Image courtesy of Tom Ruette

Thomas Stanley, the author of "The Millionaire Next Door" has made a career out of studying the wealthy and found that most millionaires don't live the way you think they live. Stanley's definition of a millionaire is someone who has assets of at least a million dollars, not including houses and cars.

One of the most common traits of millionaires is that they live well below their means. I think one of the biggest causes of the current housing crisis is that people were trying to "live like the Joneses" and bought a lot more house than they could afford. If you are making $100,000 a year, you probably should not be buying a $300,000 home. Surprisingly, as a whole, more millionaires live in a $300,000 home than those that cost over a million.

Believe it or not, most millionaires are actually frugal. They saved money and became millionaires by making cost-conscious decisions when it comes to big ticket items. They don't always buy the biggest home, the most expensive car or send their kids to the most expensive schools. Most millionaires don't drive a Mercedes, BMW, Porsche, or other expensive cars.

As a society, we are so quick to equate wealth with possessions. I admit that I am guilty of doing this myself. Consider this: the next time you are sitting at the traffic light and there is a BMW or Mercedes to your left and a Toyota Camry to your right, don't be so quick to assume that the person driving the BMW is the one with money. The person driving the BMW probably has a car payment the size of a mortgage payment and may be struggling to make the payment whereas the driver of the Toyota Camry may own his vehicle free and clear and is using his money to build real wealth and not just an appearance of wealth.

Let's start living like millionaires in 2009. Let's start living a frugal lifestyle and use our money to build wealth. If you are about to purchase a home, think about what you can truly afford, not what the bank will lend you.

I'm not saying you should deprive yourself of the occasional splurge. If there is something that you want to buy (excluding a house or car), go for it. Just make sure you've saved the money and are not relying on a credit card to finance the purchase (unless you pay in full each month).

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When I was a young child, my uncle would amaze me will different kinds of magic tricks. One of the tricks he would do and the one I enjoyed the most was the old "quarter behind the ear" trick. Looking back on it, the trick was pretty cheesy and if I'd paid attention, I could have seen exactly how the "trick" was being performed.

It's been about 20 years or so since I've seen a magic trick involving money. Yesterday, I saw something that could have been described as a bad money trick.

This guy in front of me at the gas station purchased $90 in gas and $10 in lottery tickets and paid with a hundred dollar bill. In a matter of seconds, the hundred dollar bill was gone. I can't believe how quickly this guy went from having a hundred dollar bill to not having it.

If I want to giving my savings a boost, maybe I should switch to using cash only. I know it would be alot harder to spend cold hard cash versus putting the purchase on my debit card.

Image Credit: bdjsb7

I am looking for a table for my entryway but I don't want to pay store prices for it. I figure the best way to get a nice table for a cheap price is to go to a garage sale. I'd seen numerous signs around my area advertising garage sales today and figured this may be a good way to get a cheap table. I got up early this morning armed with $50 and a cup of coffee. I went to one of the nicer subdivisions close to my house and started my search for a table. I didn't find the table I was looking for but I did find an interesting financial story.

I stopped at this one house because they had one monster of a garage sale. They had so much stuff (no table though), I thought it was a multi-family garage sale. The owner seemed nice so I started making small talk by making a comment on how much stuff they had for sale. She said that they had to get rid of everything quickly. Pushing a little further, I asked if they were about to make a big move. She said that times were pretty hard since her husband lost his job about a year ago. I took that to mean that they had blown through all of their savings and probably had to find cash quickly.

What I didn't understand is why they still had all this "stuff". They had 2 nice fairly new SUV's (aka: gas guzzlers) parked in the yard; complete with nice fancy rims. I also saw 4 jet ski's and a nice boat all of which had a "for sale" sign on them. If her husband lost his job over a year ago, I didn't really understand why they had not sold the "toys" a year ago.The prices on the boat and jet ski were VERY cheap and had I been in the market for a boat or jet ski, I probably would have bought them myself. I think they probably tried to hold onto them as long as they could thinking things might change.

There were so many questions I wanted to ask but it wasn't my place to do so. I didn't know anything about these people so I probably wouldn't have gotten many answers anyway. I also didn't want to risk getting kicked off their property for being so nosey. Maybe if I had the full story, it may have explained their situation a little better.

Let me hear your thoughts? What would you have done?

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Image Credit: John Beagle