In the United States, there are nearly 15 million millionaires. And while the images we often see of millionaires are of celebrities or flashy obnoxious people who try to impress others, most millionaires are not those people. The books The Millionaire Next Door by Thomas Stanley and William Danko, The Next Millionaire Next Door by Thomas Stanley and Sarah Stanley Fallaw, Ph.D. (the latter was a speaker at our Investment U Conference in 2019), and The National Study of Millionaires by Chris Hogan tell stories of everyday people who worked hard, saved ruthlessly, invested well and - perhaps most importantly - spent wisely. It's a simple formula that, when used properly, leads to great financial success... Work hard. If you're still working, doing your job to the best of your ability should result in increased income. If not, work hard at finding new opportunities. And if you're already retired, you can still work hard at educating yourself about money and investing. Save ruthlessly. This one is the toughest. Life is expensive. But you must put money away for the future. If not, whatever financial troubles you have now will be worse in your later years when you're dealing with increased healthcare costs and perhaps less income. And if you have kids in the house, showing them that you're saving will be the greatest financial lesson you can teach them. Invest well. You don't have to hit home runs and discover the next Facebook (Nasdaq: FB). Owning stock market index funds for many years generates substantial returns. Over the past 100 years, the market, with dividends reinvested, has returned an average of 10.5% per year. If you compound your money at 10.5% per year, $10,000 would turn into $27,140 in 10 years, $73,662 in 20 years and $199,925 in 30 years. And that's with no further contributions. If you're able to add $2,000 per year, the totals would be $63,218 in 10 years, $207,656 in 20 years and $599,673 in 30 years. (Use our Dividend Reinvestment Calculator to see what this would look like in your own account.) Spend wisely. This is the one that trips most people up and negatively affects their ability to save ruthlessly and invest well. Money you spend on something you don't need is money that is not compounding at double digits for years. I'm not saying to never have fun or never spend money on things that are important to you. Take the nice vacation when you've been working hard and eat at the nice restaurant on special occasions.
But be aware of where your money is being spent and see where you can cut back. It also helps to have a partner who is in line with your thinking on spending. If you're a saver and your partner is a spender, then you need to have some serious discussions on budgets and how you will both be spending your money.
I have many wealthy friends. Some have huge houses and expensive cars and live a lavish lifestyle. I'm genuinely happy for them. They earned it. They deserve to live how they want to live. But many people who would be considered "rich," especially those featured in the books mentioned above, live more modestly and focus on spending their money on family, activities that are meaningful to them and charity. For me, being "rich" has two simple meanings: not worrying about where my income will come from and knowing my family is taken care of. What does being or getting "rich" mean to you? I'd love to know. Share your thoughts in the comments section. Good investing, Marc | 
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