School is out for summer around here and that means that Summer reading programs are starting up. Our public library offers three programs, one for kids, one for teens, and even one for adults. Signing up was as easy as going online and filling out a form. All we have to do to complete the program is read 22 hours worth by August. Participants who complete the requirements are entered into a drawing for prizes. Last year they gave away nice things like iPads. Not a bad deal eh?!
We have been going to bed much earlier now that Frugal Boy is starting to get into a bit of a routine. Reading before bed is a great way to relax and unwind from a long day and it also makes reaching that 22 hour goal a walk in the park.
The first book that I am reading for the program is The Millionaire Next Door. I’m about a 3rd of the way through the book and it has had some good points even if it takes a long path to get there.
The book starts by categorizing everyone into 3 groups, under accumulators, average accumulators, and prodigious accumulators. It does so by using a somewhat controversial formula to determine one’s expected net worth.
Expected Net Worth = Age * Gross Realized Annual Income * 0.1
If your spouse works, then average your age and use your household income. Your net worth should include all of your assets (including house) minus any liabilities (mortgage, car payments, student loans, etc).
The authors say that anyone with half the expected net worth is an under accumulator of wealth and anyone with double the expected is a prodigious accumulator of wealth. Everyone else is average. Our ratio of 0.93 would place us in the average category.
The rest of the book goes on to examine why people are in the under or over groups. Most of it can be summarized by simply stating, wealthy individuals are frugal.
What books are you wanting to read this summer? By the way, if you have a public library, by all means use it. It is *free* only if you do not pay property taxes. Our *free* library cards cost us around $280 in taxes last year, so you’d better believe that we are going to try and get every dollar out of them.