Getting Rich in America: Follow Grandma’s Advice to Save, Sacrifice

It was a defining moment. Richard McKenzie was in the seventh grade when a teacher turned to him and said, “Dickie, it will be you, not circumstances, that determine how far you go in life.”

Today McKenzie is a college professor, author and self-made millionaire. None of which would be surprising to those who didn’t know that he grew up in the least desirable of circumstances. A child of two alcoholic parents, he was sent to an orphanage at age 10 after his mother’s suicide. By then, he was a budding delinquent--a shoplifter, a discipline problem, a “child of the streets.” A high school guidance counselor suggested that McKenzie look into trucking. He didn’t have the intellect or the aptitude for college, the counselor told him.

But McKenzie preferred to think about the advice from that seventh-grade teacher. So, despite his shortcomings, he went to college and on to graduate school--and made himself a fortune.

In retrospect, the experience was the foundation for his latest book, “Getting Rich in America: 8 Simple Rules for Building a Fortune and a Satisfying Life” (Harper Business 1999), co-written with University of Georgia economist Dwight R. Lee.

“From my standpoint, the intent is to say: ‘You can do it. It doesn’t matter what your background is. Don’t listen to the naysayers,’ ” says McKenzie. “In fact, it’s relatively easy.”

Lee, whose childhood was happy and middle-class, had a different reason for writing the book. He wants people to know that they’ve got the whole “wealth and happiness” thing backward.

“Most people want to get rich so that they can have a good life. But, if anything, things work the opposite,” Lee says. “If you lead a good life--a responsible life--and put in productive effort, then you’ll get rich.”

Lee says the idea for the book hit him when he was asked to give a last-minute speech at an economics conference. He’d been giving these talks for years, telling students and other economists about what made nations wealthy, he says. But suddenly it struck him that the topic was boring.

“It occurred to me that most people couldn’t care less about how countries get rich. They want to know how they can get rich,” he says. The keys to wealth are largely the same everywhere.

They are also exceptionally simple. McKenzie and Lee acknowledge that they’re spouting advice your grandmother might have given you. Study. Work hard. Be honest, forthright, faithful and a little frugal. (Two of their eight rules: Get married and stay married, and “resist temptation.”)

In fact, McKenzie and Lee’s book is the latest in a series of financial tomes--starting with the best-selling “The Millionaire Next Door”--that show how ordinary people can accumulate extraordinary wealth in ordinary ways.

Becoming wealthy in America is a choice, McKenzie says. If you choose to work hard, save prodigiously and invest for the long haul, you’re likely to wake up one day with more money than you could have imagined possible.

“The opportunities that are currently available in this country should be considered a form of wealth,” he says. “The task of the average American is to simply convert the opportunities to money.”

Or, as Ron Jones, owner of a Plano, Texas, janitorial service says in the book: “If you want your prayers answered, get off your knees and hustle.”

Of course, the biggest key to becoming wealthy is to save some of the money you earn from all that hard work. To make saving easier, Lee and McKenzie rattle through a series of examples designed to show how making small sacrifices--and saving the money involved--can result in a fortune over time.

Consider tennis shoes. Often, teenagers insist on the latest fashion-forward sneakers at $165 a pair. However, if you resist the temptation, settling for a functional $40 pair instead, you could amass an extra $73,745 in your retirement account by saving the difference. (That assumes you need two pairs of sneakers a year for five years, earn 8% on your savings and retire at age 67.)

Cut back on alcohol, soft drinks and junk food by just $1.50 a day when you’re age 18, and you’ll boost your retirement savings by $290,363. Or start clipping coupons at age 25, saving an average of $5 a week, and by retirement you’ll have $85,692 in the coupon account.

“You don’t have to live the life of a monk,” Lee says. “But recognize that if you can make some fairly minor sacrifices and earn a reasonable return on your money, it’s easy to become rich.”

Times staff writer Kathy M. Kristof is a syndicated columnist. Write to her in care of Personal Finance, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or e-mail kathy.kristof@latimes.com.