We keep reading about how high street spending is slowing down as people tighten their belts or have less money due to the rising fuel prices. In a country which also has millions of pounds of credit card debt this is an interesting phenomenon and especially in light of a book that I am currently reading called "The Millionaire Next Door"

1. Spend, spend, spend

Readers of a certain age will remember those famous words of Viv Nicholson, who, back in the 1960's won a large sum of money on the football pools. She certainly lived up to her words and ended up penniless and having to take a low paid job to earn her keep.

Viv had a propensity to just accumulate possessions, as opposed to wealth. She lived a blatantly opulent life, buying cars and fur coats and generally just living it up. However she was spending all her capital and eventually it did run out.

Viv did not have the mind of a millionaire and, she would probably be shocked at the typical millionaire profile!

2. Be Frugal to be Fruitful!

While this book is based on studies of American millionaires it is probably true of millionaires the world over.

These people have similar characteristics:

• They operate on a tight budget
• They know how much they spend annually on food, clothes, cars etc.
• They all live below their means
• They invest 15-20% of their monthly GROSS income
• They have a 'go to hell' fund which would allow them to live without working for ten or more years
• They live in less affluent neighbourhoods
• They don't buy new cars or expensive suits or watches
• They teach their kids to budget and not to expect handouts from their parents

In fact the millionaires surveyed came across as being very 'normal' and their neighbours would never realise they have accumulated so much wealth.

Interestingly those in high earning jobs such as lawyers, accountants etc had less wealth because they constantly felt obliged to live up to their 'status' by having the latest cars, gadgets, watches etc. Thus they live in affluent neighbourhoods and often live beyond their means, despite their high incomes and save little or nothing of their monthly salary.

3.  How wealthy are you?

This book gives you a great calculator to see how well you are doing in terms of wealth at any stage in your life. So it allows you to calculate what your net worth should be:

Basically multiply your age by your annual pre-tax income and divide by ten.

So if you are 30 years old and earn £35k a year and have investments that provide £1k a year the calculation would be:

30x£36,000 = £1,080,000. Divided by 10 this = £108,000

So where do you stand in the wealth stakes? Those who have more net wealth than the calculator suggests are PAW's (Prodigious Accumulators of Wealth). Those in the bottom 25% of the calculated net worth are UAW's or Under Accumulators of Wealth.

4. Will the kids be alright?

Another fascinating fact is that kids of PAW's when taught the same values as their parents can too be PAW's. UAW's often instil the same spending habits in their own kids who again become UAW's and don't accumulate wealth.

Finally those who constantly give gifts to their kids on a regular basis create UAW's and often end up giving away most of their wealth.

Fascinating stuff!

THE POWER QUESTION

Do you have the habits of someone who can create wealth?

Remember, many of the millionaires interviewed did not have highly paid jobs! It was their ability to live below their means that over the years built up their wealth. Oh and they took a great deal of interest in their investments, spending about 20 hours a month educating themselves and keeping up with what was happening to their money.

5. Up Close and Personal

Paddy was not happy being brought back into work and had a couple of days of temper tantrums and making every effort to throw Fay off.

However, he soon realised she was having none of it: since then he has been the model of good behaviour and seems to be enjoying his workouts and having to think again! He has also lost his excess weight and is looking fit and handsome - just in time to start his next lot of sarcoid treatment (so doubtless the sight of the vet will not please him).

I cycled 50 miles this weekend to raise money for Breast Cancer charities. Luckily the weather was near perfect with sunshine and blue skies. It was nice to know that all my efforts to regain my fitness have paid off - though my bum won't forget the experience in a hurry.

Until next time have a great couple of weeks!