The Millionaire Next Door and his/her money 6

I just came from the dentist to have my new crown fitted. We’ve been in a bit of a disagreement on pricing (and procedure) and I think one of the issues maybe a misunderstanding of the Millionaire Next Door.

My dentist has known me for a while, he even knows I’m a millionaire. Hard not to, considering the copy of my book I left behind in the waiting room.

He thinks I’m loaded. While I’m trying to tell him, the hard time I’ll have finding the funds to pay for the root canal and crown (and dental induced migraine ER visit), he’s trying to sell me on getting all my filled teeth crowned (probably a whopping $15,000 endeavor). There is a clear disconnect. He sees the stereotypical millionaire when in fact I’m the Millionaire Next Door.


We’re not loaded, we have a business.

What he does not seem to understand (and probably, no one ever explained it) is that the Millionaire Next Door’s million dollar portfolio is just like his practice. It is there to generate income, no more, no less.

Just like he wouldn’t sell one of his dentist chairs to buy a boat, the Millionaire Next Door can’t start selling shares, to pay for 8 new crowns (when fillings will just suffice).

If the dentist sells his chair, he can only cater to as fewer patients as before. Less patients, less revenue. Less revenue and he runs the risk of having to sell all his chairs.

If the Millionaire Next Door sells shares for discretionary stuff, he/she will get less dividends and less compounding, i.e. less revenue. Less revenue creates a need to sell even more shares and before you know it…

Just like it took my dentist many years to build his practice, it took years for the Millionaire Next Door to build his/her portfolio.

At the core, The dentist’s business is no different than the Millionaire Next Door’s (other than that, the Millionaire Next Door can keep on his pajamas on in the morning (and rest of day for that matter)). Both businesses are there to generate an income. Some years there’s plenty, some years there’s not.


A modest income at that

I’m not complaining but that income from my million dollar portfolio isn’t that grand. As a matter of fact, it does not even qualify us for upper middle class status.

When I retired 3 years ago, I retired on the cusp of being able to so. Our annual expenses came down to $69,000 (luxury in moderation) so based on that number our portfolio was going to last us till the age of 82 assuming an 8% return (Not ideal but just sufficient, and yes all based on assumption).

At 8% (i.e $80,000 a year) we would keep up with inflation and maybe even build a little cushion for the years that are not 8%. Indeed, I won’t weather another 2008 but then again, trying to prepare for that, I might as well have kept working till 65. Keep in mind, should that happen, I myself am still healthy and capable of work.

Since my retirement the stock market has kept its promise of returns, my budget on the other hand has not. Additional (annually recurring) medical expenses have added to date at least $6,500 to annual expenses. I should say; annually recurring and rising medical expenses as future deductibles, premiums and cost of medicine will likely make that number go way up.

So 1 million in stock results on average in $80,000 in growth. Out of that $80,000 I had planned to take $69,000 in income (like I said, can’t complain but modest at best) and the rest would remain invested for future growth.  Instead we’re now looking at requiring an income of at least $75,000 to cover for additional medical expenses.

We’ve adjusted our budget (living just a bit more modest) and will manage but it will most likely remain modest at best.


Don’t play that violin, but don’t come selling either,

we’re not buying. I’m not asking for pity nor sympathy, lots of people do with less, but when it comes to the Millionaire Next Door, don’t make the mistake of assuming there is abundance. The Millionaire Next Door got where he/she is by living the exact opposite, foregoing abundance and sticking with modest at best. By doing so (often for a long time) he/she can continue to live in comfort. COMFORT, NOT ABUNDANCE.

Don’t confuse the life’s of the rich and famous on TV with us that actually had to work hard and long for it. We generally live opposite lifestyles. Unfortunately, the bling bling is generally the only picture of the rich you get (probably explaining my dentist’s confusion). I’m not Floyd.


Don’t think of the millionaire next door of having a lot of money

Think of him/her as having a business. A business that took years to build and after those many years is finally bearing fruits. He/she has lived a life of modesty and probably still does.

If you want to truly know the millionaire next door, I recommend reading the best seller book The Millionaire Next Door by Thomas J. Stanley and William D. Danko on it (preferably after reading my book, How To Make a Million in 10 Years). It served as an inspiration for myself and many others like me. Worst case it may just change your view on the truly rich, best case it will help you get there yourself (that is, if my book hasn’t convinced you first. After all, they write about the Millionaire Next Door, I am the Millionaire Next Door).


Good luck reaching your financial goals.


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About Maarten van Lier

Maarten came to this country with a suitcase and a diploma. He created a financial plan and goal to become a millionaire in 10 years. He successfully turned his financial goals into reality, wrote a book about it and now blogs actively in hope of inspiring other to do the same.

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6 thoughts on “The Millionaire Next Door and his/her money

  • Mrs. Groovy

    What you’re going through is one of the reasons why many don’t want others to know their net worth or financial situation.

    I’m disappointed that your dentist is proposing services based on what he thinks you are worth, instead of what services you need. He’s not very honorable.

    • Maarten van Lier Post author

      You probably know from reading The millionaire next door that when it comes to managing money, doctors are the worst. He truly is a believer in what he’s offering, he is however off on what I can afford.

  • Martin - Get FIRE'd asap

    Beautifully put Maarten. I get this from people occasionally “you’re rich because you retired early”. And now I have the perfect response thanks to your post. I’m not rich, I have a business. Brilliant.

    And you are so correct. I built this business through hard work, forgoing luxuries and wasteful spending, and investing smartly.

    I haven’t read The Millionaire Next Door but I should. Thanks for the excellent post.

    • Maarten van Lier Post author

      Thank you. The book might not teach you anything new. Clearly you’re doing just fine. These guys studied the millionaires next door. If you want to sway friends and family maybe let them read that first.

  • Mr. Groovy

    “What he does not seem to understand (and probably, no one ever explained it) is that the Millionaire Next Door’s million dollar portfolio is just like his practice. It is there to generate income, no more, no less.”

    Beautiful, Maarten. Now I have my counterargument when people give me the “you’re rich” line. No I’m not. My business (i.e., portfolio) gives me enough money to live comfortably, not extravagantly. And that assumes the wild card of healthcare doesn’t turn against me. Great post, Maarten. I love the way your mind works.

    • Maarten van Lier Post author

      Thank you. I’ve always hated the word rich to begin with. Rich to me, is so much more a state of mind than how much money is in your pocket.

      Also sometimes I wonder if when asked what I do I should say “I’m an investor” instead of “I’m retired”. The reason I don’t is because my investments have been on auto-pilot for many years now (my smoothly run business).