[SeaSiren]

(sorry long)

I am reading a book (not extremely new) called "The Millionaire Next Door". It talks about the majority of Millionaires not the small percentage you see on their Yachts on TV. It says most live in lower to middle income houses, don't drive this years model car, etc, etc.

In the beginning of the book, what I found most interesting is per percentage of ethnic groups there was a higher percentage of persons from Russian and Scottish decent then any other. Even more interesting was the yearly income of the Scottish Americans was lower then the other groups, yet they still became Millionaires living more frugally then the rest of the groups. In other words "living well below their means".

So what kind of values do you think were instilled in the Scottish Americans that the other groups don't have?

I'm so curious as I struggle with frugality, a trait not instilled to me by my parents. Society doesn't want me to build a safety net. This was all spurred by another comment on the vehicle I drive. Since I am a business owner, I guess they assume I should be driving the latest and greatest....whatever, as a status symbol. So everyone can see/assume I am successful. I prefer to drive my 9-year-old vehicle; it runs great, looks just fine, and most of all its PAID FOR! I do not see the logic in picking up a car payment, or tossing out my old vehicle. Why should what I drive be important to them?

On another note, my Great Grandmother was very frugal. She saved all her food (even scraps) to eat later or use in her garden, she saved everything (stacks of paper ect) and you couldn't convince her the light went off in the fridge when you closed it so she took the light bulb out to save electricity. Her daughter my Grandmother was good with bookkeeping and numbers but lived more extravagantly with her husband's newest cars and lots of clothing and shoes, they did however have a savings. My mother spends at an unbelievable rate and now has no money for retirement. I have to wonder how my family got so far away from living within our means, from saving for the future. It saddens me that I have to teach myself, and learn new habits with no family role model to help.

 

[Elena99]

That's really interesting.

My father is Scottish-Canadian, his mother was a Scottish warbride. My dad always told me stories about how frugal she was, how hard she worked to get a job when she was first over here, and other "hard living" stories.. A very strict, tough, frugal woman.

My father isn't very strict about money, but my mother (Acadian) is. Or maybe she's just so strict that my father looks casual by comparison. I didn't realize how strict I was about money until I got married, so it looks like it was passed down to me as well.

 

[nigel]

My wife is Scottish. I have noticed in her, her family, and apeople we've met in Scotland a generally higher level of frugality that I see in the States. She's not rich, though. I guess I missed out on that part.

Her favorite joke has to do with copper wire being invented by two Scots fighting over a penny.

 

[Joe]

You've touched on something that I could write a book on, or perhaps several books. Of course, there are many books on the subject already.

I am not of Scottish ancestry, and I think the bit about the "frugal" Scot is a bit of an ethnic stereotype, but perhaps with some truth behind it.

I grew up in a house where my parents had grown up during the Great Depression, and I heard about the deprivations of this constantly. My parents were always very conservative with their finances, and lived well below their income. They were always fearful that my father would be thrown out of work (he never was, and held a middle management executive position), so lived as if they had to have savings to endure a long bout of unemployment (having the trauma of the Great Depression linger in their consciousness). My folks moved from PA to Long Island, NY and bought a 3 bedroom house, the first house they owned. They took out a mortgage like everyone else. But I later learned that they had enough money in their savings account at the time they bought the house to have paid cash for it.

You are also talking to someone who drives a 21-year-old vehicle.

There are lots of books on budgeting, financial planning and frugal living I could recommend to you.

On the other side of the ledger, let me say this. There is a lot to say for "social acceptance" in our society, and a lot of "social acceptance" depends on things like the clothes you wear, the car you drive, your appearance, etc.

Now, if you read more books about the rich and how they conduct themselves, and I particularly mean the "old money rich" or people who not only have money but have had it in their families for some time (as opposed to the "new rich"/nouveaux riches, who are often show-offs), you'll find that they often purchase "classic" clothes or "classic" cars and the like, i.e., things that are timelessly in style and that can be kept for a long time and will always be in style. So they don't necessarily spend a lot of money on these things, they are just very careful about what they buy.

I guess another way to put this is that there is a "happy medium" involved in purchasing and owning/maintaining things like cars and clothes.

 

[SeaSiren]

Quote:

Originally Posted by Joe

There are lots of books on budgeting, financial planning and frugal living I could recommend to you.

Oh yes, please do!

 

[Dirty Martini]

Your Money or Your Life is a good one for starters

 

[Joe]

Quote:

Originally Posted by SeaSiren

Oh yes, please do!

Amy Dacyczyn's Complete Tightwad Gazette is probably a very good place to start. It is written more from the perspective of a homemaker trying to make ends meet.

http://www.amazon.com/Complete-Tight...e=UTF8&s=books

Dave Ramsey's Financial Peace and related books.

http://www.amazon.com/Financial-Peac...e=UTF8&s=books

Ramsey comes at it much more from a financial planning perspective. He has some odd religious and political views that are touched on in the book, but just ignore those. Separate the wheat from the chaff. The core of what he has to say is quite good.

I've included the Amazon links so you could look at the book reviews, related books, lists, etc. But you could probably get these books out of the library (and save even more money).

The best comprehensive book on personal financial planning I've read is Jane Bryant Quinn's Making the Most of Your Money.

http://www.amazon.com/Making-Money-J...800760?ie=UTF8

The only problem with that one is that it is almost ten years old. her newer book is called Smart and Simple Financial Strategies for Busy People

and seems to cover the same territory of her earlier book.

http://www.amazon.com/gp/product/074...800760?ie=UTF8

 

[remilard]

Quote:

Originally Posted by Joe

They took out a mortgage like everyone else. But I later learned that they had enough money in their savings account at the time they bought the house to have paid cash for it.

In most interest rate environments everyone who has enough money to buy a house will mortgage them. It is called "borrowing from the cheapest source of funds".

 

[Tesseract]

My family is both Scottish and Italian and has always been frugal. The Italians also have quite a reputation for frugality, based on a very real history of living on a peninsula where the soil is poor and rocky, and poverty has been rampant for many generations. Italian cooking in particular is famous for remaking leftovers, re-using odds and ends of food, and making the most expensive part of the meal -- the meat-- go a long way. So I'm surprised Italians weren't also at the top of the list of frugal millionaires.

Then you have the influence of the Great Depression. My grandparents lived through it, and my parents were born during WWII. My grandparents instilled all the fears and insecurities of the depresssion plus the uncertainty of living through the way (though not in Europe) into my parents. I grew up on stories of my grandmother living on Chincoteague Island as a young housewife during the depression, buying quarts of oysters for 25 cents because they were cheap as dirt, and feeding the family nothing but oyster stew.

One biggie I've always heard is to drive your car for 10 years, rather than buying a new one every 3-5 years as so many people do. I agree with Joe on the principle of buying clothes to last 5 or even 10 years instead of buying for a season. The flip side of that is that you have buy good enough quality at the outset that it will last, whether it's a car or clothes. Hell, I have a wool suit and a suede jacket that must be a good 30 years old and belonged to my grandmother, and are still perfectly wearable... and still look good, too.

 

[troub]

i keep thinking this thread is saying

should have married a Scott. like someone named scott.

yeah.

 

[bstutzma]

I find that frugality is more often born of necessity than ethnicity.

I grew up "relatively" poor, for US standards. My parents struggled to buy us happy meals. I wore a lot of hand-me-downs, and never had name brand clothing, like "champion" or "the gap" (which were big when I was young.) I went to college, and paid for it myself, as my parents could not. I worked 2, sometimes 3 jobs. So yes, I know how to be frugal. I learned on my own. And now I've saved up a TON and am ready to buy a house.

I'm irish-american, btw ;-)

Seasiren, if you have trouble budgeting, I would set up a savings account and have money automatically transferred from your checking to savings every month, so you never see half the money, and you learn to save better.

 

[SeaSiren]

Quote:

Originally Posted by bstutzma

I find that frugality is more often born of necessity than ethnicity.

I grew up "relatively" poor, for US standards. My parents struggled to buy us happy meals. I wore a lot of hand-me-downs, and never had name brand clothing, like "champion" or "the gap" (which were big when I was young.) I went to college, and paid for it myself, as my parents could not. I worked 2, sometimes 3 jobs. So yes, I know how to be frugal. I learned on my own. And now I've saved up a TON and am ready to buy a house.

I'm irish-american, btw ;-)

Seasiren, if you have trouble budgeting, I would set up a savings account and have money automatically transferred from your checking to savings every month, so you never see half the money, and you learn to save better.

I'm also Irish-American.

It's nice to see from your story that I probably can be taught!

I grew up the same way. No name brands, happy meals were unusual, I paid for my car and my college education. I also moved away at 16 and struggled just to buy food and have housing. The electric got turned off a few times as well as the phone. But that wasn't as hard as my GreatGram would have had, she would have seen more desperate times for long stretches. But she felt compelled to be frugal, it came easy for her. It doesn't for me.

I have a savings account, but don't feel I save enough and feel that I have bought into the American Lifestyle way too much already. I wish it came more easily for me. I imagine I need to learn better habits. I need to learn to live well within my means and be putting at least 20% of my income away in savings and investments. I'm self employed so the 20% varies from week to week, month to month.

They also had irish americans, english americans, etc in the book. They all had similar traits, such as the older cars and living in the lower-middle income areas. The Scottish were just unique in having a greater precentage as millionaires and also earning less then most of the other groups. Thus, the title of the thread.