of a Rolls-Royce? - He doesnt want the fact
that a fancy car might change his current lifestyle, he says products change people and
doesnt want to change his life to go along with owning a Rolls-Royce. He also believes
that owning two cars is inefficient, and he really likes going fishing and being able to
throw his bloody fish into his backseat. A Rolls-Royce would look out of place at the
fishing lake. Lastly, he wouldnt want his employees to think he was exploiting them.
7. Regarding Economic Outpatient Care (EOC), answer the following four questions:
a. Explain this statement The more dollars adult children receive, the fewer they
accumulate. Wealthy parents enable their childrens laziness/wastefulness by
giving them money. The more money parents give their adult children usually
correlates with less saving for the children. Its easier to spend other peoples
money than dollars that are self-generated.
b. What is the likely financial outcome for Mary & Lamar once her mother passes
away? It wont take long for them to consume even a good size inheritance. They
will likely have to give up a lot of what they were used to.
c. The parents of Ms. BPF were determined to give their daughter every advantage.
After they created an ideal environment for her, what was the result? Ms. BPF
wanted to start a business so the parents put up all the money for her business,
she didnt have to apply for loans or anything. They also thought it would be
easier on her if she lived at home. She didnt have to worry about cleaning her
own room, paying rent, feeding herself. Now shes in her late 30s, living at home,
will probably never be independent. Her business is still going, she reported an
income of 50,000 but her parents put in 60,000 to her business every year.

The Millionaire Next Door

Reading Questions
Bryanda Garcia
FIN 1050-403

d. In the case of Laura (A Woman of Great Courage), explain the primary message
derived from her story. She was raised to be independent. Her parents
encouraged her to sell herself well to employers by having many summer jobs and
sales jobs. Life happened and her husband left her and she had to make it on her
own with her children. Because of the life lessons she learned early in life, she
was able to excel at real estate and be able to support herself and her family.
8. Regarding Affirmative Action, Family Style, answer the following three questions:
a. In the example of sisters Ann & Beth, describe the consequences to Beth & her
husband from receiving EOC? Beths family receives 20,000 in cash annually.
They live less than 2 miles from their affluent parents. Beth and her husband used
to live with Beths parents while her husband was finishing his degree. Neither
were working during that time. After Beths husbands job was not needed, Beths
dad gave her husband a job at his company, putting Beths family further in their
parents pocket. When Ann married, she made sure to move as far from her
parents as she could. When Ann introduced her husband to the family, they
treated Beths husband like the servant boy and the father called him a bozo.
b. Explain the concept weakening the weak. By not allowing someone the
independence to do something on their own, they enable them to be lazy or stop
trying. Like the father who wrote his sons essays for him beginning in grade
school and continuing to do so even though his son was in college. The son will
never know if he would have been able to do his own schoolwork and achieve on
his own.

The Millionaire Next Door

Reading Questions
Bryanda Garcia
FIN 1050-403

c. Select one of the Rules for Affluent Parents & Productive Children and explain
why you think this rule is most important. I think one of the most important and
least followed rule would be rule #5 Never give cash or other significant gifts to
your adult children as part of a negotiation strategy. I feel like many parents want
all of their children to be treated equal, like if one kid gets something, the other
should as well. It actually negatively affects the relationship between the child and
parents. I like when our text said that those on the receiving end view the gifts as
signs of guilt or appeasement on part of their parents. It also said that adult
children often lose respect and love for parents who submit to high-pressure
negotiating tactics.
9. Explain the root cause for the conflict between Mr. W & the residents of the vacation
condominiums. The real issue was that Mr. W and his family werent like the other
people at the condominium complex. They said it was about his dog but it was actually
that he didnt live an extravagant lifestyle and didnt flaunt his wealth like his neighbors.
This became apparent when he offered to have his condo as a vacation home for his bluecollar employees and the residents told him they would rather just keep him and his
several hundreds of thousands of dollars worth dog.
10. Now that you have finished reading The Millionaire Next Door, what are two concepts
you found most useful and give an example of one small change you can make to
improve your financial well-being, in a minimum of three paragraphs:
There were many concepts I found useful in our reading. I found myself thinking
about my own finances and my own budget often. I think I related the most to Teddy J

The Millionaire Next Door

Reading Questions
Bryanda Garcia
FIN 1050-403

Friend. My family wasnt very wealthy growing up. My parents were serious UAWs,
any wealth they gained, they spent. They made money to spend it and to this day, neither
of my parents has any money saved for retirement. I got a brand new car as soon as I was
able and now my car is worth half of what I still owe on it.
One of the first important concepts I learned was the value of budgeting. I, like
many people, assumed wealthy people didnt need to budget. During the reading, I began
adding up my own expenses and creating a budget, seeing where I could save some spare
change. I found myself rethinking my money strategies and whether I really needed those
new shoes. I also told my mother I was going to start a budget for her and let her know
how much she is spending on unnecessary items. She was very excited about the idea.
The second important concept I really liked and hope to apply is not to weaken
the weak. I feel like I do this within my own marriage. My husband will forget to
register for school, set up an advisor meeting, or call our insurance company to figure out
some pressing matters. So sometimes I will just take the initiative and do these things for
him, but in reality, I shouldnt be doing that. I also want to implement this concept for my
future kids. I think it will help them tremendously in the future.
The last important concept would be that family matters over material things. The
text had many examples of people living wealthy but they were living outside of their
means and their fears were greater than those living below their means. Before reading
the text I was convinced that a fulfilling life was filled with world travel, expensive cars,

The Millionaire Next Door

Reading Questions
Bryanda Garcia
FIN 1050-403

and expensive homes. I think a lot of millennials feel this way. I realized however that the
less we save and the more we spend, the less secure of a future we have.
After reading the text there are many changes I plan to make and have made
already to ensure myself and my family a successful financial future. The small change
that I will make is investing more in my workplace retirement plan. They match my
contributions and I havent been taking advantage of this. I always figured that since I am
still young, I will have a lot of time to be able to save for retirement, but the earlier I start
saving, the better I will live once I retire.
REFLECTIVE WRITING:
Students develop quantitative literacies necessary for their chosen field of study.

The knowledge gained from reading this text and completing this assignment is valuable
to anyone in any field of study. I have already recommended this text to my parents, my husband,
and even my manager. This learning objective discusses how we can approach practical
problems by choosing and applying techniques we learned from our assignment. I have
demonstrated this in my daily life already and will apply it to my future. Financial literacy is so
practical and applicable to everyone. Budgeting, planning, smart spending, and lessons to teach
children is invaluable information and I am glad I have these tools so I can face any practical
problems thrown at me.
Students develop civic literacy and the capacity to be community-engaged learners who act in
mutually beneficial ways with community partners.

The Millionaire Next Door

Reading Questions
Bryanda Garcia
FIN 1050-403

The Millionaire Next Door taught lessons about the communities we live in and what
kind of financial environment we are living in. Consumerism was a big topic and many
Americans today are hyper consumers. The text taught us about how some people who may seem
wealthy may actually not be when their net worth is taken into account. They buy into the
culture. The text showed that Americas most wealthy are often not hyper consumers, and that is
the best way to accumulate wealth. The lessons learned are very much about civic literacy and
help us be better community partners. If we are not over-spending, we can give more to our
communities.