Millionaire Women Next Door

Thomas J. Stanley

• Publisher: RosettaBooks
• Year: 2010
• ISBN:
  9780795314896
• Topic: Business
• Subtopic: Imprenditoria femminile
• Index: Business

The New York Times –bestselling author of The Millionaire Next Door reveals the spending and saving habits of financially successful women. Millionaire Women Next Door presents a variety of groundbreaking concepts involving the personality, lifestyle, motives, beliefs, and spending habits of economically successful American businesswomen. Most of these women report being raised in nurturing family environments. They were trained not only to succeed financially but also to be generous in giving to noble causes. Stanley asks, "How did these businesswomen become millionaires? They did it by doing more of the key activities and achieving better results than most of their male counterparts." Praise for Thomas J.Stanley's The Millionaire Mind
"A very good book that deserves to be well read." — The Wall Street Journal "Worth every cent... It's an inspiration for anyone who has ever been told that he wasn't smart enough or good enough." —Associated Press "A high IQ isn't necessarily an indicator of financial success... Stanley tells us that the typical millionaire had an average GPA and frugal spending habits—but good interpersonal skills." — Entertainment Weekly "Ideas bigger than the next buck." — Orlando Sentinel

III.

About Their
Benevolent Nature

CHAPTER 7

Generous and Wealthy?

PRIORITIES ACCORDING TO MRS. E.

Like most of the other women profiled herein, Mrs. E. is a successful, self-employed business owner. In her mind, success is more than being financially independent, more than earning a sizable income, and more than the pride, ego enhancement, and high self-esteem she experiences as the owner of a very productive management consulting firm that counsels senior officers of prestigious firms. It’s even more important than the respect and accolades she often receives from various trade and professional associations. According to Mrs. E., success also means having the ability to share the wealth and support noble causes. How can one become financially secure and still donate considerable amounts of one’s income, time, and energy? Allow Mrs. E. to answer this question.

It’s possible to do well financially and to do good things for others; these are not mutually exclusive goals.

Mrs. E. was raised by parents who taught her to be charitable and include charitable giving in her household budget and financial plan. They were frugal, and they imparted that virtue to Mrs. E., who can afford to purchase just about anything offered in the consumer market because of her extraordinarily high level of income and wealth.

Her parents also trained her to deal with success. Both her mom and her dad were religious and very generous, and they told their children countless times, “Always celebrate your success first by helping those less fortunate.” It is for this reason especially that Mrs. E. has been able to achieve financial security and, at the same time, give generously.

Yes, Mrs. E. was raised to be different from most people in our hyperconsuming society. They look at an upswing in their cash flow as an economic opportunity to acquire more and more consumer artifacts. What’s the first thing that pops into your mind when your boss gives you the great news? Maybe he says, “Johnson, you will be receiving a $10,000 end-of-year bonus.” Or: “Calhoun, you just made partner. Gone are your days of earning $50,000 a year. As partner, you will receive at least $250,000 annually.” Most likely, the first thing that Johnson and Calhoun think about is buying a home or a new car, or going on vacation.

It’s very predictable. An increase in cash flow generally translates into significant increases in consumption. Is it any wonder that only a small portion of Americans are financially independent? We have been well trained in how to dispose of cash. Yet some people, like Mrs. E., were trained to respond in a different manner. She invests more and gives more at peak economic periods of her career. Mrs. E. was well trained by her parents to always be very humble. Mrs. E. is, in fact, very successful in business, but she receives no satisfaction from purchasing so-called luxury goods. Mrs. E. does not need to brag. She feels no compulsion to conspicuously display the trophies and related status artifacts that supposedly denote success in this country. Mrs. E. allocates her hard-earned dollars in another way: she gets a great deal of satisfaction from donating a substantial portion of her income.

Mrs. E. believes that a significant component of success is one’s ability to give more, to increase the percentage of one’s income that is donated to noble causes as one’s income rises. Do you want to be successful? Then follow Mrs. E.’s suggestion:

Be generous and gracious with what God gives you.

Mrs. E.’s interesting philosophy about wealth says that much of it is on loan from God, and clearly it is not accumulated in a vacuum. Success comes from standing on the shoulders of others, including parents, professors, and employees. So Mrs. E. believes that wealth should be shared if only for the simple reason that many shoulders, in addition to the millionaire’s, created his or her wealth.

Perhaps you are thinking that Mrs. E.’s “others,” specifically her parents, were wealthy and that she inherited more than a strong eleemosynary orientation. Perhaps Mrs. E. is one of high society’s contributors. Sorry; Mrs. E. does not fit this profile. She inherited very little in terms of wealth, but she received many other more important things. Her parents molded their daughter into a leader and placed great value on her becoming an independent person. They taught her to be a caring and forgiving person and to have strong religious faith. Mrs. E. tells of the values her parents instilled in her:

To establish and maintain a lifelong commitment to core principles… honesty; integrity; respect for others…. Keep your priorities in order with family and faith at the top of the list…. Know the difference between justice and righteousness and understand the role that each should play in your life and the lives of others.

By now you may have a good grasp on understanding the character of Mrs. E., but a bit more information will likely be valuable. Our society has not always been kind, economically, to women or to people of color. Only about one in ten of the million-dollar businesses (judged by gross annual revenue) operating in America are owned and managed by women, and blacks and Native Americans overall account for a disproportionately small percentage of millionaires in this country. As a forty-eight-year-old woman of color, Mrs. E. has defied many probabilities to become a millionaire business owner. She does fit one piece of the statistical profile, however. Like others in her cohort, she is part of one of the most generous groups in American society:

Out of twenty-six ancestry groups studied, African-American women gave a significantly higher proportion of their annual income (10.1 percent) to noble causes. The average overall for successful women business owners in general is just under 7.0 percent.

You can imagine that it was not always easy for Mrs. E. to achieve. Even today, there are far too many negative stereotypes about the abilities of women, Native Americans, African-Americans, and others. While Mrs. E. was growing up, people were not always kind to her. Far from it. But her parents instilled in their daughter the strength and resolve to overcome the biting comments and hurtful exclusions. Mrs. E. suggests to those who want to succeed:

Do not make popularity a goal… but always be confident in who you are, what you stand for; and in what you believe.

In many ways, Mrs. E.’s success in life is the product of her positive view about life, her happiness, and her enormous ability to forgive. Mrs. E. never expressed one word that even hinted at hating or getting even with those who tried to degrade her, and she is anything but a cold and callous person. Mrs. E. is a woman of great compassion, integrity, courage, and character.

Why did Mrs. E. take so much time to complete a lengthy essay on how young people can become successful adults? Note that she works sixty to seventy hours per week and is an active fund-raiser. She’s a single mom with all the related responsibilities, and she spends about five hours each week planning and managing her investments. She also has many other responsibilities and activities, including helping her older children start their own businesses.

All this and she took time out to tell her story. It’s not about boasting, and it’s not to enhance her own reputation. Mrs. E. is passionate about helping others achieve. It is one of her most important goals. She has helped mentor many ambitious young people. It’s all part of her philosophy of giving to others. She hopes that her profile and suggestions will inspire those who feel that the odds, the mathematical probabilities, are against them.

Always strive to do your best, and when your best isn’t good enough, find peace in knowing that you did all that you could.

It is amazing that women like Mrs. E. are often overlooked by noble causes. Imagine if fund-raisers asked her and others like her to use their skills to help write grant proposals. Yes, ask them to use their extraordinary writing and speaking skills for the cause. They could be formidable assets, but their potential is largely ignored by most charities.

YES! IT’S Generous and WEALTHY

Mrs. E. is not alone in her beliefs about giving and accumulating wealth. Cliff C. Jones wrote a book in which he discusses the multiple benefits that donors receive from being generous (Winning Through Integrity [Nashville: Abingdon Press, 1985]). He concludes that people who annually give at least 10 percent of their income to a noble cause are likely to: 1) gain much respect; 2) have more joy and happiness in their lives; and 3) encounter increases in their wealth and net worth. He contends that as part of the process of giving, generous people discipline themselves in terms of becoming astute managers of their income as well as their wealth.

Just what does the empirical data tell us about the relationship between giving and accumulating wealth?

Is contributing to charitable or noble causes a complement or a substitute in regard to accumulating wealth?

The answer seems logical enough. Consider these case examples: Tina Patron (TP) is a generous person, and she donates at least 10 percent of her income each year. Olga Price (OP) donates far less, at most 1 percent. All else—income, age, and several other wealth correlates—being equal, Olga should have a higher level of net worth, so logic suggests that giving to noble causes is a substitute, not a complement, to accumulating wealth.

Well, so much for college-classroom and economic-textbook logic. All things are not equal in such situations. My data from two groups of high-income-producing women suggest that giving and wealth are indeed complements, not substitutes. All those surveyed had annual realized earned incomes of $100,000 or more, and all were owners and managers of their own businesses. Each respondent was randomly selected from my national-survey database, and two groups, each containing survey data from 100 women, provided the empirical base for this analysis. As detailed later, on the average both groups were similar in terms of age and income.

The first group of 100 women was labeled “ten percenters” (TPs, Tina Patron types). They gave at least 10 percent of their annual realized income to charitable and noble causes each year. The second group of 100 women was labeled “one percenters” (OPs, or Olga Price types); they gave 1 percent or less. Thus, on average, TPs contributed $41,543, while their counterpart OPs contributed just $2,355.

You may logically conclude the OPs would have considerably more wealth accumulated. They are not “burdened” with doling out $41,543 annually. Again, so much for logic. In spite of contributing 10 percent or more of their annual realized income each year, the TPs have a higher level of net worth than do the OPs: $2.03 million versus $1.96 million (see Table 7-1).

TABLE 7-1
NET WORTH AND INCOME CONTRASTS: TEN PERCENTERS VS. ONE PERCENTERS

DEMOGRAPHIC CHARACTERISTICS	TINA TYPES Ten Percenters (TPs)	OLGA TYPES One Percenters (OPs)
Net Worth (Average/$000’s)	$2,031.9	$1,954.9
Annual Realized Household Income (Average/SOOO’s)	$254.9	$270.4
Net Worth per Dollar of Income	$7.97	$7.23
Age (Average)	51.9	49.2
Income as a Percent of Net Worth	12.5	13.8
Expected Net Worth^10 (Average/$000’s)	$1,322.9	$1,330.4
Ratio: Actual/Expected Net Worth	1.54	1.47

This variation might be explained if TPs had high...