Summary: The Millionaire Next Door – Part 5 Hi this is Stuart Zadel and I wanna welcome you, as we continue our journey into The Millionaire Next Door and the factors that separate the Prodigious Accumulators of Wealth and the Under Accumulators of Wealth, as referred to by research by Stanley and Danko. This is video Part 5 of an eight part series, and I highly recommend you check out the first parts, as each part of this video series builds on each other and you’re gonna need all seven factors to make it, and make it well in this lifetime. Now, you will recall in the last video, we discovered the fundamental difference in the belief structure of those that are more financial, is that they believe that financial independence is far more important than displaying high social status. This week, we’re gonna talk about what’s called Economic Outpatient Care. That is, receiving financial support from your parents. You see, what happens is when most people make it when they become Prodigious Accumulators of Wealth, and they have a family, they feel compelled, even obligated to provide financial support for those children. I remember when I was in high school- one kid, their parents bought him a brand-new car. That was unheard of in my school. We though, holy smokes, he was so lucky! Well, I’m not so sure now that I read the research here. You see, the research shows that the more dollars you give your children, the fewer dollars they will accumulate. Conversely, the fewer dollars a child is given, the more dollars they will actually accumulate. You know the saying, “if you give a man a crutch, you give him a limp.” Well, I’d like to say: “if you give a person financial crutch, you will give them a financial limp.” We have a large number of people now displaying a high socio-economic status. They are displaying it. But what you don’t realize is this is supported by Economic Outpatient Care. That is cash gifts from their parents. These people are living a complete façade. And it’s interesting: they even believe that their parent’s wealth already is their own wealth, which I find interesting. In fact, in over forty six percent of cases according to the book, Affluent Families- research based in the United States give their children more than fifteen thousand dollars per year, in cash gifts or the equivalent. Now, this might come in as stamp collections or coin collections, it might come in paying for their dental or medical expenses, it might be deposits for houses. There was a whole raft of stuff. Now, there is one case which we’ll get to in a moment. But I think it’s really interesting. The children when surveyed, grossly under-estimated the amount of money they were actually given in support from their parents. And when the parents were interviewed, turns out they gave them a lot more than the children ever reported, which I find really interesting. So, in most cases these parents thought they were giving their child and they can now make up a leg in life. A kick-start, a help that they thought that they could ignite and that they would go on and be financially successful. And the truth is, that’s just not the case. In most cases, all they did was make these people, theses adults, economically dependent. Now, we’re not talking about down and out people. We’re talking about people that are actually doctors, and lawyers, and accountants, and they are high-class professionals anyway. And they are still being funded by their parents which I thought was interesting. Now, the one caveat is the book does differentiate between parents providing for the financial education of their children. They often do pay for their higher education, be that in any form- courses, or even tertiary education. And many of these people go on to become self-sufficient, professionals in their own right, be that doctors, accountants, or lawyers, all that sort of stuff, and do go on and become successful. However, the research does report in 80 percent[...]
