What 'The Millionaire Next Door' Can Teach Occupy Wall Street

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1. Be a prodigious accumulator of wealth. The PAW is the hero of Stanley's book. Unlike their counterparts, the Under Accumulators of Wealth (UAW), PAWs work tirelessly to take advantage of economic opportunities of any size. "Stanley's point is to vote with your feet: if you think that a business or a sector isn't behaving properly, take your business elsewhere, or, better yet, start your own business," says Timothy Johnson, chief investment strategist for Lincoln Financial Advisors.

It's not necessary to work in finance.

"Small business owners can easily become millionaires, and we commonly see lots of people with $1 million net worth coming from many different backgrounds," notes Johnson. "You don't have to work at a hedge fund to be rich." Stanley notes that the majority of millionaires are "new money" small-business owners that carved a niche in a sector or industry.

2. Spend less than you earn. While wealth accumulation through aggressive and ambitious business moves are one side of the equation, living within your means is the other side, notes Tom Watts, founder of Watts Capital Partners, a wealth management firm. "Debt is something that people can use to expand businesses and make more money," Watts says. "The big difference between the wealthy and the rest of us, in my mind, is that the wealthy use debt to produce, and everyone else tends to use debt to consume." Whenever possible, Watts suggests saving and postponing purchases. "Learning to save will yield greater wealth in the long run than any other financial strategy," says Johnson.

3. Invest aggressively for future returns. After PAWs earn wealth from work and save wealth by being frugal, they look to make that money work for them as much and as soon as possible. "People need to make a plan and stick to it," Johnson notes. "Of course, market crashes are terrifying, but young people today should remember that they are investing for 30 years from now, not for a year from now. Young people have time on their side; a steady investment of a small amount of money will translate into a huge nest egg over time."

Most importantly, Johnson says "informed optimism" is the key to building financial security. "You can be pessimistic and look at how ugly the world is, or you can look at what opportunities are out there: investing during the lows of 2009 was the greatest opportunity of my lifetime," Johnson says. "Whatever the reasons for that market crash, it was a great opportunity for a young person who had been saving and waiting for the right opportunity."

--Written by Michael Foster for MainStreet

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