A personal finance blog dedicated discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance.


Wednesday, August 03, 2005

The Seven Common Denominators of Building Wealth

I'm on a The Millionaire Next Door kick. In the introduction, the authors list the seven common denominators among those who successfully build wealth (which are each given a chapter in the book):

1. They live well below their means.

2. The allocate their time, energy, and money effieciently, in way conducive to building wealth.

3. They believe that financial independence is more important than displaying high social status.

4. Their parents did not provide economic outpatient care.

5. Their adult children are economically self-sufficient.

6. They are proficient in targeting market opportunities.

7. They chose the right occupation.

In my opinion, the most important factor is number one, living below your means. Anybody can build wealth by living below their means and wisely investing the difference.

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