March 10, 2026

Hello, I'm Sparsh.

Hi, I'm Miritj.

So we're going to be talking about The Millionaire Next Door, which is a really interesting book which kind of shows the difference between the stereotypical millionaire and the habits of a real millionaire. So something the book brings up a lot is the idea of frugality and living below your means. So a really interesting thought from the book that I thought was interesting was that if someone you see has a Porsche, the only info you know about them is that they spent a lot of money on that Porsche, which doesn't necessarily mean they're rich. If anything, it could mean that they're in a lot of debt. So looks can be very deceiving, and definitely don't judge someone just based off material items. And what do you think of that?

I completely agree with you, right? Like, I have many friends, and it's true, the one with the nicest clothes or the flashiest car or flashiest house may not have the highest net worth. If anything, they may have, you know, much less net worth than others. And most of my millionaire friends, you know, they all drive Honda Accord or So I completely agree with you, right? Like, you can't judge a book by its cover.

Yeah, it's a really interesting thought that the book highlights very, very well, you know. Uh, it's like, yeah, so nowadays when I go online, you know, and I and I just scroll on Instagram or TikTok, a very, a very common theme that I see is I see people flexing their supercars, mansions, and they're all talking about how they got this from day trading stocks, online courses. And I don't know, like, what are your thoughts on this?

Again, like, I—

yeah.

You know, I think that could work for some people, but for most people, I, I think, you know, uh, there are like, you know, two qualities, uh, you know, you need to be frugal, which means you always need to live below your means, and second is discipline. So I think, I think that's the easiest key key to success or to be, you know, wealthy for most people. And certainly, like, you know, I mean, some people can get away with, like, you know, flashy— living in flashy houses, driving flashy cars, and still make money. But for most people, this is like, you know, the path that will make them broke rather than, you know, give them success. So I I don't think that's a recipe for everyone.

Yeah, you make a really interesting point. I actually wanted to go back to day trading, which I don't know, it feels like the most common thing I see nowadays. You know, all my friends, they're talking about day trading. They're looking at these candlesticks, whatever this is. And I don't know, is it really a cheat code to wealth? Or do you, would you say long-term investing makes more sense?

Yeah, I mean, that's a good point. So I have like, you know, couple of friends who are day traders, and I've like spoken to them, so, and they have shared with me some stats. And what they have told me is that like, you know, 96% of the day traders lose money, and only 4% of them make money. And even the 4% that like, you know, make money, they are barely able to beat, you know, S&P 500. ETFs. So timing a market, right? Like, at least that's what I've heard from my friends who are day traders, right? And also from the other friends. Like, they always say a time in the market will always outperform timing the market. Sometimes, yes, you can get lucky, uh, if you try, you can time the market, right? But you know, most of the time, or over an extended period of time, you will end up losing money. So I definitely think, you know, the time value is way more important than timing the market by being a trader. Yeah, that's, that's a recipe for disaster.

Yeah, the majority of millionaires are millionaires because of stocks. 95% of them own stocks, so it's clearly a huge part of what makes millionaires millionaires.

But, but you're missing the point. They do own stock, but did they get lucky just with one stock, or they just held on to a stock for a long period of time? Yeah, if you take the example of Nvidia, somebody had bought Nvidia in 2001, like, and it was trading around $10. Today it's like, you know, 100 times more, right? Right. Versus somebody who bought Nvidia like 6 months back person, now they may have made a gain of 20%, but somebody who held it over like, you know, a period of 20 years probably made like, you know, 2,000, 3,000%, right? And of course, like, you can say maybe that person got lucky. That's why never, you know, hold just one stock. Always like, you know, diversify and hold multiple stocks from diverse sectors.

Hey, that actually brings, uh, you There's a specific case I read about in the book. So Warren Buffett, he's been around for a really long time. I think he started investing when he's 11. He's in his 80s, 90s now. And on average, he's been able to generate 22% return every year in the market, which is incredible, which I guess is why he's called the guru of investing. And there was this other guy I read about. So for the past— I think he's around 60, 70, uh, he has a net worth probably about 1/10 of Warren Buffett's net worth, around $20 billion-ish. And for the last 10 years, he's returned about 70% every year in the market. So if this guy, he started trading back when Warren Buffett did Uh, if he was able to generate these returns for as long as Warren Buffett was, he would have some quadrillion quintillion dollars. So I guess it really goes to show what time in the market can do for you.

Yeah, you know. It's pretty unusual for anyone to make like 70% return over a period of 10 years. But like, you know, but I can bet like, if you know, he won't be able to maintain that, yeah, run rate over an extended period of time. Maybe the last 10 years were lucky, or maybe he's a genius, but for normal public, it's, it's almost impossible to, yeah, maintain that. I'm sure sooner or later his rate of return will, you know, probably come close to baseline. Yeah, so I still think, you know, just simple, like, you know, just live below your means. Whatever your savings are, just keep investing in S&P 500 ETF and don't, like, you know, sell when the market is down. Just keep doing that for like 30 years and it doesn't matter like how much you make, you will like, you know, financial wealth. All they say is if you can save $10 per day, in 30 years you will be a millionaire, right? So that's, that's right. So all you need is just one less coffee at Starbucks every day.

Yeah, it's that simple. So I actually, I participated in an investment competition a little bit ago. And I remember how I was working. I was just researching stocks maybe 10, 15 hours every week. And after about a month or so, I think that I had— I barely beat the S&P 500. I think the S&P 500 went up maybe 2%, I went up 2.5, 3%, something like that. So I guess it wasn't really worth it. And it makes sense why most people say that just buy the S&P 500 because time is wealth. And my grades kind of went down because of it too.

Yeah, I couldn't agree more with you, right? Like, again, I've been in— I've been investing for over 25 years, and I can tell you there are some years when I can beat S&P 500. But if I take the average over 25 years, SP 500, like, you know, would have won convincingly. So I think my strategy lately has been just like, you know, keep investing in SP 500 little by little every month and just don't look at it, you know, till it's time to retire.

So yeah, so I actually, uh, wanted to look at a really interesting stat from the book. So something really interesting is that normal millionaires, just like regular millionaires, one, maybe one $5, $10 million, just around there, have a realized income that is 6.7% of their total net worth. While the mega rich, around just a lot more— billionaires, hundreds of millions— uh, they have a realized income that is 3.66% of their, uh, of their total net worth. So I guess what that says is that the richer you are, you don't need a high income to be rich. That it makes it pretty clear. Like, uh, but yeah, like, says a lot. So I guess what it kind of means is that the mega wealthy, um, they don't sell their stocks as much because to get that wealthy, of course, you need a lot of investments. But if their realized income is that low of a percentage of their total wealth That essentially means that they're doing it on purpose to dodge taxes and that they're investing in highly safe long-term stocks so that they don't have to sell their stocks and pay taxes.

I'm not sure I fully agree with that. I think, you know, I, I think there are like, you know, wealthy and then there are super rich, and I think If I'm super wealthy, I'll compare people with like, you know, in excess of 100 million and over, right? And I, I would think to become that wealthy, you have to take some concentrated bets in fewer stocks, fewer companies. That's the only way you can make that much money. But it also comes with high risk. Yes. And we only hear stories about people who are successful, but for every, like, you know, one billionaire, there are like probably like, you know, 10,000 who couldn't do it, or, you know, their company failed. So I, I think that's a very high-risk, high-reward strategy. We certainly need such people, right? Like, because those people are generally like innovative and they might build a company, yeah, for the society. But in general, I think for normal population like me, just like investing in ETF every month, little by little, living Below your means, it is probably the easiest way.

So yeah, this is all really interesting. I actually wanted to go back to frugality for a sec, and I wanted to talk about the purchase price of cars for millionaires. So I'm looking at these stats right now, and okay, So for their latest vehicle, um, most millionaires spent around $25,000, and only 5% of them spent over $60,000, which is really interesting because in our minds we have this picture of millionaires driving Lamborghinis and Porsches and living in huge houses. So it's a really interesting stat. Something else interesting is that only 23% of millionaires own the current year of car model. The majority of them own older car models, older and reliable cars, and most of them haven't bought a car in the last 2 years, and 25% of them haven't bought one in 4 or more years. So that's really interesting. Uh, what do you think?

No, I mean, I guess I'm not surprised by that stat because, you know, again, like most of my friends who are wealthy, right, like they all have a very deep understanding of the power of compounding. And they know that, like, you know, investing in cars and other things— cars are like depreciating asset. As soon as you buy a car and it goes out of the showroom, it depreciates by 30% within few seconds, right? So cars are a depreciating asset. And, you know, again, I'm not saying they'll never buy flashy cars. Maybe they'll buy flashy cars, you know, when they are like later in their life and they have accumulated a lot of wealth, but early on they understand, like, you know, if they want, want to tap into the power of compounding, they have to live below their means as much as possible and invest those savings somewhere so that they can be compounded. So yeah, so I guess I'm not surprised by this tax.

Yeah, yeah. So I actually wanted to look at some of the different career choices. So there's something really interesting. So it talks about how the effects of giving adult children financial help. And it's really interesting because I'm just looking at some jobs here, but, um, like just for example, an accountant. So an accountant who received cash gifts from their parents after turning 18 has 57% of the net worth of someone who didn't. And that's a really interesting stat because 57% has a huge gap from the other people. So that's really interesting that cash gifts can get rid of their drive that, that much. Um, there's actually something else interesting too. So this isn't true— it's— this is true for most professions, but some professions are actually exceptions. Like, for example, college and university professors. When they receive cash gifts, they're actually much better— they're much better off. They have 128% of the net worth of people in their profession who, uh, who didn't receive cash gifts. And the same goes for teachers. But overall, um, the average net worth for all occupations combined of people who received cash gifts after turning 18 is 81% of those who didn't, which is pretty low. So what do you think of that?

Again, I don't think I'm surprised by this stat, right? And as I said, right, the two keys to success is frugality and discipline. And I feel like discipline is like an overlooked you know, part. And to me, discipline essentially means hunger, right? Like, you will only be disciplined if you have hunger for success. And I feel like, you know, if parents give their child like everything they want— I mean, I think the parents' intentions are good. They, they don't want their child to face the same struggle that they it. But at the same time, by giving them everything they want, you know, you just take that hunger away from the child, and they are just not as motivated to study or work towards their goal. They may be spending, you know, majority of their time on YouTube Reels or like practicing some sport rather than developing some life skills, right? So I think that does like, you know, uh, take that hunger away.

Yeah, it's interesting, but What I find really interesting is why two somewhat similar jobs— so we have college and university professor and high school/elementary teacher— they both, um, actually have higher net worth percentages, uh, when they're receiving gifts compared to not receiving gifts. So that's really interesting. So I think my logic behind this is that I guess being a teacher, teachers have— I don't know, I guess it's somewhat of a different scenario. Like, other people, um, are easily able to just run through all the money in seconds. However, teachers They have to go to university. They oftentimes have major loans. Another thing is that, you know, teachers tend to be more careful and disciplined with money. So when they receive extra money, they're much more likely to save it and invest it wisely. So we're getting towards the end of the book, but I wanted to talk about something interesting. I've read about in the book. So it's not exactly like the, the other stuff we've discussed, which is more the habits of a millionaire, but I actually wanted to talk about opportunity cost. So back a couple, like around 100 years ago, we were working in factories, grinding 80, 90-hour work weeks. Uh, it was very tough. So what a lot of philosophers and economists were saying back then was that in a couple years— and not a couple years, but around modern day, uh, salaries will rise so much that people will be able to afford to stop working. Well, not stop working, but reduce their work weeks to 15-20 hours so that they have more time to spend with their children and their families and their hobbies and just enjoy life. And what they predicted actually did come true. So they predicted salaries would rise 6 times, and I believe that they rose around 7 or 8 times. So nowadays though, we don't work 15-20 hour work weeks. We work— we still work 40, 50, 60, even more for some occupations, some people. And it's really interesting, but it's all because of this one thing called opportunity cost. So essentially what opportunity cost is, is that let's say we make $500 per day. I make $500 per day. So, and then I decide to take a day off to spend time with my family. So in my head, I'm not taking a day off, uh, I'm not, uh, it's just a thought that's gonna be in the back of my mind, like I'm losing $500 to be here. Me being here having fun, spending time with my family, enjoying my freedom is costing me $500. And I just thought it was a really interesting point to, you know, just really interesting. So moving on to the last, um, the last part of the podcast, um, So Neeraj, what would you say if you could go back in time? What's one thing you would change?

I think it's, it's very good that, you know, you have raised this topic of opportunity cost, and I don't think the kids today really understand what, what an opportunity cost means, right? Or the value of it, right? And even like, you know, If I look at like, you know, in my home, like my kids, they're spending like 4 hours, 5 hours on YouTube or watching TV. What if they had spent like half of that time honing their skills, right? They could have earned way more wages, right? So I think it's— you raise a very good point of opportunity cost, right? And it's something that needs to be taught in the school. School also, right? Like, yeah, like the kids should not be wasting, like, you know, okay, if they're spending some time on some gym activity, it's understandable. If they are spending 5 hours watching YouTube Reels or TV, just imagine, like, you know, how much wages they are gonna lose over their lifetime, you know, because of, like, you know, time they are wasting. So I think this opportunity cost is, you know, a very important thing, and I wish to your second question, like, you know, if I can go back in time, I wish when I was in my teens I had also understood the value of this opportunity cost a little more.

And, uh, yeah, I think that that makes sense.

That's—

opportunity cost is huge. And honestly, I should really change up my life and start thinking more about opportunity cost. And yeah, so that takes us to the end of a podcast. Thank you for listening, and I hope you learned a lot about this incredible piece of literature by Thomas J. Stanley and William Danko. Thank you.

Thank you for having me. It's always a pleasure. You want to chat with a young, bright mind like you.