Got your heart set on being a millionaire? Stop trying to look like one
There are many words to describe how people end up in financial trouble, but one stands out.
Pretenders.
Sure, sometimes bad things happen and it’s not your fault. But many of you - and you know who you are - are experiencing economic problems because you were pretending to be rich.
Thomas J. Stanley has been examining the truly rich for years. A former professor, he’s the coauthor of one of my all-time favorite personal finance books, ”The Millionaire Next Door.”
Just before year’s end, Stanley released ”Stop Acting Rich . . . And Start Living Like a Real Millionaire.” I’m recommending this as the February selection for the Color of Money Book Club.
The credit crisis and recession, Stanley says, have presented us with the opportunity to treat and cure the pretenders. ”But for the treatment to work, you must take a cold hard look at your balance sheet and at your life, and determine if you would be wealthier if you would stop acting rich,” he writes.
In Stanley’s new book, a millionaire is defined as someone with net-value investments of $1 million or more. The investments include such items as cash, stocks, bonds, mutual funds, and equity shares in a private business. The author said he eschewed the traditional way people calculate wealth: If your net worth was $1.5 million with 85 percent of that from your home, and the value of your home depreciated by 50 percent then your wealth wasn’t real.
Stanley’s research does a great job of proving that there’s a big difference between income and net worth. Many pretenders have become very good at generating income and enjoying a high standard of living.
Stanley has one major purpose for this latest installment in examining the lifestyles of the truly rich. He wants to make the case that if people stop acting rich, they can achieve the kind of happiness money can’t buy. Here are just a few things Stanley found in his research:
■ Eighty-six percent of all prestige or luxury makes of motor vehicles are driven by people who are not millionaires.
■ Typically, millionaires pay about $16 (including tip) for a haircut.
■ Nearly 4 in 10 millionaires buy wine that costs about $10.
■ In the United States, there are nearly three times more millionaires living in homes with a market value of under $300,000 than there are living in homes valued at $1 million or more.
Will the recession motivate pretenders to hit the reset button and not just act rich but live modestly?
Stanley isn’t so sure. ”Time will tell if society and people have really changed,” he says. ”My research indicates that people - for generations - have become so accustomed to consuming that it is second nature, and I am fairly certain that they will resume their spendthrift ways once outward symptoms of the financial flu have passed.”
Michelle Singletary is a columnist for The Washington Post. She can be reached at singletarym@washpost.com. 
