Category Archives: Personal development.

How to save money and time by cutting your own hair

Alain cutting his own hair
I save about $150 per year, plus the trip to the barber and the waiting time.

Autotonsorialist: (Noun) One who cuts their own hair.

I have been cutting my own hair for about two years now. This is how it all got started:

I used to love my barber. His shop is located only 5 minutes away from my apartment. I used to pass right in front of his shop and if there was no waiting line, I used to get in and get a haircut in a few minutes. His price is only $13. He’s fast, friendly and he has this ability to make anyone feel at ease.

My friend Raja has it easy, he probably can cut his hair with his eyed closed

But all good things come to an end. His shop started getting busier and busier. Now there is a waiting line just to get in and if I want to see him, I have to plan for 30 minutes of waiting time.

One day, out of frustration, I went to the hairdresser across the street. He took care of me immediately, but his haircut was $35 and in no way any better. I paid three times as much for nothing extra.

I went right from the hairdresser directly to the pharmacy store and I bought a hair cutting kit ($35). How hard could it be to cut one’s hair?  With a short clip, I cut the sides and the back and with a longer clip I cut the top.

I made my money back by the second haircut. The benefits were numerous. I save about $150 per year in haircuts. I also save the time. I don’t ever have to wait for service. I unbox my clippers and start cutting away. The whole thing takes me about 5 minutes to cut and 2 more minutes to clean. In addition, my hair always looks freshly cut and I have a sense of pride after doing each haircut.

Natalia cutting her own hair.
Natalie has been cutting her hair for 15 years now. Assuming a savings of $300 per year at 6% rate of return, she has saved $7,400

The only drawback is that I am limited to only one style. I don’t know any other cuts than short on the sides and long on the top.

I noticed that my friend Raja also cuts his own hair and I fell a sense of comradely with him. But also, at my new year’s party, while talking to a girl, she told me that she too cuts her own hair. I was intrigued and I asked my Facebook community. I found out that several of my female friends also cut their own hair. Here are pictures of Natalie and Annie.

If you are a woman, the savings can be significant. One of my female friends pays $50 for a haircut, if she gets 6 haircuts during the year, she is down $300. This money could be put to better use, either saving it or going to the restaurant with friends.

Have you ever heard of the Pink Tax? Many products or services are marked up when they are targeted to women. Haircuts is one example, but also razor blades, shampoos, conditioners, shaving cream, girls bikes, etc. have a bigger markup when marketed to women.

If you have never cut your own hair, I suggest you give it a try. If you screw it up, what’s the worst that could happen? It will always grow back. It won’t be the end of the world. On the other hand, if you succeed, you will save lots of time and money.

Annie cutting her own hair.
My friend Annie. You should see her in person, her hair is gorgeous.

If you are a woman, here is a video that can show you how to cut your own hair.

If you want to share your experience cutting your own hair, please send my a message or share your experience in the comments.

Coaching services

I am a money coach, don’t hesitate to write me if you want to talk about money or anything else that is going on in your life.

How to deal with financial setbacks

Another speech at Toastmasters
Another speech at Toastmasters

A few days ago I had to confront a few financial problems at once. I felt cornered and I didn’t know how to react.

This is what happened:

  • One of my clients asked me for some of his money back: $5,000. Instead of selling $5,000 in stocks, I paid him out of my pocket and kept the stocks invested.
  • I rented one more apartment to grow my Airbnb business: one month deposit $1,500 and one month rent $1,500.
  • One of my apartment rentals was infested with bedbugs: $2,000
  • I was under the impression that one of my Airbnb properties had bedbugs (it turned out that it had little spiders that looked like bedbugs) the lost revenue and the expenses: $1,000
  • I had car repair expenses of $1,500

In total, in a matter of two weeks, my bank account was shrinking by $12,500. I felt that the whole world was about to swallow me. I am not a stranger to setbacks. I face small setbacks regularly, but I was not ready to face numerous problems coming at me in such a rapid succession.

I read somewhere that in cases of stress, our reptilian brain takes over and we have one of two reactions: fight or flight.

When I was confronting my problems, my reptilian brain suggested flight. I wanted to throw money at the problem and get out of everything I was doing.

I felt afraid; it took me a few days to get my bearings and to realize that all my difficulties were only financial, that my situation was not catastrophic. Once I put my problems in perspective, I took the following steps:

Steps to overcome setbacks
  1. Seek inspiration from leaders who have overcome difficult times. I love reading biographies of businessmen and political leaders. Some examples are Rockefeller, Gandhi, and Mandela. But they are back there in history, way in the past, they feel more like mythological figures than real human beings. The US just went through the most amazing presidential election. They elected a person that I (and everyone around me) loves to hate, a person who is a sexist, a bigot, a racist, a bully, and so much more. Yet this person, against all odds, went on to become the president of the US. Even if I see him as an asshole, this person has one trait which I admire – his willingness to fight. Each time someone put him down, he stood up and fought.  I want to have that fighting spirit.
  2. Think of the worst case scenario and put it in perspective with the rest of your life. I was facing a significant loss, but when I put it in perspective with my net worth and with other problems I have faced in the past, I realized that my problems were not big at all.
  3. Share your problems with friends and family. For days I complained to my friends, to my mother and then I went big by announcing my difficulties on my Facebook profile. Just by expressing my problems to those around me, they became bearable.
  4. Get a good night sleep. This is more difficult than it sounds. My sleeping was cut from 6 hours to 5 hours, but as the days passed my problems seemed more distant and I felt stronger.
  5. Exercise. Exercise is a wonderful drug. It releases endorphins from your brain which makes you feel good, it increases body temperature, which has a calming effect and finally, it helps you sleep better. I never abandoned my daily exercise routine.

As I dealt with each one of my challenges, I became stronger and wiser. I will replenish my bank account and prepare myself for the next wave of setbacks (they will never stop). Next time I will be ready for bigger challenges.

Please feel free to add in the comment section how you deal with financial or emotional setbacks.

I am a money coach, don’t hesitate to write me if you want to talk about money or anything else that is going on in your life.

Developing a wealth mindset

Money Coach
developing a positive minset
developing a positive mindset

About two years ago I started a money coaching business.  During that time I noticed that most people’s financial success or failure depended on their mindset. In general, if they had a mindset of wealth, most likely they were wealthy. If they had a mindset of scarcity, most likely they struggled.

Throughout my years of reading and asking questions I have become convinced that our mindset is developed in our of childhood. One simple incident could be the tipping point that swayed us from one mindset to the other.

For example, make believe you are a 7 year old kid and you lived one of these moments:

  • You are best friends with the kid next door. His father gets evicted because he is constantly late with the rent. Your mom says that the landlord is a rich asshole who only cares about money. You associate being rich with being an asshole. You feel contempt towards rich people. You will never want to be like one of them.
  • Your rich uncle gave you some cool video game for Christmas plus two concert tickets to see your favorite music band. How cool is that? One day you would want to be as cool as your uncle, make a lot of money and give to other people.

These are simplistic general examples. Many times a child is exposed for years to similar incidents before his personality is formed.

If you end up being like the kid with the negative experience, you might have a psychological barrier towards building wealth. You would say to yourself “money is not important, what is important is developing houses for the poor.” and maybe, even if opportunities fall in your lap, you pass because you will always have the association of money and rich assholes. Even if you have a job with a high paying salary, you might get rid of your money as soon as you get it and might experience the magic of compounding interest.

Being rich and helping others are not mutually exclussive

If you are like that kid, you have to realize that being rich and helping others are not mutually exclusive options. If fact, if you are rich, you are in a better position to help others. If you feel guilt because you are better off than many others, you can volunteer some of your time to cause you care about or donate part of your salary to your favorite charity organization.

If you are tired of living a life of scarcity, it is of extreme importance to understand what is holding you back. Go back, deep into your subconscious and try to understand  the series of events which led you to develop your current mindset.

Money is not evil

Your financial life could be in jeopardy only because during your childhood someone said “money is evil” or “rich people become rich by taking advantage of the poor.” Yes, there is some truth to that, some people abuse their wealth. But money is also a tool to create good. People like Bill Gates are out there, using their money to save lives in Africa. There are millions of honest business people building small businesses which create jobs in their communities.

The sooner you realize the source of your self defeating thoughts,  the sooner you might address the problem and the sooner you will be able to create wealth for you, your family and your community.

Halloween is coming, let’s act as if…

Acting as if I was a professional speaker
Acting as if I was a professional speaker

What are you going to dress up as?

Halloween is coming. Many of us go to the store looking for costumes last minute while many others know, months in advance, what costume they will be wearing. The big night arrives, we put our costume and assume the persona of our character. If we dress up like Dracula we act like Dracula, if we dress up like a witch we act like a witch.

We no only dress up, we also act as if…

For most of us, we participate in Halloween to have fun and we assume a personality other than our regular self. We dress like a particular character and in some ways, psychologically, we become that character. Have you ever seen a kid dressed up as Superman, or Batman? All of a sudden they are full of self confidence and they are ready to save the world. They believe in justice and equality and they hold their persona to a higher moral standard.

Dressing up and acting is not restricted to Halloween

But it is not only during Halloween when we dress up and assume a different persona. While having lunch with a friend, she was telling me that when she dresses well and puts on high heels, she feels more confident, more powerful. Me too, when I put on a suit, I feel more assertive and self confident.

Kate Stern, style coach and writer at, says that the way you dress tells other people how you want to be perceived. “Confident, successful people often use a sharp appearance to their advantage. Just ask yourself which person will attract more positive attention: the one whose look says powerful and professional, or the one whose outfit is bland and timid? If you want to get better results in life, learn to dress well. And as for having the confident personality to match: fake it ’till you make it.”

Act as if… for one week

What about if, for one week, this coming week, we were to dress up psychologically and act as if we were the person we want to be. Maybe we will act as if we had more self confidence, act as if we care about our health and go out for a run, act as if we were interested in learning and read a book, act as if we cared about our job and arrive on time, act as if we were full of ambition and do something to show how ambitious we are, act as if we care for others and perform many random acts of kindness.

William James, an American psychologist once wrote: “If you want a quality, act as if you already had it.”

OK, let’s do this:

  1. Visualize the person you want to be. Do you want to be happy? Do you want to be a person with better eating habits? Do you want to be in better physical shape? Do you want to be better educated?
  2. Study other people who you admire who represent that character. Let’s say that you want to be in better physical shape, read about others who are in good physical shape and figure out what they do. Let’s say you want to be a better business person, read about other successful business persons. I recently read the Autobiography of Benjamin Franklin and decided to model some aspects of his life.
  3. Find out what the daily habits are that you need to integrate into your life: watch less tv, do some meditation, do some daily exercise, stop eating junk food.

As you practice your new persona and  perfect it, you will believe you are that new person and soon you will no longer be pretending, you will be that person.

Happy Halloween.

How to be a failure

I chose my friends carefully.
I chose my friends carefully.

I have been writing this blog for about three years now, and so far all my articles have been about self improvement; how the earn more money, how to acquire more success, etc. But after taking some time to think  I realized that during most of my life I have been a failure and that I am better qualified to share my knowledge on how to be a failure than how to be a success.

Here are my secrets on how to be a failure:

It’s all about your mental attitude. You have to have a Negative Mental Attitude. If you have a negative mental attitude you are half way there. Just close your eyes and imagine the worst case scenario for everything. Whether you think about love or business, if you imagine the worst case scenario, there is a good probability that it come true.

But it’s not all about your mind. It is also about your body. Do you know how difficult it is to eat healthy? All that organic food is expensive. Any kind of natural smoothie will cost you between $5 to $10 and many of them taste horrible. Instead you can buy a liter of Coke for for about $1. And who wants to spend time preparing healthy salads when you can have Doritos with Salsa. There are a lot of nutrients there. All those cheap meals have lots of calories you need to survive, they are accessible, and let’s face it… they taste good.

How about some exercise? Physical activity is painful. Just stay on your couch. You will be safe there. I have broken my jaw practicing karate, I have damaged my ligaments lifting weights. Even physical activities like dancing salsa can be dangerous. I met this guy who broke his partner’s nose while dancing salsa. Just stay on your couch — you will not get hurt.

What about your friends? Motivational speaker Jim Rhon says that “You are the average of the five people you spend the most time with” So I choose my friends carefully. I try to find friends who are dumber than me, that way I can always feel like the smart one.

And last but not least: Procrastination. Always leave the important things for the last minute. That way, if you fail, if you do a horrible job, you can always use the excuse that you did it all at the last minute.

Good luck being a failure, please write back and let me know how it turned out for you.

Superpowers I acquired at Toastmasters

The superpower of building a community
The superpower of building a community

I joined Toastmasters in October 2014. I have this dream of becoming a professional public speaker and I had heard that Toastmasters would give me the training which would allow me to make my dream come true.

Today I feel that I am still far away from being a professional speaker, but I know that every time I give a speech I am a bit closer.

In the process of learning how to become a professional speaker, I have acquired some superpowers which I want to share with you.

In our competitive society, sometimes we need an unfair advantage in order to realize our professional or personal objectives. The superpowers I am about to share with you will improve your personal and professional life.

The Superpower of Public Speaking

Imagine that you are applying for a job. You and five other people with similar experience and education are the final candidates. Many of the questions you will be asked during the interview are simple: 1. Tell us about yourself. 2. Tell us why we should hire you and not the others… These are open ended questions. Who do you think will give a more compelling answer? The person who has practiced public speaking for over a year or the person who has never spoken in public. I would put my money on the person who has acquired the superpower of public speaking.

Public speaking could get you the job that you want and it can help you get a salary increase much faster than your colleagues.

The Superpower of Leadership

This is an amazing super power. When you are a good leader, you inspire others to follow your vision. To be a leader you need to be a good communicator, and you have to have a clear vision of where you want to go and where you want to take the members of your group. Leadership is a skill which can be learned and Toastmasters offers many opportunities to learn and practice this fantastic skill.

If you become a good leader in your family, in your community, and in your job many people will follow your vision and will help you realize your goals at the same time as you help others realize their goals.

The Superpower of Building Communities

Spending time with family and friends, and being of service to others are the activities which give us the most happiness. When we create a community of people who share our vision and goal we feel fulfilled and our chances of success are magnified.

When you build a community, you build trust among your peers, you have more human and physical resources, and you create  much deeper relationships with the members of your community. Communities are powerful.

At Toastmasters we strengthen our community by meeting regularly, by having dinner together, by organizing potlucks and BBQs and by creating many other activities. You can take some of these ideas and apply them to your circumstances. When you have a strong community with a similar vision, your options are endless.


The positive effects of these superpowers are difficult to measure but their benefits can drastically improve your life. After three years as a Toastmasters member my life is so much better, I feel more confident and I feel that doors are constantly opening in front of my eyes. Give it a try and let me know how it works out for you.

The slow track or the fast track to wealth

In our first world economy, we all have the potential to become wealthy. But is that what we want?

What is the role of wealth in your life?

Becoming wealthy is not everyone’s priority.

Some people think about love, beauty, sports, sex, dance, fashion, etc. They are committed to their goals and for them, they just need enough money to continue working towards their goals.

Many people don’t have any goals, they are social lemmings who live their lives without a sense of direction, they just follow what everyone else is doing.

For some other people, wealth takes a front seat, they believe that everything else will become easier if they are wealthy.

The two tracks to wealth

For those interested in building wealth, there are two tracks. The slow track and the fast track. Which track you take depends on your priorities, your ambitions, your self-confidence,  and your willingness to put in the work.

What is the slow track to wealth?

The slow track to wealth is to become wealthy through working a regular job and saving for decades. This method has proven to be reliable. If you work a regular job, save every month and invest in low-cost index funds or ETFs, it is almost guaranteed that you will become wealthy.

Let’s do a quick example. For this example, let’s ignore the effects of inflation.

Let’s imagine that a person saves $5,000 per year and he/she gets and average return from the market of 8%. How long will it take this person to become a millionaire?

It will take 36 years to accumulate $1,000,000.

To save $5,000 per year is not that difficult, practically anyone can do it, but most people are conditioned to spend, not to save, therefore very few people will become wealthy even though it is within their reach.

With one million dollars, a person can spend about $80,000 per year  for the rest of their lives without running out of money. The slow track is not bad at all.

What is the fast track to wealth?

Most people who become millionaires, they do so by creating  businesses or by investing in real estate. They take risks and responsibilities that others are not willing to take. They have a vision of where they want to go, they eliminate all the excuses and work relentlessly towards their goals. A fast track business should make you wealthy in 20 years or less.

I will give you an example:

I am in the Airbnb business. I have an apartment which I rent via the Airbnb website. If my goal was to become a millionaire as fast as possible, I will be able to do it without too much difficulty. I earn about $1,000 per month with one property. If I were to get an additional  Airbnb property every 4 months, by the end of one year I would be earning $4,000 per month. By the end of two years, I would be earning $8,000 per month. By the end three years I would be earning $12,000 per month. On year number three I could be earning $144,000 per year. If I spend $44,000 on my living expenses and invest the other $100,000, I could be a millionaire in less than 10 years.

I don’t have to be a computer genius and I don’t have to spend half of my life getting master’s or doctorate’s degrees. I could simply become a millionaire by running a business which doesn’t require much brain power.

This is just an example of how easy it is to become a millionaire. Many people who become millionaires have simple ideas.

We are masters of our destiny

We are not helpless. We can take control of our destiny any time we want. If we wish wealth, wealth is there at our feet. The only obstacles in becoming wealthy are self-imposed. Financial success is only limited by our lack of imagination.

How to get the most happiness out of your money

How much is this moment worth?
How much is this moment worth?

Money can buy a lot of things, but to have a lot of money in your bank account should never be the main objective in your life. Once you have covered your basic needs of food and shelter, your most important objective should be to be happy. So how do you get the most happiness out of your money?

Here is what I have learned through reading and personal experiences.

Buy experiences, not things

I am a member of a club called McGill Toastmasters. It is a club devoted to learning speaking and leadership skills. We meet for two hours once per week and it costs me $12.50 per month ($1.56 per hour). In exchange I get a fantastic learning experience, I get lots of entertainment, and I get to network with many interesting people who have become close friends. The $12.50 I spend every month is one of the best purchases of happiness in my life.

I met my friend Cheryl about 10 years ago (2006). At that moment I discovered that she had been going to the same coffee shop every morning for many years. At that time I was reading The Automatic Millionaire. David Bach, the author, writes about “the latte factor.” He explains that if we save the amount that we spend on lattes, we can all become millionaires. When I explained this concept to Cheryl and suggested that she stop going to the coffee shop she was taken aback. She explained to me that it was not about the coffee, but about the experience of having a coffee in a place that provides so much happiness. For Cheryl, this is one of the most precious moments of her day. She is investing in an experience and she is getting a great return for her money.

You don’t have to spend much money to buy a beautiful experience. You can spend time with friends at the park, at the bar or at a restaurant. It’s those memories with your friends which will bring a smile to your face, not the latest gadget nor the latest clothing item.

Buy time

The glorification of “busy” is over. At one time I used to admire people who were always busy, now I admire friends who take time for themselves and for their friends. Many of my friends have packed agendas from the moment they wake up until they go to sleep. Many of these friends have high paying jobs. It is interesting to see how they have so many things but they don’t have time. Time to go to the gym, time to have a beer with a friend, time to sit down and watch a sunset.

At one time I was a workaholic. I used to work 10 hours a day, seven days a week. I had money but I didn’t have time. Now, I work part time. I read books at the park, I meet with friends on weekends or weekdays. For me time is more valuable than money.

If you have kids or a spouse that you love, the most valuable thing you can do for them and for you is to spend time together. Go out for a walk, to the park, to the beach, to a dance event. In short give up some of your working hours to spend time with the people you love.


When my ex wife and I got divorced, I invited her to celebrate by going to Cuba. When my daughter got into a fight with her boyfriend, I invited her to Cancun. Giving to the people you love, is one of the most valuable sources of happiness. Don’t give because it’s Christmas or their birthday, give because giving is pleasurable.

Close your eyes, think about someone you love, or think about a cause worth giving to and show your generosity. You will thank yourself.

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Interview with Raja Chemani about entrepreneurship and self-reliance

Raja enjoying his free time

Canadian Hustler

This is the first in a series of 10 interviews which I am calling Canadian Hustler.

Since our birth, we are indoctrinated to believe that the 9 to 5 lifestyle is the only option to make a living. This indoctrination is so deep in our subconscious that when we don’t get a 9 to 5 job we feel destroyed physically, emotionally, and psychologically.

Having a drink. Cheryl, Raja, and Alain

Our lack of creativity, self-esteem and self-reliance makes us believe that if no one hands us a job we have no way of making a living. For this reason, we are always searching for approval, for diplomas, for certificates and many other forms of endorsements from the permission-givers.

People fight and beg for salary increases or government support because they don’t realize that they can take matters into their own hands. They don’t realize they can create their own salaries and be masters of their own lives.

With the intention of showing that there is an alternative to the 9 to 5 indoctrination, I have decided to interview 10 people who have taken control of their own lives, 10 people who don’t care about minimum wage nor government social programs because they have created their own jobs.

Raja Chemali

Raja was born in Lebanon. He came to Canada in 2007 and went to McGill University to earn a master’s in biomedical engineering.

As soon as Raja started working in his field he found that working in a small lab was tedious and stressful.

In a search for an alternative way of living, he opened an event production company where he invited guest speakers to share their knowledge. The business model consisted on charging people for the privilege of listening to the speakers. Due to the extraneous time and emotional demands, after some time, Raja gave up this business.

While developing the event production company, Raja was working as an independent contractor, knocking on doors, finding contracts for a landscaping company and keeping a 30% cut for his efforts.

The event production company was struggling and Raja needed more money to keep it going, so he decided to continue knocking on doors, but instead of giving the jobs to the landscaping company, he decided to do the job himself. This is how Raja started his present business Sparkle Window, a window cleaning company. Raja created his company in only two weeks and earned a few thousand dollars the first week.


Alain: Raja, How come your instinct pulled you towards creating  your own business, instead of looking for a regular 9 to 5 job?

Raja: I didn’t want to have a 9 to 5 job, that is not my type.

A 9 to 5 is not for human beings, we are not machines that can be programmed to work a certain amount of hours. Sometimes we can get the job done in one hour, sometimes we need 12 hours.

We are organic beings, our lives should not be framed into 9 to 5 blocks.

A 9 to 5 job kills our creativity, it kills the spontaneity of doing things we want to do when we want to do it.

We are the smartest creatures on earth, we should be able to find other ways of making a living other than the typical 9 to 5 system.

Many people don’t enjoy the 9 to 5 schedule, they do it because they feel trapped. They don’t know any other way.

Alain: Many people go to fancy universities to study 4 to 8 years to earn a degree which will help them make a living. And here you are, doing manual labor in a job that only took you 2 weeks to create and you are earning thousands of dollars. How do you feel about that?

Raja: Washing windows doesn’t identify me, I am a lot more than a window washer, I am a human being. My window washing business provides me with the money I need to live and enjoy life on my own terms. Our jobs should not determine who we are as individuals.

Alain: How do you find business?

Raja: I do some Kijiji ads, I keep my website up to date, but mostly I knock on a lot of doors to offer my services.

At the beginning, I wasn’t used to rejections, but then I accepted it as part of the business. Knocking on doors is like a muscle, the more I use it the stronger it gets.

Alain: How do you keep motivated?

Raja: Sometimes it’s difficult. I do it by switching off the creative and intelligent side of my brain and switching on the stupidity mode. I become an automaton.

I also keep myself motivated by thinking about upcoming projects or goals that I want to accomplish and how I am going to use the money to fulfill those goals.

Alain: How much do you make?

Raja: It depends on how much energy I put into it, on how many doors I knock on doors, but when I push myself, I can make up to $1,000 per day.

Alain: Can anyone create their own business or does this require a special mindset?

Raja: The system is designed to take all the creativity out of us and it doesn’t allow us to become human beings. We have the potential, creativity and intelligence to do anything we want but we are taught to obey, we are taught to take orders.

Everybody is an entrepreneur. Children are the biggest entrepreneurs, they believe anything is possible but the system robs them of that belief.

Self-doubt is the biggest barrier to entrepreneurship.

Alain: Which books do you recommend to your friends?


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Book review: The Millionaire Next Door by Dr. Thomas J. Stanley

Book cover. The Millionaire Next DoorBooks at great bargain

I bought this book at a second hand store for only $2. The regular price was $10.99. That’s an 80% discount for a book which is just as valuable today as when it was written in 1996. One of the millionaire’s habits is to constantly be on the lookout for good value.

The irony of Dr. Stanley’s death

Unfortunately Dr. Thomas J. Stanley (1943-2015) left us last year after a fatal car accident. He was a fantastic writer of business books. He wrote many New York Times’ best sellers including The Millionaire Next Door and The Millionaire Mind. The ironic thing about his death is that after a lifetime of pontificating abstinence and frugality, he died while driving his brand new, luxurious Corvette.

Having a beer with a few friends
Having a beer with a few friends

Are you a PAW or a UAW?

Dr. Stanley divides people in two categories: Prodigious Accumulators of Wealth (PAW) and Under Accumulators of Wealth (UAW). He creates this division by using a formula. He multiplies the person’s age, times their annual income, times 10%. If your net worth is above that number, you are a PAW. If your net worth is below that number, you are a UAW.

Let’s experiment, let’s see if I am a PAW or a UAW.

I’m 49 years old.
My income is about $18,000 per year.

49 old X $18,000 X 0.10 = $88,200

My net worth is about $150,000, so according to this formula, I am a Prodigious Accumulator of Wealth (PAW.) Yeeeaaahhh.

Try it! Are you a PAW or UAW?

The book goes on to describe the habits of millionaires and of people with high incomes who are not millionaires.

Dr. Stanley doesn’t tell us exactly the sample size, nor how he managed to have so much face time to interview all the subjects of his study.

I really enjoyed the book and I think everyone who wishes to be a millionaire should read it. It shares many of the principles and ideas that I am implementing to become a millionaire.

At the same time, I think that the book is highly deceiving favoring the romantic idea of a person who starts from a humble background and who through decades of self sacrifice, deprivation and hard work, becomes a millionaire.

Almost all the subjects covered in the book were self employed, white male, blue collar workers. In his samples, there were no females, no movie actors, no sport celebrities, no CEOs from big companies, no rich traders from Wall Street, no programmers from Silicon Valley or the equivalent from that time. Where were all those millionaires? They were nowhere because they don’t fit the ideal character which Mr. Stanley portrays in his book. Although I loved the book, it’s credibility is highly questionable.

Although I don’t believe the research, I believe that the lessons shared are of great value to anyone who wants to increase their wealth. Here are some of those lessons:

Spend less than you earn

According to the book, all the millionaires had frugal wives and they owe their wealth, in part, to the wife’s ability to cut coupons.

I am a deep believer in the “spend less than you earn” philosophy, but I think he could have found better examples than frugal wives.

Avoid buying status objects or leading a status lifestyle

There is a lot to say about this subject and there are many anecdotes to support it, but it boils down to spending less than you earn.

Willing to take a risk

Since most of the millionaires were business owners, they all took the risk of starting their own businesses. It’s hare to become rich when you depend on a salary.

Inter generational lessons

Dr. Stanley claims that sons of high consumers become high consumers and sons of frugal people become frugal. In short, your destiny is predetermined by the habits of your household. It is ironic that most of these millionaires were self-made millionaires from humble families. Yes, your family habits and background can influence your future, but all of the alleged millionaires overcame those odds.


Although the book is portrayed as  serious research, I see it more as a depiction of the fictional character that Dr. Stanley had of the ideal millionaire. All the millionaires of the book became millionaires for the sake of becoming millionaires. They deprived themselves from their own money during their whole life.

Here’s the story of Mr. Ronald Read a Vermont gas station attendant and janitor, who had a portfolio of $8 million dollars by the time he died at 92. He accumulated that much wealth by saving, investing wisely, and being frugal. Mr. Ronald Read never enjoyed any of his own money. This is The Millionaire Next Door.

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