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Be Careful When Analyzing the Numbers

By Thomas J. Stanley on Feb 21st, 2012 in Mentor's Corner

A bookstore once asked five Atlanta based authors to participate in a Saturday morning book fair.  As I entered the bookstore, I noted that one of the other authors was also a radio talk show host, Neal Boortz.  I understand that his morning show is one of the most popular nationwide.  He looked at me and said, “Dodge Ram pickup truck, lowest price per pound.”  Mr. Boortz was referring to the material found in Appendix 2 in my book, The Millionaire Next Door.  It contained the rankings of new motor vehicles in terms of the retail price per pound of weight.  I was shocked that Mr. Boortz had acknowledged this information.  To date, he is the only person who ever spoke about or even referred to this material.  I have no idea if any of this information was a part of one of his programs.  In order to be a top radio show host, one must constantly come up with interpretations and insights about interesting facts overlooked by others.  In fact, this sounds like a prescription for success in general 


When I handed the original manuscript of The Millionaire Next Door to my editor, it was 477 pages long.  She chopped out about 40% of the material.   “Space is limited,” she said.  As a compromise, some of the edits were relegated to the appendices.  But who reads the appendices?  Obviously not everyone.  One of the most frequent questions I am asked is: what types of businesses do the millionaires next door own?  My answer: please see Appendix 3 of The Millionaire Next Door


However, it is not enough just to glance at the lists and numbers given “in the back.”  It is important to interpret what these data imply.  For example, if price per pound was the only criteria that millionaires used to buy motor vehicles, one might expect that they would all be driving Dodge Ram trucks.  Even among the most frugal millionaires, however, this is not the case.  And in regard to the types of businesses owned by the millionaire next door types, one must avoid jumping to the conclusion that merely opening one of the businesses found in Appendix 3 will transform him/her into a millionaire.  Most millionaire busines owners had some prior business experience. And most of those had previous experience within their chosen/related industry. 


On the job training may be too little too late when venturing into such businesses as mentioned in Appendix 3:  auctioneer/appraiser, bovine semen distributor, baseball caps/hats manufacturer, commercial laundry, cotton gin operator, diesel engine rebuilder/distributor, executive transportation/bodyguard service, heat transfer equipment [radiator manufacturer], and mobile home park owner!

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