I’m going to share a crazy, personal story with you.

Before I read about Thomas Stanley’s studies of the wealthy, I always assumed that this personal experience of mine was a “one-off”– as likely to happen again as a band of mice singing Christmas carols for a family of cats. But Stanley’s studies reveal that most rich-looking people are just pretending to have money.

I was tutoring an American boy in Singapore. His mom dropped him off at my house every Saturday. She drove the latest Jaguar, which in Singapore, would have cost well over $100,000.

They lived in a huge house, and she wore an elegant Rolex watch, probably costing $4000 or more.

Anyway, after a series of tutoring sessions the woman gave me a check. She smiled, told me about her family’s latest, overseas holiday, and expressed how happy she was that I was helping her son.

The check she wrote was for $150. And after she left, I climbed on my bicycle, pedalled down the street and deposited my cheque in the bank.

But here’s the thing: the check “bounced”. Her account didn’t have enough money to cover it. This could, of course, happen to anyone. But it happened a lot. Naturally, I grew sceptical when she paid me by check. And sometimes, the woman called me on the phone, and in a desperate voice she gasped, “Could you wait until the beginning of the month to cash that check I gave you yesterday?”

Was this supposed to be happening? After all, this woman had to be rich. She drove a Jaguar. She lived in a massive house. And she wore a Rolex. And her husband was an investment banker who likely made river flows of money. She may have been an extreme example of what Thomas Stanley referred to as an “Underachiever of Wealth”. But according to this respected expert on wealth, that woman had plenty of company.

Wealthy Myth Busters

Thomas Stanley has been studying America’s wealthy for more than 30 years. Surveying wealthy and high salaried Americans has been his passion, leading to a variety of breakthrough book publications and television appearances. His revealing book, The Millionaire Next Door was on the New York Times bestseller list for more than three straight years, and his research unveiled the most comprehensive data on the wealthy that has ever been recorded.

From his books, Stop Acting Rich…and start living like a real millionaire and The Millionaire Next Door, I’ve presented some fascinating facts below—many of which might force you to re-think what it means to be wealthy and how to become financially secure.

There are high-status people with buck loads of money who buy fancy things and live like Saudi Arabian Royalty. And they can afford to do that. But most of the people you see living the life of riley are borrowers. Their salaries are high, so banks and credit card companies don’t mind loaning them streams of money. After all, the financial institutions grow rich when people borrow money to buy huge houses (the more you borrow from a bank, the more money the bank makes in interest) and the more money that’s put on credit cards, the more the bank rubs its hands together.

There’s a huge difference between looking wealthy and being wealthy. Most people who look wealthy aren’t wealthy. Most of them are just showing off. And most of the people who are actually wealthy don’t look wealthy—because they’re far more secure about money. They don’t need to flaunt it.

Thomas Stanley’s facts about the wealthy might shock you—but understanding them is the first step towards having a healthy relationship with money. And it’s the first step towards becoming rich yourself.

1. Toyotas are the most popular brand of car driven by millionaires.

If you thought most millionaires preferred Mercedes Benzs or Porsches, then you’d be wrong. And most of the people who do buy exotic cars aren’t as wealthy as you think. Many of them just borrow loads of money to make purchases intended to impress other people. Others spend most of what they make so they can look rich.

Sports stars represent an extreme example. Most NBA superstars blow the millions of dollars they make until they’re literally looking for handouts in bankruptcy court.

The Toronto Star reported that 60% of NBA players go broke within five years after retiring from professional basketball. They make millions of dollars a year and spend it frivolously on mansions and stables full of exotic sports cars and boats. These guys might be brilliant basketball players, but if 60% of them go broke within five years of retirement, that majority has as much financial intelligence as a baseball mauled by a pit-bull. Read More

I remember being fascinated by a Lamborghini SUV that Mike Tyson owned. But the former World Heavyweight Boxing Champion’s purchasing habits were just one of the many things pounding on his head towards the end of his career. One estimate suggests that Mike Tyson made more than $300 million as a boxer.

 And he’s bankrupt—proving that spending like a fool can have a more devastating impact than a haymaker to the chin.

 2. The recent median price paid for a car by millionaires was $31,367.

People who aren’t millionaires, but plan on being millionaires one day, often do themselves a serious disservice when they buy expensive cars. It’s actually a dumb thing to do. Take the world record-holder in the 100 meter sprint—Usain Bolt. If you were going to race the guy, wouldn’t you want a 50 meter head start? I would!

If I was lining up at the start of a 100 meter dash line, and my competitors were all Olympic athletes, I’d try convincing them to give me a head-start. But so many “wanna-be” millionaires put themselves behind the Olympic athletes, giving the Olympians the head-start. Why would anyone be crazy enough to do that? Maybe it looks cool. Usain Bolt lines up at the 100 meter mark. And a wanna-be sprinter decides to give the man a 50 meter running advantage.

You might think, “Gosh, that guy giving Usain Bolt a break must be REALLY fast”. But the reality is different. The Olympic sprinter who begins on the start line will make the “wanna-be” look silly.

Many underachievers of wealth are doing that when buying a car. The average millionaire pays $31,367 for a car. But so many “wanna-be” rich people outdo the millionaires in the car-spending department—spending $40,000, $50,000, or more than $75,000 for a car. But how can you build wealth and reduce financial stress when you’re paying far more for a car than an average millionaire? Image is nothing if you lose your job or can’t make the car payments. And good luck finding a scientific study showing that people who drive Mercedes Benzs or BMWs are happier than people driving Hondas or Toyotas.

If you want to keep pace with millionaires, start on the start line or give yourself a bit of a lead. If you’re not a millionaire, buy a cheaper car than the average millionaire. It’s better to give yourself a head-start. It doesn’t make sense to spend more money for a car than the average millionaire would—not if you want to become rich, anyway.

3. The typical price paid for a car by millionaires with $10 million or more was $41,997.

This represents “Super-Money”: people with $10 million or more. The world’s richest man, Warren Buffett, has a car worth about $35,000. But wander down to the local mall, and you’ll see many vehicles worth more than $41,997. How many of those people do you think have $10 million or more? If your answer is close to “probably none” then you’re catching on fast.

4. Seiko and Timex are the number one and number two most common watch brands purchased by millionaires.

Seiko and Timex watches aren’t ridiculously expensive. A top Seiko (which is a very fine watch) might set you back $300. Timex watches can be bought for $30. Yet, some other name brands (including the famous Rolex brand) can set you back thousands. If you want to establish habits like the average millionaire, you won’t want to show off with an expensive watch.

Imagine that your goal is to become an Olympic figure skater. You have the best coaches and enough talent to put you on the cover of Sports Illustrated. In financial terms, this is equivalent to having an Ivy League education and a job paying hundreds of thousands a year.

But then, when you step onto the ice at a competition, you purposefully throw yourself into the air and land on your back. Then you get up and purposefully skate straight into the boards. This is a lot like getting a fantastic job, but then rushing out to buy the latest exotic car and watch. If you want to be wealthy, spend like an average millionaire, not like a high-salaried person wearing a beautiful smile for all to see—but skating along the thin ice of a river.

5. Eighty percent of millionaires are “first generational” wealthy. This means that their wealth was not inherited. They earned their wealth.

This is one of my favourite statistics. It says that the American Dream is alive and well: that it’s possible to become wealthy without wealthy parents. In fact, if only 20% of the wealthy actually inherited their wealth, it makes you wonder whether wealth can easily be transferred from one generation to the other. Perhaps easy money (like inherited money) is a lot like money won in lotteries, and windfalls earned by sports celebrities—too much of it gets flushed down the toilet. And once that happens, it’s next to impossible to get it back.

6. Only ten percent of millionaires live in homes worth $1 million or more.

Rub your eyes and read this one again. As of 2009, the majority of millionaires lived in homes worth less than $1 million. There are definitely wealthy people living in elaborate homes, but 90% of millionaires steer clear of mansions. And make no mistake, many mansion dwellers can’t really afford the houses they live in. Adopt the philosophy of the wealthy and you won’t likely ever become stressed about making house payments. Unlike former World Heavy-weight boxing champion, Evander Holyfield, nobody will ever take your home away either—because you’ll be able to afford it.

7. A full 70% of millionaires have never owned a yacht or a boat of any kind.

Boats cost a lot of money to maintain, run and store. That’s why most millionaires don’t own them.

8. Only 1% of millionaires typically serve their dinner guests wine that costs $52.50 or more

9. More than 90% of millionaires typically serve their friends wine costing in the $9 range.

I suppose most millionaires know who their friends are. They don’t need to impress them with fancy, expensive wine labels.

10. Adults who receive “helpful” financial gifts from their parents (stocks, cash, real estate etc), typically end up with lower levels of wealth than people in the same income brackets who don’t receive financial assistance.

This is the statistic that “shocks” most parents. They feel that they can help their adult kids financially—or give them a strong financial head-start—by giving them money. Statistically speaking, easy money is wasted money. Most people who receive cash gifts (help paying off loans, help buying a car, help with a down-payment on a home etc) are likely to have less wealth in the end than someone who makes the same salary, but doesn’t receive any “assistance”.

If your parents help you financially, understand these odds and be especially careful. Without knowing it, you might be on the financial endangered species list without even knowing it. The kids who haven’t been given money usually end up “hungrier” ambitions and a greater work ethic. That’s the statistical reality. So if you’re feeling badly because your parents can’t afford to “help you” financially, you’ll need to look at it differently. It’s you, my friend, who might have the eventual advantage.

It’s like a 100 meter dash. Your friend who is “helped” is given a 20 meter lead before the gun sounds. But you’re the one who has trained herself to run. Once the gun goes off, your friend will just be looking for the next push from a family member on the sidelines. And the statistical, historical odds are that you’ll eventually blow right by them.