What is your mojo in your quest for financial freedom?

When I have time, I like to read.

Most of the time I would catch up with business news. This is essential especially if I intend to buy stocks at a discount (due to some news which I view as ephemeral).

Personal finance books by Thomas J. Stanley

Beyond business news, I like to read investment blogs and personal finance books. I am sure if you are like me who like to read personal finance books, you would have come across books written by Thomas J. Stanley.

I am sure we have our favourite personal finance books, and I do have my own list. However, what struck me as different about Thomas Stanley is that he made millionaires (themselves) the subject of his study. Perhaps there are other authors who do the same, just that I have yet to come across their books.

I have read the following books:

The Millionaire Next Door by Thomas J. Stanley

Stop Acting Rich by Thomas J. Stanley

In his work, he has conducted surveys of millionaires and decamillioanires (people with a net worth of more than US 10 million). His surveys, go in-depth into their income, their profession/businesses, assets, where they live, to the little personal details like the clothes they wear, the food and drinks they consume, cars they drive, are they married, been divorced before, and their upbringing and beliefs. The study is not heavy on numbers, but rather it delves into the psychology and what fundamentally drives their quest into millionaire status. Nevertheless, he is aware of the magic figures whereby one need to reach to achieve financial freedom, but there are many paths to this goal.

Put it in another way, if Stanley is a researcher and his workplace is a laboratory, the ‘lab mice’ would be the millionaires themselves.

Trending topics

I think for the past few days/weeks, I have been reading a lot of articles from Kyith and Christopher Ng.

How to find your core motivation to be financially free? (read here)

Motivations matter in Personal Finance (read here)

Commentary: Single and secure? Does family life come at the expense of financial freedom? (read here)

How much to LEAN FIRE for parents with two teenagers in Singapore? (read here)

There have been many talks, news and discussion on the topic of how parents (with 2 teenagers) can achieve financial freedom, how one can leave their toxic workplace with financial freedom and what ultimately drives oneself to achieve that goal.

The source of these discussions could be attributed to the report by a team of researchers from Lee Kuan Yew School of Public Policy, which in summary stated that a single elderly Singaporean will need $1421 a month while a couple with teenage children will spend $6426. In addition, for a single parent with a young child, the monthly budget will be $3218.

Another topic is the issue of toxic workplaces and this invariably led to the discussions on achieving financial freedom so that one can leave this environment for good.

To quote Christopher Ng: Seven years later, sick of the toxic workplace I worked for, I resigned without a new offer and entered law school when my family had no breadwinner for four years.

Recently, the production firm Night Owl Cinematics (NOC) saw a spate of anonymous and unverified allegations posted on social media, purportedly showing its co-founder and chief executive officer (CEO) Sylvia Chan being verbally abusive towards one of the firm’s on-screen talents. 

The Big Read: Toxic workplaces more common than we think but when do we say enough is enough? (read here)

The 2 kinds of millionaires

If I can summarise Thomas Stanley’s ideas into 2 very broad parts, at the risk of over-generalising, it is that there are basically 2 types of millionaires/decamillionaires.

Actually, when I first started on my path towards financial freedom, I seldom thought about this. To me, rich people are just rich people. At that time, there are (visual) signs which I generally felt pointed to what defines a rich person. It could be a large private property, expensive continental cars (esp. so in Singapore’s context), a high paying job with a well known MNC, sporting the latest gadgets (by them or their kids), country club membership, etc. These are ‘obvious’ visual clues……Which I felt was unattainable to the (younger) me then.

Then over the years, while reading up more, observing more, and then going through Thomas Stanley’s books… I realised that there is actually another version of millionaires.

The first type:

Generally, they are high-income earners. They could be professionals (eg. lawyers, surgeons, tech specialists), start-up founders, star athletes or actors, talented individuals, top executives at banks, etc.
They typically achieve high net worth and financial freedom at a relatively young age eg. in their 30s, or early 40s. They are also generally big spenders, although their income can more than compensate for it.

There are always exceptions. However, the general reason is probably due to the environment they are in (where they work and where they live). For instance, if you are a top executive at a MNC bank, you would probably be very aware of what your colleagues wear, eat, drive and where they stay. There is a certain amount of peer pressure and the need to keep up with the Joneses.
However, he did mention one exception to the various professions – Teachers. Teachers are generally rich, not due to their high income, but due to their frugality. Probably because their profession frowns upon expensive and flashy apparel, cars, etc. How true that is… well, he did mention he did surveys.

In addition, probably due to the fact that this group generally reach high net worth freedom at a younger age, they generally feel that they can always earn more to keep up with their lifestyle further down the road. Money comes easier at a much younger age.

The second type:

This group of millionaires is what I typically come across in the investment bloggersphere, and in the investment forums like InvestingNote. Having said that, there are also a group of financial bloggers that hit high net worth status at a young age (eg. via crypto investments, growth investing, business owners, etc).

Singapore Investor Bloggers with min. 1 SGD Million Stock Portfolios (read here)

The Five Titans of InvestingNote (read here)

Generally, this second group of millionaires are more common, and in fact, with the right will-power and determination, it is within reach to many. Thomas typically considers people like business owners or even people with modest income under this group. They are generally practical and frugal. They are to him (and as the title of his book), the millionaire next door.

Generally, this group of millionaires are in their 50s, business owners, married to the same partner (not gone through a divorce before).

As a group, the net worth of this group is generally lower than the first group, they take more years to attain a high net worth status and yes, their spending amount is much lower. Thomas puts it that their ability to convert every $1 of earned income to wealth (that sticks) as being much higher than the first group (because they saved much more and invest much more).

In addition, because they reach high net worth status at a later stage (eg. after mid or late 40s and beyond), the frugal habits and beliefs tend to stick. This is so even after they reach decamillionaire status. They don’t all of sudden acquire expensive taste (for the sake of it).. they were happy the way they were in the past and they continue to derive the same pleasures from their usual hobbies or work.

It is within reach to many, because one does not need to have a special talent or have a super high income; it just boils down to the simple act of saving more, spending less, investing more (rinse and repeat) and having great work ethics.

In fact, many of these people are in the so-called unglamorous business, however are themselves, business owners. They could be the boss of a cleaning company, a butchery, laundromat business, etc…. unglamorous could be a good thing, in fact, there is no peer pressure to dress or drive flashy, or live in an upscale neighbourhood.

Nevertheless, there are always exceptions, it does not mean that all millionaire surgeons will fall under the first type, or millionaire owners of cleaning companies will fall under the second type… there are the frugal ‘millionaire next door’ type of millionaire surgeons, and vice versa.

AK from A Singaporean Stocks Investor (ASSI) probably epitomises this second group.

How did AK create a 6 digits annual passive income? (How did AK achieve financial freedom?) (Read here)

To quote: “Hi AK,

I am a new follower of your blog. I have questions which are a bit sensitive if you don’t mind. If you do not answer, I understand.

You said you make mid to high 4 figure monthly salary. 

I estimate $60,000 to $100,000 a year. 

Actually, there is a third group of ultra-rich people. They are the very pinnacle of rich, where they can well afford to spend without having to worry. However, this group is extremely rare. Thomas defines them as a ‘freak of nature”. They are either super talented or own mega listed companies. Often it is the wannabes (or the first group of millionaires) who try to emulate them, by dressing and acting the part.


Why bring up these two topics? For example, the trending topics of attaining financial freedom with kids or without kids, leaving a toxic workplace, etc and understanding the mindsets of 2 types of millionaires…

I guess the keyword would be motivation. What is your mojo?

As Christopher would define it – the software (behind the hardware). The hardware would probably be the numbers, magic of compounding via investing and achieving that magic passive income amount.

To quote Christopher:

– What is your core motivation to succeed?

– Does this core motivation align itself with what you think financial freedom is?

It is the software that drives the hardware.

For me, as a parent with 2 kids, it is my duty to provide for the family. And yes, I have my fair share of experience working under unreasonable bosses and client representatives. Yes, there are incidents of shouting, banging on tables, even throwing of files and chairs… Deadlines which were yesterday or last week, phone calls on weekends and ‘invitation’ to urgent meetings Now.

I do not consider myself exceptionally talented, nor is my active salary exceptionally high… that is my current hardware…so my mindset to attaining financial freedom would be more aligned to the second group.


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About apenquotes

Born in 1976. Married with 2 kids (a boy and a girl). A typical Singaporean living in a 4 room HDB flat. Check out my Facebook Page: https://www.facebook.com/apenquotes.tte.9?ref=bookmarks
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