Sam Sortor

Personal Finance
E Portfolio Assignment
The Millionaire Next Door
1. big hat, no cattle
This expression was first heard from a 35 year old Texan
successful business man, which rebuilt diesel engines. He
drove an old beat up car, lived in a modest house, in a
lower class neighborhood, and dressed in worn out clothes.
When his British partners came to meet him for the first
time, the Texan was standing in front of them and the
British partners thought that he was one of the truck
drivers. The British partners then said Oh, we forgot we
were in Texas! Then the Texan replied I dont own big
hats, but I have a lot of cattle!
2. Go to hell fund
When you have enough money saved up to live well off
without working for 10 + years.
3. PAW
A Prodigious accumulator of wealth, if you are in the top
quartile for wealth.
4. UAW
Under accumulator of wealth, and you are in the bottom
quartile for wealth.

In the example of Theodore Teddy J. Friend and his

parents, answer the following two (2) questions:
1.

List two reasons why Teddy is considered a UAW.

- Because he felt the need to make up for his background and buy
fancy things.
- Because he was a high consumer buyer but worked a lot of hours to
pay for them.

What was the message Teddys parents sent him

about consumer behavior?
2.

His parents were also high consumers and spent all their income on
things they did not budget for or save any money.

Sam Sortor
Personal Finance
E Portfolio Assignment
The Millionaire Next Door
3. What was the small

change Teddys parents

could have made that would put them in the
millionaire category?
Theycouldhavesavedandinvestedtheirmoney.

4. In the example of Mr. W.W. Allan, answer the

following two (2) questions:
He never extended credit to people who exhibited
the Big Hat, No Cattle philosophy. Why?

Hedidntwanttogivehighconsumersmoneytospendtheyhaventearnedyet.

Why did he decline the gift of a Rolls-Royce?

He didnt feel the need for it, he also didnt want to make his
employees uncomfortable.

5. Regarding Economic Outpatient Care (EOC),

answer the following four (4) questions:
Define Economic Outpatient Care (EOC).

Parentsmakingenoughmoneytogivetotheiradultchildrensotheydonthaveto
work.

Like the example of James, many EOC receivers

(inaccurately) view themselves as __________.

Wealthy

As illustrated in the example of Henry & Josh, what is

the fundamental rule regarding wealth building?
- lived below there means and spent less then they made
Why did Laura succeed?

She was smart with her spending and was determined to make it
on her own.

Sam Sortor
Personal Finance
E Portfolio Assignment
The Millionaire Next Door

Why were sisters Sarah & Alice so different regarding

wealth accumulation?
- Their father was wealthy and believed women should not work. Sarah
left her father and was cut off. So she had to work and make it on her
own. Alice stayed close to her father and received all her wealth from
him.
How has my view on millionaires changed?

My view on millionaires has slightly changed after reading this

book. They dont always dress nice, have fancy cars, have fancy
houses. Some are just normal blue collar people who have good
spending habits and are smart with their money.

Two concepts found most useful after reading this book?

I found two of the most impactful things Ive learned while

reading this book has to be saving and spending habits. Saving
your money and having investments are the habits you need to
be wealthy and successful. Spending less money then you make
and budgeting your money will keep you out of debt and have
money for emergencies.

How can I apply these in my own life?

I want to take the living below your means approach to my

spending habits and try to spend less money then my income.
Also, I will keep a savings and emergency funds to always have a
back up.

Compose 2-3 paragraphs explaining how completing this assignment

helped you achieve at least two (2) of the SLCC Learning Outcomes.
Critical thinking was a huge learning outcome that helped me
achieve and understand this assignment. Using critical thinking will
help me control my future spending habits. It will help me think about
my purchasing before I impulse buy. It will help me plan for my future
and my future financial decisions.
Communicating effectively is another big learning outcome that
has helped me achieve and understand this assignment. Asking
questions and understanding will help me plan my future. It will help
me gain the best choices for how to save and budget my income and
also gain through investments.

Sam Sortor
Personal Finance
E Portfolio Assignment
The Millionaire Next Door