This book showed me the importance of getting the best bang for your buck

Hey You,

It’s Lewis aka Nerd #2.

If at this point in your life, you aren’t financially free and you’d like to be, I say RUN – don’t walk to where you buy books and purchase…

Stop Acting Rich: How to live like a real millionaire by Thomas Stanley, famed author of The Millionaire Next Door.

Here’s a few reviews that sum up nicely what this book is about…

“If you’ve read the 1996 best-seller The Millionaire Next Door, you already know it’s hard to identify the truly affluent based on appearance. . . Now Millionaire co-author. . .Stanely is back with a dose of financial tough love for high-spending wannabes. . . offers surprising insight. If your goal is long-lasting wealth and not just the appearance of affluence, start reading ASAP.” (Better Investing Magazine)

“Thomas Stanley has written a fascinating book that is based on years of research into how the truly wealthy live. Stanley’s main contention is that those with millions aren’t among the nation’s hyper consumers. Rather it’s the “aspirationals,” those seeking recognition as members of the moneyed set, who are loose with a buck. It’s a hypothesis offered often, but the difference is Stanley’s research. He has packed his book with oodles of statistics — and not just the usual numbers. For example, 75 percent of millionaires pay $19.79 or less for a bottle of wine. When it comes to a dinner, 75 percent pay $24.53 or less and 95 percent keep the tab to less than $40. This is all fascinating stuff and Stanley presents it in a very readable style. Stanley has written two other best-sellers on millionaires. It seems he’s done it again.” (The Star-Ledger)

And the best review of all from a consumer who read it and reviewed it on Amazon.

“The central theme of this book is that there is a difference between those that are genuinely rich and those that act like they are rich. This book details the differences between these two groups of people – what they wear, drive, eat, drink, etc. These differences, presented throughout the book in the form of several tables and lists, are backed by empirical data that are drawn from the author’s extensive research on the affluent.

We live in a culture of hyperconsumerism. It is far easier to act rich than to become truly rich. All we have to do is to buy the luxury goods/services that we think the rich buy and we get the feeling that we are rich. But this kind of excessive consumerism is detrimental to our net worth. The author explains that most rich people become wealthy and stay that way by being frugal and by being investment oriented as opposed to consumption oriented. As for wealth and happiness he warns, “those who think that acting rich must be predicated on hyperconsumerism are likely to end up on the short side of both the wealth and happiness scales.”

Here’s a snippet from the book that lays out one of many examples of how this hyper-consumerism plays out…

 The Mercedes Millionaire

The headline of a full-page advertisement for the new Mercedes Benz E350 promised:

“More Horses. Bigger Engine. Increased Envy.”

Does the promise of increased envy sell cars? It must be a salient decision criterion for some car buyers. For them, the need to be envied may override more practical considerations although Mercedes Benz has not always received high praise for initial quality.

Last summer Daimler Chrysler recalled 680,000 vehicles. This month, it had to recall 1.3 million vehicles to fix electronics and more breaking problems – more than a years total production.

The major recall was not anticipated. Even by those in the automotive press. As recently as 4 weeks ago senior executives were extolling recent improvements in Mercedes quality.

“The situation regarding Mercedes quality is not as dramatic as has been reported,” Daimler Chrysler CEO said in a March 1st interview.

“The highest Mercedes quality ever!”

Consumer Reports reliability ratings of Mercedes are congruent with reported problems. In both it’s used car verdicts and new car prediction, several of the Mercedes models that had been studied, received worse than average or much worse than average evaluations.

A spokesperson responded to the evaluation that Consumer Reports made concerning the S430 model…

“Mercedes Benz doesn’t believe there’s a problem. The data used by Consumer Reports is volunteered by it’s readers, not verified, and does not correlate to our own data or that of other surveys.”

JD Power and Associates evaluates the quality of makes of vehicles 3 years after they are produced. Mercedes Benz ranked below average in regard to it’s 2002 model year vehicles.

According to Gina Chan, in the Wall Street Journal, “Mercedes has recovered some of the ground it lost in quality ratings. After dropping to 14th in the initial quality rating in JD Power’s annual survey in 2003, it rose to number 5 last year. But it’s ratings on long-term quality remain weak.”

What could hurt worse than receiving weak evaluations from American car buyers? Along these lines, where does the Mercedes Benz brand rank among the vehicle owners in Germany?

JD Power and Associates recently surveyed 22,000 German car owners. Below are some of the results of that survey…

Toyota Motor Corporation has the highest level of consumer satisfaction in Germany. The Mercedes Benz brand showed slight improvement, scoring more points than last year. But the company ranked 11th and just beat the industry average by two points – a sign the company is still recovering after quality problems dented it’s luxury image.

In spite of poor ratings, both in the United States and Europe, the people at Mercedes didn’t seem alarmed.

What if people who buy Mercedes use a set of buying criteria that are not included in JD Power studies – envy, prestige, emotional status, a legacy of quality and related variables may be key factors for certain kinds of buyers.

While the Mercedes brands were receiving ratings that were less than spectacular, US sales increased.

In 2007 Mercedes took the lead in luxury motor vehicle sales. Those with a sticker price of $42,000 or more – 189, 576. About 3 of 4 – 74.8% of those Mercedes Benzes sold in the United States in 2007 were true luxury.

In contrast, only 40.6% of the BMW’s and 32% of the Lexus vehicles sold, were in this luxury category. Mercedes was also the true luxury leader in 2008. Obviously, not all car buyers are influenced by the ratings.

Ranking #1 in the JD Power & Associates initial quality study may not be a priority for Mercedes Benz. The head of Mercedes car group stated, “The studies quality criteria may not be relevant to Mercedes international customer base.” One has to carefully analyze as to whether, as a global car, it is advisable to be the JD Power #1.”

NERD #2 NOTE: This Mercedes guy is a dip shit. How would it HURT to actually make a quality product – recognized and verified by an authority in a market where you sell 189,000+ vehicles? But I wonder if this illogical, rationalizing, lame attempt at spin influenced the owners of Mercedes who’d drank the Kool Aid and bought the car in the first place?

I don’t think it had to. The majority of people who’re buying these cars, wait, I mean financing these cars, are oblivious to their shitty quality because their car is serving as a band aid for their fear of rejection.

And hey, when your main reason for buying this brand, even if you can’t afford it, is to operate under the illusion that you’re being accepted, any chance you get to brag about your car, even if it’s bragging disguised as bitching about how expensive it is to fix your piece of shit car, is welcomed.

According to my survey data, millionaires who drive Mercedes are quite loyal to this make of vehicle.

They drive rich and are by definition actually rich. For many of them, the image that Mercedes projects is highly congruent with their self image as well as with many of their activities, interests, and opinions.

There is a very strong bond between the Mercedes mystique a certain type of millionaire. The Mercedes millionaire has a pattern of behavior that is predicated on his need to tell others about his wealth, power, and status. And the make of car he drives is a critical ingredient, a symbol, a display artifact with which to do just that.

To the Mercedes millionaire, his car is part of an arsenal of weapons that he uses to protect against being “mis-classified”.

Yes, in part, it is the make of car that he drives that inoculates him from a dreaded ailment, it prevents him from ever being classified as being a plebian, just an ordinary person.

Ask a Mercedes millionaire about all the other makes of motor vehicles he has acquired over the past ten years. According to my survey’s, what make is the least likely to be mentioned? Ironically it is the number one brand among millionaires surveyed… Toyota. 

Hall of fame baseball legend, Joe DiMaggio’s favorite book was “The Millionaire Next Door”.  Guess what? He drove a Toyota in the peak earning years of his retirement.  Mr. DiMaggio’s peers may have had nice cars but his record, fame, status, and net worth exceeded almost all of theirs.

Clearly, it’s not about the car.

Some people may say Joe was stingy. He died in 1999 of cancer and look at all that he could’ve had. But for Joe DiMaggio and the other millionaires profiled in this book, the well lived life isn’t about the car you drive. It’s about extraordinary achievement and about having their satisfaction come from those achievements and the financial freedom born from success.

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This book was a bitch slap to my face on the way that I choose to spend my money.

Growing up with a mom who was on welfare as long as she could be and a dad who was a school teacher who when I was very young, started a new family he had to help support, on top of my brother and I, led to me growing up far from rich.

Having two parents and older brothers who spent all the money they had, made it easier for me to follow suit.  For my entire life I’ve operated under the hypnosis of thinking I was someone special because of what I bought AND in my later years for what I could do too.

Thomas has been one person in my life who moseyed into my life and showed me a different way to behave with my money and I’m grateful to him. Check out this book. Maybe now is the time you can hear this teacher too.

Talk soon,

Lewis LaLanne aka Note Taking Nerd #2

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