Lending Club Blog

Seven steps to wealth – the example of Paul Navone

In December, 78-year-old Paul Navone donated $1 million to Cumberland County College in New Jersey. He still has millions left. Navone has been a factory worker most of his life and never earned more than $11 per hour. His financial discipline has been praised in blogs and on the news. JD Roth from Get Rich Slowly calls Navone a “real personal finance hero.” What is his secret?

Navone embodies the tips that I wrote about in the seven steps to wealth from The Millionaire Next Door – The Surprising Secrets of America’s Wealthy. Here’s another look at the seven steps and excerpts from The Press of Atlantic City that describe how Navone lived these principles:

1. They live well below their means – Despite a net worth in the millions, “he still frequents flea markets and rarely buys anything at full price. His wardrobe is almost entirely second-hand, he said, except for ‘maybe the socks.’”

2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth – Navone told Newsday, “I don’t know when I buckled down and got serious about making money. It just grew into my lifestyle. With age, it got more serious. I never denied myself anything, but I certainly never spent on something outstandingly lavish.” He set aside money and invested it in stocks and bonds. Along the way, Navone also bought rental properties in Millville and Atlantic City.

3. They believe that financial independence is more important than displaying high social status – “Navone – who has neither a phone nor a television at his home – is a multimillionaire.” He has never taken advantage of his wealth in the way most people might – large houses, fancy cars, lavish vacations. He drives an old-model SUV and lives in a small house in Center City Millville.”

“…And he still goes to the High Street McDonald’s in Millville every day, where he announces bingo on Wednesday mornings for a group of seniors who meet there regularly.”

4. Their parents did not provide economic outpatient care – “The middle of five children born to immigrants from Italy’s Piedmont region, Navone grew up modestly in Depression-era Vineland. His family was by no means wealthy – ‘poor as church mice,’ he said – and his father worked as a laborer laying railroad ties while his mother was a homemaker. While his father was away at work, he said, Navone and his siblings cultivated half of the five-acre parcel in south Vineland they shared with another family, growing vegetables like sweet potatoes for sustenance.”

“Paul never inherited money,” [his broker] said last week. “Paul started from zero. He just worked hard.”

5. Their adult children are economically self-sufficient – “Navone never married and has always lived alone.”

6. They are proficient in targeting market opportunities – “In the interim, he regularly worked 60-hour weeks. He made enough money to buy several rental properties throughout his life, either in Millville or Atlantic City, although he never owned more than three properties at any given time. The rental income, he said, was what enabled him to save his paychecks for a rainy day. ‘Very seldom did I have to dip into my weekly wages,’ he said.”

7. They chose the right occupation – “As his wealth increased, he continued living frugally. He also never aspired to rise through the professional ranks, preferring to remain a wage earner. ‘Time and time again, it was proven that salaried people made less than hourly workers,’ he said. ‘I never wanted a title. What good is a title?’”

Paul Navone’s example is inspiring. Few of us have a desire to live as frugally or invest as much as Navone, yet we can still learn from his life. By carving out a portion of your income and investing it in a disciplined manner, you can enjoy the huge benefits of compounded returns. The earlier you start the better. Peer to peer lending through Lending Club can be an important part of your investment portfolio. Lenders are currently earning an average of 12.18% on over $5 million dollars.

Friday, January 11th, 2008 at 7:19 am

Comments (3)

  1. I’m positively sure that Novone did grew due to the perfect
    observance of the norms of then successful persons. I think it’s
    more attitude and power of will than ever. Casually, I wrote
    something about making investments. I, myself, have been on the
    very edge of financial bankrupcy, and then with discipline and
    changing some habits of compsumption I made the miracle.

    January 13th, 2008 at 10:25 pm

  2. Roger Steciak:

    I’ve found that the easiest way to build wealth is to pay myself
    first. I do that by making the maximum contributions possible to my
    retirement accounts and also investing at least an additional 10%
    of my income in taxable accounts. I then figure out a way to live
    on whatever money is left over.

    January 20th, 2008 at 12:03 pm

  3. [...] some of them on the following PF blogs Life Well-Lived is Not
    About the Bling – get rich slowly Seven steps to wealth – the
    example of Paul Navone – Lending Club Case Study: Multi-Millionaire
    Made on $11/hr Job – Consumerism [...]

    January 23rd, 2008 at 7:28 pm

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