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Finance 1050
2/24/15
Self-discipline
Wasteful
3. In the example of Theodore Teddy J. Friend and his parents, answer the following two (2) questions:
List two reasons why Teddy is considered a UAW. 1)Teddy is the ultimate consumer
which makes him a UAW
2) Teddy works very hard for
expensive lavish lifestyle, but rarely
does not have time to enjoy what nice
things he has. Which is true of most
1
UAWs.
What was the message Teddys parents sent him They Taught Teddy to be an ultimate
about consumer behavior? (Be specific)
consumer by the example of spending
what one earns.
What was the small change Teddys parents Saving and having an understanding
could have made that would put them in the of the stock
millionaire category?
market and investing would have given
them the edge possibly putting them in
the millionaire category
4. In the example of Mr. W.W. Allan, answer the following two (2) questions:
He never extended credit to people who exhibited Mr. Allan believed that these
the Big Hat, No Cattle philosophy. Why?
individuals would spend and purchase
items with money they had not earned
yet.
He was concerned about what his
employees would think and that he
could not take it a Rolls-Royce fishing.
Ultimately he didn't believe there was
anything special about it.
5. Regarding Economic Outpatient Care (EOC), answer the following four (4)
questions:
It is when a parent gives the adult
children money. These individuals
are often UAW's.
Self-Made
Live below your means, no matter
what your income is. Spend less than
you make and invest wisely.
7. Now that you have finished reading The Millionaire Next Door, answer the following three (3)
questions in a minimum of three (3) paragraphs.
How has your perception of millionaires changed?
What are the two (2) concepts you found most useful?
How will you apply them into your life?
The Millionaire Next Door
Who would have thought that most millionaires were regular, down to earth individuals?
Individuals who are often self-disciplined, savers and more times than not, frugal. Many the self-made
millionaires drive used cars, and live well below their means by living on a tight budget. I now
understand that my perception of what I believed a millionaire to be, is really that of an under
accumulator of wealth (UAW) or an individual who lives the Big Hat, No Cattle lifestyle. Basically,
the UAW are the ultimate consumers working to be able to spend, so they can prove their status.
To my surprise most of the millionaires worked hard for the wealth that has been obtained. These
individuals show great strength by trusting their financial advisers and their spouse. Investing in their
financial portfolio and also in their family. I would not have imagined that a large majority of
millionaires have been married and committed to the same partner for many years. Many millionaires
pushed their children to work hard and excel rather than giving their offspring an easy handout. They
teach their children that immediate gratification is not always the best. I think this is great! I work
very hard to put my family first. My focus is on teaching my children by example that wealth does not
come easy and more importantly that it does not come from credit.
The concept I learned the most from, is having a true understanding of what separates the
prodigious accumulators of wealth (PAWs) and the under accumulators of wealth (UAWs).
Understanding the true concept of what being wealthy is vs. the image of a Big Hat, No Cattle
brought much enlightenment. As I read the book, I quickly identified with the UAWs. I felt rather
defensive knowing that I am the ultimate consumer, just on a small budget. I tried to rationalize my
hyper consumption lifestyle and justify my spending. I understand and know making excuses will not
bring change. I started taking note on what the PAWs did differently, so I can make small changes in
my life. It is important to me that changes be made. I want my children have a different example
modeled for them. My hope is that they will recognize that with sacrifice, there is much to gain.
The second concept I felt was very valuable and something I have apply in my own life is
creating a budget, this gives my husband and I a clear understanding of where all of our finances are,
accounting for every dollar. I understand that it takes time to do learn how to change our consumption
habits, so we have opted to set small goals in hopes to reach our larger goals. I know that we will need
to reevaluate our goals periodically. I trust this will help us stay focused and direct changes as needed.
I believe that the little steps will lead to larger steps and I will leave a legacy for my children that was
not left for me.
Reflective Writing
This E-portfolio assignment based around the book The Millionaire Next Door has challenged
my perception in many ways. It has pushed and engaged my skills of communication, as well as
enhanced my skills of working with others in a constrictive manor.
Although this project was based around reading a book and answering several questions, it was
so much more than that. This assignment very much challenged my understanding and appreciating of
human differences. It transformed my narrow understanding of what I perceived a typical millionaires
to be. It help me think thinking creatively, closing a gap cross culturally by breaking down my
perceived Big Hat, No Cattle image, forcing me to take a step back and evaluate my own life.
Upon completing the reading portion of the assignment, I brought my thoughts and concerns
regarding our consumer habits to my husband. After several discussions, we exchange different ideas
and thought that we believed could form a balance and would worked for our life. We evaluated our
goals and our desires by using effective communication. We then put into action our skills by working
together to create our, short term goals, long term goals and a financial budget. Knowing that we must
understand and work together to reach a common goal. We even included our children in this process
allowing them to set goals. Using the skills of communication and the skills of working together we
hope to gain a financial freedom we have not yet experienced.