25 Mar 2007 #0712.html

Millionaire Next Door

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Dear Family and Friends,

Welcome to this week's "Thoughtlet."

These words are my personal diary and a weekly review of ideas, beliefs, thoughts, or words that will hopefully be of some benefit to you: my children, my family, and my friends.

"Several months ago Deanna Warden said to me, 'You are the millionaire next door.' I laughed and told her there was a time when I had money, and now all I have is debts. She told me she had a book she thought I should read. Then she went on a trip, told her husband to bring the book to me, who told me he was told to bring the book to me, and never did. Then she came back, and eventually brought me the book. It is called "The Millionaire Next Door, the surprising secrets of America's wealthy" by Thomas J. Stanley, Ph.D., and William D. Danko, Ph.D. I have been reading "State of the World - 2004," and decided it would be a good idea to take this book with me and read it while we were on our Disney World Vacation 2007 (0711.html). So I started reading it on the plane between Houston and Atlanta, then between Atlanta and Orlando, then when we stood in the long lines at Disney World, then at the airport in Orlando, then on the plane between Orlando and Atlanta, then at the airport at Atlanta during our all night vigil, on the plane between Atlanta and Houston, and during lunch on Monday and Tuesday of this week when I finished it. I recommend each of you read this book, especially as it relates directly to my family of origin's, and especially to my personal financial dysfunctions. There is no reason for any of you to carry on this tradition. I won't summarize the book, and I will type out the quotes I wrote down while reading the book, to give you an introduction:

• Page 42. Tabulating helps control consumption.
• Page 68. If you're not yet wealthy but want to be someday, never purchase a house that requires a mortgage that is more than twice your household's total annual realized income.
• Page 80. It is very difficult for a married couple to accumulate wealth if one is a spend thrift. A house divided in its financial orientation is unlikely to accumulate significant wealth.
• Page 108. Choose a financial adviser who is endorsed by an enlightened accountant and/or his clients with investment portfolios that in the long run out pace the market. If you don't have an accountant, hire one.
• Page 115. "Should I lease?" Our answer is always the same: More than 80 percent of millionaires purchase their vehicles. If and when more than 50 percent begin leasing, we will change our recommendation.
• Page 154. Gift receivers . . . the adult children of the affluent feel that their parent's wealth / capital is their income . . . income to be spent.
• Page 156. About two of every three adult children who receive significant cash gifts periodically from their parents view themselves as members of the "I did it on my own" club.
• Page 156. Adult children who receive cash gifts are more likely than other adult children to live in anticipation of the sizable inheritance eventually coming their way.
• Page 165. Independent of college tuition, more than two-thirds of American millionaires received no economic gifts from their parents.
• Page 168. The more dollars adult children receive the fewer dollars they accumulate, while those who are given fewer dollars accumulate more.
• Page 168. The most successful business owners are the ones who put much of their own resources behind their ventures. Many succeed because they have to succeed. It's their money, their product, their reputation. They have no safety net.
• Page 171. It takes considerable courage to work in an environment in which one is compensated according to one's performance. Most affluent people have courage.
• Page 176. Housewives are three times more likely to receive substantial inheritances from their parents than are adult children of the affluent on average.
• Page 195. If you are wealthy and want your children to become happy and independent adults, minimize discussions and behaviors that center on the topic of receiving other people's money.
• Page 196. Spouses are often the initiators of family conflicts regarding inequalities in the distribution of wealth.
• Page 201. It's better for the children to be mad at the arbitrator than with each other.
• Page 203. Rules for affluent parents and productive children:
  1. Never tell children that their parents are wealthy.
  2. No matter how wealthy you are, teach your children discipline and frugality.
  3. Assure that your children won't realize you're affluent until after they establish a mature, disciplined, and adult lifestyle and profession.
  4. Page 205. Minimize discussions of the items that each child and grandchild will inherit or receive as gifts.
  5. Never give cash or other significant gifts to your adult children as part of a negotiation strategy.
  6. Page 206. Stay out of your adult children's family matters.
  7. Don't try to compete with your children.
  8. Page 207. Always remember that your children are individuals.
  9. Emphasize your children's achievements, no matter how small, not their nor your symbols of success.
  10. Tell your children there are a lot of things more valuable than money. Good health, longevity, happiness, a loving family, self-reliance, fine friends . . . if you [have] five, you're a rich man. . . . Reputation, respect, integrity, honesty, and a history of achievement!
• Page 209. Life is the long run.
• Page 228. The character of the business owner is more important in predicting his level of wealth than the classification of his business.
• Page 228. Money, in your mind, may be the most easily renewable resource. If you think it is, you may be a spender and never an investor.
• Page 234. They [the Government or creditors] can take your business, but they can't take your intellect.
• Page 240. The most successful business owners we have interviewed have one characteristic in common: They all enjoy what they do. they all take pride in "going it alone."
• Page 241. Courage is behaving in ways that conjure up fear. . . . Fear abounds in America. . . . Who has less fear and worry? . . . Typically, it's the entrepreneur, the person who deals with risk every day, who tests his or her courage every day. In this way, he learns to conquer fear.
• Page 237. Dull companies with steady earnings growth may not make for stimulating cocktail party chatter, but over the long term they make the best investments.
• Page 239. Business owners have a set of beliefs that help them reduce their risk, or at least their perceived risk: I'm in control of my own destiny.
• Risk is working for a ruthless employer.
• I can solve any problem.
• The only way to become a CEO is to own the company.
• There are no limits to the amount of income I can make.
• I get stronger and wiser every day by facing risk and adversity.

I could elaborate on why I took each of the notes I took. And I won't. There are things I told others I will not write about in these Thoughtlets, and so I won't. Again, I encourage any of you who read this Thoughtlet to read the book, "The Millionaire Next Door." Tuesday I called Merril Littlewood, my accountant for many years, and asked him if he has read the book. He said, "I could have written it!" Then he went on about how he might write his version some time, and how his version would focus on provident living. I asked him for specifics, and he said it would be a good idea for Andrea and I to downsize our house. He went on to say he realizes I have an emotional attachment to the house, and that he thinks it is time for me to sell it and to get into a smaller house. Interesting. What do you all think?

The reason I called Merril was because he now works for a different company, and they have a different contract they want me to sign before doing my HyperMedia Corporation, Dynamic Oil & Gas Corporation, Dynamic Resources Corporation, Walden 3-D, Inc., and Heritage Gallery On-Line, Inc. taxes. The contract includes the statement:

One of the reasons Merril has been my accountant, confidant, and friend for15 years now is his background. He worked for Exxon early in his career. He was the project manager responsible for building Exxon's corporate headquarters in New York. Then he helped set up Friendswood Development Corporation, which built Clear Lake and other cities from property Exxon owned. Then he went to Rifle Colorado and built a new city to support the oil shale business. Then he went to work as an independent tax accountant providing advice and counsel to high income individuals and families, specializing in supporting Mom & Pop Oil Companies. And he is LDS. And he is from Utah. And he is a good guy. And it has been discussed many times that when one of my big deals goes through, he is going to come to work for me and manage it. So I needed to ask him about this 'contractual' clause. He told me it was irrelevant because the only person I would be interested in hiring is him, and he is not an employee of GRIFFING & COMPANY, P.C. This was good enough for me.

Probably the highlight of my week at work was Roice beat me at chess again. Just for the record, here is a listing of our conversations during the course of this several week long second on-line chess game:

This is a lot easier way to play chess than when I was first playing e-mail chess with Roice and Ben and Paul. In those games I would set up the chess board as a HyperEdge^SM image, move image objects on the chess board as moves were made, taking screen captures, and then posting these screen captures at http://www.walden3d.com/chess/gifs. The last two photos I posted were on the 9^th of March 2000, and are placed below as a historical side note:

It is much easier to play chess by going to http://www.redhotpawn.com, setting up an account, and then just let them take care of the logistics. I am Roice2 and Roice is Roice3, in case any of you want to sign-up and challenge either of us to a chess game. I figure I can handle 15 chess games at once, if everyone (spouses included) wants to challenge me to a game at the same time. AND I WILL BEAT YOU, ANY AND ALL! (Even though I have to admit Roice skunked me on the first two games I played with him.)

Tuesday while I was walking the stairs, Melanie left the following message on my e-mail:

I transcribed the above from my phone mail, and listening to it several times, I realized how much the written word misses the inflections, intonations, pauses, repeats, etc. Maybe this is part of the reason why I spend so much time with a keyboard, writing these Thoughtlets, and so little time talking on the phone. There is probably something missing in me regarding handling this other side of communication. In addition to my pride and most recent decision not to call, rather to let you kids call me. When I got home Tuesday evening the following e-mail was in my mail box:

I helped pick velocities on a project for Norsk Hydro. Norsk Hydro purchased Spinnaker, which was a very successful Houston start-up oil and gas company that I attempted to pattern Dynamic Resources after. The reasons it hasn't worked yet is largely financial, and also not having an agreement with a large seismic acquisition company to have access to their spec seismic data, in Spinnaker's case the company was Geco and the spec data were offshore in the Gulf of Mexico. My intention is to approach SEI, Seismic Exchange, Inc., once I have proven the ability to regionally confirm geopressure cells with other data. I also spent some time at work, since I am still waiting for the Redtack migration to finish running, and my boss is waiting for the client to make some decisions before pursuing the full volume migration, continuing my writing on An Open Mind. Over the last couple of weeks I have built a chart I call 'The Gods of Mankind,' which I find very interesting. I spent all my spare time this week working on the next chapter and this chart.

Thursday evening Sara called, which was very nice. She wanted to tell me she has just receive a promotion, a 12% pay raise, and a 140% of the available bonus. She was one of only three in her area to get excellent in her evaluation. She was very excited, and I am excited for her. She said: "I'm my father's daughter," to which I replied, "Hopefully, you follow the good side of me and not the bad." It was very nice to talk to her. I miss the Sunday night conversations with each of you (when you would pick up your phones, and when you were not telling me about inappropriate Sabbath activities), even though most of the conversations were very superficial.

Friday night Andrea and I went to Cinemark to see 'The Bridge to Tarabithia.' However, the paper had the time wrong, and we were late, so we went back home. Andrea continued to work on a baby quilt, and I continued to work on my chart. By Saturday evening I finally finished converting the first page of the chart to html (see http://www.walden3d.com/openmind/108.html"> http://www.walden3d.com/openmind/108.html).

Saturday morning, after reading the paper and working on An Open Mind for a couple of hours, I mowed the lawn and raked leaves. Andrea helped, and it was hard work to rake the leaves. I was very sweaty and very tired by the time we finished. About 4:30 in the afternoon Andrea and I went to see Sandra Bulloch's new film, "Premonition." I do not recommend this film. It was all about mixing up time, and a mind that forgot one day completely. It was also about planned infidelity and death in a car accident and I didn't care for it. Andrea liked the movie, and felt it resolved very well. This definitely shows the difference in tastes. Oh well!

Michelle and Johnathan Schmidt bore their testimony first thing on Sunday morning. It was a repetition of the discussion we had last Sunday when I Home Taught them and we talked about the importance of bearing your testimony, and how those kids who never bore their testimony tend to be the kids who never heard The Holy Ghost and never gain a testimony. It was flattering to have Michelle talk about how nice it is to have me as their Home Teacher and how I never miss a month in visiting them. Especially since when I was first called as their Home Teacher, I insisted on visiting, and Michelle made such a big deal about how it is not all that important. I told her it is important to me, and that it is one of those things I can do perfectly. I can visit each of my families each month. There are things I can not do, and this is one thing I can do. And so I do it. And it is appreciated.

My primary class was on Baptism, and everyone was there except Andrew Sprueill, who was in opening exercises to watch his sister talk, who did not stay, and Bethany Gillette, who left after Sacrament Meeting because Shane blessed her new baby sister and they had a couple of dozen family members visiting that all went back over to their house. Oh well! We also had a visitor named Jose, who was obviously a very intelligent young wetback, at least based on the fact he did not want me to know his address, like I was going to report him. Oh well! At the end of class, Charlotte Wardon stayed after and wanted me to know that her family is going to be moving to California. Her Dad's brother-in-law has offered him a better job. So I guess this means I need to return to Deanna Wardon the book 'The Millionaire Next Door.'"

Since the 38th week of 1996 I have written a weekly "Thoughtlet" (little statements of big thoughts which mean a lot to me). Until the 43rd week of 2004 I sent these out as an e-mail. They were intended to be big thoughts which mean a lot to me. Over time the process evolved into a personal diary. These notes were shared with my family because I know how important the written word can be. Concerned about how easy it is to drift and forget our roots and our potential among all of distractions of daily life, I thought this was a good way to reach those I love. It no longer feels right to send out an e-mail and "force" my kids and my family to be aware of my life and struggles.

Everyone has their own life to lead, and their own struggles to work through. I will continue this effort, and will continue to make my notes publicly accessible (unless I learn of misuse by someone who finds out about them, and then will aggressively pursue a legal remedy to copyright infringement and I will put the Thoughtlets behind a password).

The index to download any of these Thoughtlets is at http://www.walden3d.com/thoughtlets, or you can e-mail me with questions or requests at rnelson@walden3d.com (note if you are not on my e-mail "whitelist" you must send 2 e-mails within 24 hours of each other in order for your e-mail to not be trashed).

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Copyright © 2007 H. Roice Nelson, Jr.