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The Millionaire Next Door: The Surprising Secrets of America's Wealthy

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The incredible national bestseller that is changing people's lives -- and increasing their net worth!


Who are the rich in this country?

What do they do?

Where do they shop?

What do they drive?

How do they invest?

Where did their ancestors come from?

How did they get rich?

Can I ever become one of them?

Get the answers in The Millionaire Next Door, the never-before-told story about wealth in America. You'll be surprised at what you find out....

258 pages, Paperback

First published October 28, 1995

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About the author

Thomas J. Stanley

33 books452 followers
Dr. Stanley wrote The Millionaire Next Door and The Millionaire Mind. These books spent more than 170 weeks combined on the New York Times’ Best Sellers list. His Millionaire Women Next Door was selected as a finalist for the business book of the year by the Independent Publishers Association and was on several business best sellers lists. Dr. Stanley’s first three books, Marketing to the Affluent, Selling to the Affluent, and Networking with the Affluent and Their Advisors, were all designated as outstanding business books. In total, more than three million copies of Dr. Stanley’s books have been sold worldwide.

Dr. Stanley authored more than 40 published articles which deal with the affluent in America. Dr. Stanley appeared as a featured guest numerous times on The Today Show, 20/20, and The Oprah Winfrey Show. His work has been cited in the national media, including The Wall Street Journal, The New York Times, Forbes, Fortune, Time, Money Magazine, U.S. News and World Report, and USA Today.

Dr. Stanley served as chairman of the Affluent Market Institute through which he has developed research based marketing and selling strategies for identifying, attracting and retaining wealthy clients. He served as the chief advisor for DataPoints, a technology and research company based on his research and work, from 2013 to 2015. Dr. Stanley received his doctorate in business administration from The University of Georgia. He was a university professor for 20 years, leaving to pursue a career in research and writing about America’s millionaires. At Georgia State University he was named Omicron Delta Kappa’s Outstanding Professor.

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Displaying 1 - 30 of 4,414 reviews
Profile Image for Jay.
4 reviews19 followers
July 22, 2008
I learned that there are seven characteristics or common denominators among millionaires in America.

They are:

1.They live well below their means - They are frugal,frugal, frugal. They make more than they can spend. Pretty cool.

2.They allocate their time, energy, and money efficiently, in ways conducive to building wealth - How else did they get there right? Well this goes for those millionaires who didn't inherit their wealth.

3.They believe that financial independence is more important than displaying high social status - Practical. You can display high social status all you want, but if you're still dependent on active income then you're one very vulnerable fella.

4.Their parents did not provide economic outpatient care - Pretty good training ground, don't you think? They train their kids to be survivors and in the end, to be winners. This is the best legacy they can leave to their children.

5.Their adult children are economically self-sufficient -Pass on the buck right? That's why the rich get richer and the poor get poorer.

6.They are proficient in targeting market opportunities - Now this is one handy skill I want to get my hands on.

7.They chose the right occupation - Right! To wake up everyday itching so badly to get yourself to do the things you love. Ain't that a ball!

Learn from this. The lessons and ideas may seem repetitive, but the author is really trying so hard to drive home a point. We need to learn the lessons. He want us to. Well, we ought to. =)
Profile Image for Pat.
87 reviews1 follower
March 19, 2013
It's rare that you can find a book that is as boring as it is sanctimonious. But they pulled it off!

In a nutshell, millionaires aren't made by extraordinarily high incomes (those people's spending tends to increase as well), in fact they're typically people with merely very good incomes who are zealous about frugality and long term investments. Not a huge surprise actually, but its nice to have numbers to back up the story and they do. Many are small business owners, many don't spend much on cars or suits and 80% are first-generation millionaires (not those who happened into big inheritances).

And that's it.

The rest of the book is filled with awkward, pedantic number-twisting to prove that people who spend less on houses and cars will have more left for retirement. What's maddening is the constant tone that people who choose to spend now instead of when they're 65 are "hyperconsumers". Can you believe this doctor, he makes $700,000 per year and spent a whopping $7000 of it on a vacation! What a dope! Wouldn't the $65,000 he spent on a Porsche have felt just as good in an IRA account?

They constantly fawn over blue-collar superstars who drive around in F-150s while their wives clip coupons. They start with the assumption from the very beginning that money is pre-ordained to end up in a retirement account and anything you do to interfere with that is stupid and indicative of poor discipline.

I can't wait for the next book about how Rock and Roll is too loud and women's skirts are too short.
Profile Image for David.
34 reviews21 followers
September 17, 2008
This was a great audio and text book (yes, I got both versions) - I especially enjoyed the chapter that had "Working for the Tax Man" and "The Martin Method."

95% of the millionaires own stocks - most have 20% or more of their wealth in publicly traded stocks.

Build a good money team: accountant, attorney, financial advisor, and you (and spouse).

Looking to build your money team? Ask your CPA. If you do not have CPA... get one.

Be frugal, know your financial picture, and have goals with your money.

The good millionaires know how much their costs are in life - how much they spend shopping, traveling, etc.

You heard of emergency fund, car fund, retirement fund, etc. well I am adding the "Go to Hell Fund."

The typical millionaire has a "Go to Hell Fund" which allows them to quit their job and not work for like 10 years or more. So when you quit your job or get fired, you can say to your employer "go to hell" and walk out the door and not worry about working.

I like this part in the book about UAWs and PAWs. You got three categories to millionaires.
UAW = Under Accumulator of Wealth (1/2 of AAW)
AAW = Average Accumulator of Wealth
PAW = Prodigious Accumulator of Wealth (2 * AAW)

To figure out what category you are in - do the following formula: Age/10 x Income

Example: Age 30, Income $45,000
30/10*45000 = $135,000

This person should have net worth of $135K.

UAW = $67,500
AAW = $135,000
PAW = $270,000

To figure out your actual net worth - do the following formula: Assets - Liabilities

Example: Age 30, Income $45,000, Credit Card Debt $12,0000, Car Loan $20,000

45000-(12000+20000) = $13,000

This person has Net Worth of $13K.

Profile Image for Renee.
82 reviews
March 14, 2008
The point of this book comes through loud and clear, the people that we think are millionaires are more than likely swimming in debt. Just because you live in a fancy neighborhood and drive an expensive car does not make you rich. In fact it goes as far as to say that most millionaires live in less costly areas because it costs alot of money to keep up with the JONES! In fact their study showed 37 percent of their millionaires bought used cars opposed to new and paid cash of course. Now their used cars may be Mercedes but they save on the depreciation of the person that bought it new.

They reference one guy nameed W. W. Allen who is a self made MUTImillionaire. "He and his wife have lived in the same three-bedroom house in the same middle class neighborhood for nearly forty years" "Living in less costly areas can enable you to spend less and to invest more of your income. You will pay less for your home and correspondingly less for your property taxes. Your neighbors will be less likely to drive expensive motor vehicles. You will find it easier to keep up, even ahed of the Joneses and still accumulate wealth"

Ok, makes total sense but not something that is usually pointed out by the financial world. People tend to spend more than they make making it nearly impossible to accumulate wealth. I love the message of this book and their is extensive research used to back it up.
Profile Image for C.
1,101 reviews1,047 followers
January 3, 2011
Most Americans believe "wealthy" and "high-income" are synonymous. Surprisingly, most high-income earners are not wealthy; although they earn a lot of money, they don't keep much of it. To be wealthy is not to amass material possessions, but to increase net worth by collecting appreciating assets.

The book categorizes people as PAWs or UAWs; Prodigious Accumulators of Wealth (PAWs) achieve, create wealth, become financially independent, and build from scratch. Under Accumulators of Wealth (UAWs) simply display a high-status lifestyle. Most wealthy people (PAWs) don't drive new cars, buy expensive clothes, or live in upscale neighborhoods.

I read this book because it was recommended by one of my favorite financial authors, Robert Kiyosaki, author of the Rich Dad Poor Dad series. This book explains 7 factors that contribute to wealth-building. These factors aren't set forth in a step-by-step "how to become wealthy" checklist, but are more indirectly investigated through statistics and interviews explaining the behavior of the wealthy.

The briefest formula for wealth given: be frugal, invest, and own a profitable business.

I found it interesting that (as of 1996) self-employed people (entrepreneurs and self-employed professionals) are less than 20% of the American workforce, but 33% of millionaires. Also, 80% of American millionaires are 1st-generation rich, people who earned their wealth rather than inheriting it.

I liked the comparison between budgeting and dieting or exercising. When you see a fit person eating healthy or working out, you're tempted to think "Why do they need to diet and exercise? They're in great shape!" Of course, the reason they're in shape is because of their diet and exercise regimen. The same goes for the wealthy. You might think that they don't need to budget because they're wealthy, but it's often due to their budgeting that they became wealthy.

To determine your expected net worth, multiply your age by your gross (pretax) annual income, then divide by 10.

The 7 factors of wealth

They live well below their means.
Control spending by creating an artificial economic environment of scarcity. Pay yourself first by investing at least 15% of income before spending on anything else.
Minimize realized (taxable) income, maximize unrealized (non-taxable) income.
Sacrifice high consumption today for financial independence tomorrow.
Get a mortgage less than twice your annual income.

They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
Save and invest early. An early start with low income can outweigh a late start with high income.
Invest at least 15% of gross/pretax income.
Follow a budgeting and plan your finances.
Invest passively with a buy-and-hold method to reduce capital gains and turnover.

They believe that financial independence is more important than displaying high social status.
Dollars are like seeds; you can consume them or plant them to grow.

Their parents did not provide economic outpatient care.
The more dollars adult children receive, the fewer dollars they accumulate. Those forced to provide for themselves tend to be wealthier than those who are given financial aid.

Their adult children are economically self-sufficient.
Helping the financially weak generally makes them weaker.

They are proficient in targeting market opportunities.
Offer goods and services to the affluent. Although they're often frugal concerning consumer goods and services, they're not as price-sensitive about investment services, accounting services, tax advice, legal services, medical care, educational products, homes, and products and services for their businesses.

They chose the right occupation.
Sell your intellect; it's portable across industries and geographic locations.
4 reviews1 follower
January 31, 2015
This book was so difficult to get through.
I have been trying to read one financial book a week. I love Suze Orman, Dave Ramsey. I enjoyed the Millionaire Mind; I found it inspiring. I did not enjoy the Millionaire Next Door.

This book is heavily recommended on so many of the financial online forums and blogs I read, so I borrowed it from my library this week.

I found the first chapter very interesting, and then they lost me. I think the premise of this book could be summarized into one chapter. But then, you can't sell a book on one chapter!

I do not think the writing is good. The authors are annoyingly repetitive. I think they bored their editor so much that the editor didn't catch that they repeat sentences over, and over, and over. The book is fluffed out with tons of boring, didactic charts. The writing is not organized - at times, it seems like streams of conscientiousness writing- jumping around too much.

I think they completely lost my interest on page 75 when they write: "How else does one explain why two experts on wealth are not wealthy? in part, because they spent a combined total of nearly 20 years pursuing higher education."

So on page 106 they tell a great story of Mr. Martin who won't hire advisers who don't have personal accounts of at least $200,000, because otherwise they are "full of baloney." But back on page 75, they admit they are poor themselves! So why should I listen to their advice??

They spend a lot of time on topics that completely lose my interest. To spend pages showing how rich guys typically buy cars by the pound, and then to review how many pounds each car weighs ...this really put me to sleep. They list the cars millionaires typically buy, and then to go on to list pretty much every car in existence. Or to review for pages and pages the ancestral backgrounds of the 3,000 millionaires they happened to pick from geocoded neighborhoods proves nothing to me.

But then the authors lose confidence, and slap a disclaimer- quietly- on page 228. "we have gone out of our way to emphasize that there are no sure steps one can take to become wealthy." . But wait. Then what are the other 254 pages about? I am lost again. Because they spend a whole lot of time enumerating some pretty sound steps that millionaires take to get wealthy (1. they live well below their means. 2. they allocate...)

Most importantly, there were 5.3 million households in America in 1997 (when the book was written) that were millionaires. Yet they only interviewed 3,000 households. To put forth statistics as "typical" based on the low percentage they interviewed can't possibly be accepted as statistical or fact.

On page 249, they review that they chose the millionaires they surveyed based on geocoded neighborhoods- but this goes against what they spent 248 pages proclaiming! They spend the entire book professing that millionaires don't live in certain neighborhoods, then go on to say they only know this because they surveyed certain probable high-net-worth neighborhoods.

With all this said, I am not disagreeing with any of the tenants of wealth accumulation they advocate- I follow them myself, and highly, highly recommend them! So I reluctantly recommend people read the book just to glean that bit, but with hesitance because I understand they will have to sort through boring charts, stereotyping, and bad writing to get advice. Readers would be better off reading a Ramsey book, which is captivating and not doesn't drown out the message with boring stats. There is some good insight in here - live below your means, don't spend 10 years in advanced education with hundreds of thousands of dollars in student loans to hold you back, invest your money at an early age, don't cripple your children by making them economically dependent, teach your children to fish, don't get caught up with keeping up with Joneses, work hard, plan, pick a compatible spouse, use a budget, track your spending, etc. All of this is great advice.

According to .05% of the millionaires in America.

Profile Image for ScienceOfSuccess.
109 reviews192 followers
July 23, 2020
There are no secrets.

Also, the millionaires are not the kind you'd like to read about. Just bunch of people who saved for 30years and they have 1'000'000$ in the bank, living almost poor, and praising education.
Profile Image for Kressel Housman.
972 reviews224 followers
April 7, 2011
According to this book, there are two kinds of people: under-accumulators of wealth (UAWs), who spend everything they earn as soon as they get it (to say nothing of credit cards); and prodigious accumulators of wealth (PAWs), people who live frugally, save, invest, and end up becoming millionaires. So when you see someone who lives in a fancy house and drives a fancy car, chances are, he’s not a millionaire. He may be a high earner, but he’s also a big spender, so he’s a UAW. A real millionaire lives humbly and isn’t into consumption. He might even live right next door.

Now that’s an inspiring idea, one that made me go into this book with some hope of getting rich someday, but I didn’t have to read very far to realize that I’m in a hopeless UAW rut. That made reading it a pretty unpleasant look in the mirror, especially since I believe that what the authors are saying is completely true. I’ve seen it first-hand. I’ve worked for two estate planning attorneys and a bankruptcy attorney. I’ve seen both sides.

For me, the most painful, shame-inducing part of the book was the analysis of parental “outpatient economic care.” I guess it’s not really news, but parents who bestow too much of their wealth too easily on their children end up providing for them even in their forties and fifties. This was the longest section of the book, and I found it a bit repetitive, but then again, perhaps that’s part of my shame reaction.

Aside from this emotional reaction, I have a few technical criticisms. I didn’t finish the chapter called “You Are Not What You Drive,” since cars just don’t interest me that much. And though the book was full of charts with stats showing the authors’ research, I stopped looking at these about halfway through the book. On the flip side, I would have liked to read more about why the millionaires chose the businesses they did. The authors did give some advice on lucrative careers (estate planner was number one), but I would have liked more.

All of that might have induced me to give the book a rating of 2, but I don’t think that’s fair. Just because the book was mostly a downer for me doesn’t mean it isn’t worth reading. It really has gotten me to look more closely at my spending. I just fear that as the book itself warns, crash budgeting can be like crash dieting. Will the effect really last?
Profile Image for Constantine.
836 reviews136 followers
December 28, 2022
Rating: ⭐⭐⭐ ½
Genre: Nonfiction

The Millionaire Next Door is a personal finance book written by Thomas J. Stanley and William D. Danko. The book examines the traits and routines of wealthy people and makes the case that wealth is more likely the outcome of prudent spending and saving habits than high income or inherited wealth.

One of the book's key themes is the fact that many people who on the surface appear wealthy with costly homes and vehicles yet lack financial security because of their high levels of debt and little savings. Contrarily, many people who might not appear wealthy based on their appearances are actually financially successful thanks to their conservative spending patterns and capacity for prudent saving and investing.

The book uses various case studies and examples to support its theories and is based on significant research. It provides helpful guidance on how to amass wealth, including pointers on debt management, investing, and saving.

The authors identify the following seven traits that are typical of millionaires:
-They are dedicated to a vision, have distinct objectives, and are aware of their future.
-They make the appropriate career decisions.
-They value being frugal.
-They consider having the financial security to be more significant than appearing to have good social standing.
-They efficiently spend their time, effort, and money in ways that support accumulating wealth.
-Their parents couldn't afford to pay for their outpatient care.
-Their grown children are financially independent.

The Millionaire Next Door is a good tool for anyone trying to get their finances under control. It is an easy and interesting read due to its lucid writing style, useful suggestions, and the fact that the insights it offers are relevant to readers of all socioeconomic levels.
Profile Image for Angela Randall.
Author 44 books307 followers
January 22, 2012
There's a lot to say about this book, both positive and negative. It had some great ideas in it, some which are possibly quite revelatory for some people, and some really useful information which I would love to ensure certain people I know read. However, it was also a very dry read, somewhat repetitive and dwelled on some things I didn't think were all that fascinating (like what sorts of cars millionaires drive). It also had a lot of charts, which is fun from a stats perspective and lends credibility, but it's a bit too much irrelevant info to take in.

I honestly didn't care what sort of ancestry millionaires had or what cars they drove, but I saw that the authors were doing the Mythbusters thing and making sure people didn't believe in completely false things.

I felt they spent an incredible amount of this book talking about what happens to the kids of the rich. However, this can be used as a great parental tool to ensure parents teach their kids the right money tactics, whether starting rich or not. It also ends with sensible career ideas to suggest to kids (which make a lot of sense with the reasoning).

In essence, the lessons from the book are to remain frugal, save money and to ensure you keep your money wherever possible. Employ good financial and legal help to ensure you save on taxes, invest wisely and whatnot.

Anyway, if you're frugal and live below your means you're on the right path. Then increase your income without changing your habits and be sure to invest the rest well and you'll be fine.
37 reviews
January 12, 2013
Some people live as they will never die, and die as they had never lived.

It looks much more absurdly when you read about all those "millionairs" who are spending all of their lifetime for meticulous accumulation of wealth accompanied by greed and avarice.

I don't know if there were "researches" conducted by authors indeed, and if all the written is truth. If so, I feel sorry for these poor guys, "millionaires". Having an opportunity to do what they want at least sometimes, they heroically sweep it aside for sake of pure wealth accumulation.

Ok, they've decided to get away from the affairs at the age of 60. I can imagine how it's funny for them, old wrecks, to travel, enjoy summer nights, stare at the ocean, dance in bars, love, enjoy speed of bike/car/surf. At last they can spend their hard-gained money after lifetime spent for calculation of profit and saving...saving...saving!

The book itself generally teaches you only one major thing:
Be greedy. Don't buy nothing you like. Why to buy watches for 500 dollars if there is much cheaper one for 20. Don't travel, it's too expensive. Don't have too much friends, they eat and drink too much. Don't have hobby (except of avarice, of course), it always take your money away. Buy cheapest shoes, clothes, cars. You have only one true hobby - MONEY. And when it's time to die, you can donate all your wealth to some charity or religious organization, to avoid exessive taxation. Sounds as a good plan for you? Go ahead, buy and read this book.
Profile Image for Viraj.
124 reviews61 followers
July 20, 2008
Main message is: Be Frugal, invest.
One driving a Benz is quite likely less worth than one driving a Ford F150 (since the Benz owner has already spent money). Max price paid by 75% millionaires for: Suit $600, Shoes: $200, watch $235 (50%)! JCPenney has toughest quality control amongst all stores. Millionaires' wives are all frugal too. They save coupons etc...
1. All have annual household budget
2. All have accountant
3. All have investments in stocks, real estate, business etc
4. Shopping method and principles (i.e. car purchase)
VIMP: It takes only one fancy item to start the snowball effect. i.e. Rolls Royce as a gift was denied by a millionaire because all his accessories, clothes etc things would needed an upgrade to match that status symbol. Millionaires don't care about status symbols. The author calls them artifacts. They own, Ford (F150), Cadillac, Lincoln Town cars, Jeep, Lexus, Mercedes,, Oldsmobile, Chevy, Toyota, Buick, Nissan, Volvo, Chrysler, Jaguar. They tend to go for more weight per dollar criteria subconciously (comforts, reliability, safety).

The book gives distribution of folks per their ancesterial origin, job function, inheritance.
Frugal millionaires have less worries in general.
Doctors & Lawyers typically earn a lot and spend a lot.

The book could have been a little less lengthy; however, good thing is that it has come out of a thorough statistics from numerous interviews of millionaires.

Household net worth = Household Income + Investments - expenses.
Typically, one tries to maximize income but also increases expenses to either show off or to be at par with the society or because one thinks that spending = enjoying.
It takes only one high-class item to start the snow-ball effect.
Worth of a person should be >= Age / 10 * Annual earnings before taxes (no investment).
i.e. for a 30 year old making $100k/year, his worth should be: $300k or more.

If you are rich, your kids could have less net worth if you get into a teaching of spending or supporting them financially.
The question that remains unanswered for me is: What to do with all the money when I save say a few millions?
- I don't end up spending it due to my habit,
- If I start spending, I am doing so when I am old and can supposedly enjoy less
- If there is a recession or major financial problem (heart transplant), then I have more chances of survival (assuming US doesn't adapt good strategies of Europe and Canada about healthcare).
- Once I die, Govt takes most for doing nothing.

It talks about what one should do with all the money (main part is to donate and distribute and how). I shall read it when I am older or a millionaire, whichever happens first. :)

The issues with financially helping out kids and continuing the help when they are adults is well listed. (Economic Outpatient Care). We weaken the weak by helping him financially.

1. Never tell children that their parents are wealthy.
2. Teach discipline and frugality
3. Don't let them realize that you are affluent until after they have established a mature, disciplined, and adult life-style and profession.
4. Minimize discussions of the items that each child and grandchild will inherit or receive as gifts
5. Never give cash or other significant gifts to your adult children as part of a negotiation strategy.
6. Stay out of your adult children's family matters
7. Don't try to compete with your children
8. Always remember that you children are individuals
9. Emphasize your children's achievements, no matter how small, not their or your symbols of success.
10. Tell your children that there are a lot of things more valuable than money

I, however, would rather have that questions hanging over me than having worries of how to sponsor my brother's / kids' education while carrying a $500 Nokia phone and driving a 8 cylinder fancy sports car...
65 reviews4 followers
June 3, 2007
It is not written about the majority of us. It is written FOR the majority of us to make us believe that wealth is everpresent and easily accessible in our society.

The numbers are often listed in a manner that does not acknowledge any actual analysis. Nor is inflation considered with any degree of seriousness. As most cheerleading books for market boosterism it gives its sideways genuflection to supply siders by completely ignoring the operating differences between income and wealth.
Profile Image for Craig.
62 reviews11 followers
May 16, 2008
Getting rich is most often done by being frugal, not by making outrageous, Trump-like gambits. The last 10 years or so have been marked by periods of investment euphoria (tech & housing), followed by terrible hangovers that have destroyed the wealth of millions within a few years or even months. The latest bubble (George Soros actually thinks 2 bubbles popped simultaneously last year -- the housing bubble and the 20 year credit bubble) could potentially be much more devastating than the tech bubble, because the bubble was based on leverage and credit, and so participants often risked everything they owned (and more), and a mere 20% decline in home prices wiped away their entire wealth, and left them without the means to even pay the mortgage once it reset. There have been many foreclosures in the past year. Look for more, and soon a flood of bankruptcies. Bankruptcies will be especially devastating because of recent legislation modifying bankruptcy laws.

It should be noted that there are many so-called self-help finance books out there that are very dangerous for the common man, among them the "Rich Dad" series. They encourage normal people, uneducated in finance, to make such risky leveraged investments like buying second homes with no money down. Such books and advice should be avoided like the plague. Robert Kiyosaki (Rich Dad author) has absolutely no shame in not only misrepresenting himself and his so called Rich Dad (a figment of his imagination), but tickling man's inclination to gamble. Except that when people lose playing his game, they can lose literally everything.

Turning attention to the actual book being reviewed, a large part of the book is devoted to profiling the "typical" millionaire. Some common qualities are:

a) Most millionaires are married couples, never divorced. This should make sense for several reasons. First, there are no alimony/child support bills to weigh down expenses. Second, married people tend to be more emotionally stable, and thus are less prone to spending sprees or other extravagance. Third, married people don't feel they need fancy things to impress others. Although children do indeed cost a lot of money, the reality of parenthood encourages people to change their goals to be more far-sighted, which usually encourages saving.

b) Most millionaires aren't extravagant, nor do they have a desire to live like rock stars. Money provides security to them and their family, and often their tastes and needs are as simple as the rest of ours. I remember the story of the husband in the book who, after selling his business for millions of dollars, gave his wife a check for a large chunk of that money while she was clipping coupons at the kitchen table. She said "Oh thanks honey, that's very nice of you," and went right on clipping coupons.

c) It is true that a disproportionate number of millionaires are business owners. This makes sense though -- although most businesses fail, the ones that succeed are bound to rise in value (it costs much more to buy a successful business than to start a new one). So the sale of a successful business is often likely to generate a one-time windfall that blue/white collars are unlikely to experience. The main point of this section was to point out that certain cultures -- I think Irish and certain sections of Eastern Europe -- encourage members to open businesses and "make their own way". That is reflected in the statistics.

I like this book because it brings together common sense with hard data to present a convincing argument that the best way to attain wealth is to a) save, b) be frugal/tame your desires, c) work hard, d) become a self starter, and e) get married and don't divorce. Common sense all of them, and all of which have happy side effects beyond the monetary ones.
Profile Image for Julia.
67 reviews4 followers
July 9, 2012
The book points out that many millionaires do not look rich, they are frugal people who live below their means and save money. I feel like I was convinced after the first few chapters, and was annoyed to find the rest of the book just rehashing its main thesis over and over again.
Profile Image for Drew Canole.
1,437 reviews1 follower
November 3, 2022
Most millionaires live well within their means, which means they're able to accumulate wealth... and thus become millionaires. So millionaires don't look like how media portrays millionaires (Fancy cars, watches, and clothing... those people have credit card debt). In fact many people with expensive houses and cars have more debt than wealth. A wealthy person waits until they're already wealthy to buy the car/house of their dreams.

The first couple chapters just beat you over the head with the fact that you need to save money (be FRUGAL!) in order to become wealthy. In America it's easy to make money (have good offence) but hard to keep it (have good defence). I actually liked the fact that living in a cheaper neighbourhood not only saves you money on a house/mortgage but also makes you likely to spend less to keep up with the joneses. Living in a fancy neighbourhood, you'll see your neighbours nice car and RV every day and may want to join in.

The authors also go through different ethnicity's affinity to being frugal. I have my Scottish mum to thank for my frugalness. Scots and people from Israel have high propensity to become millionaires due to wealth accumulation... so some stereotypes are true?

Most of the data from this book is dated, but the general concepts all hold up (and really the data is questionable anyways... perhaps only frugal millionaires are going to spend the time to fill out a survey).

Besides saving/frugalness another big factor of millionaires is being self-employed. Not just because they make more money, but being self-employed teaches you how to handle money (and handling your personal finances can happen during work hours... personal finance is just an aspect of your job whereas employed people have a strong separation between work and personal finance).

Anyways, this book is certainly worth a read.

People who accumulate personal wealth tend to have a need to achieve, to create wealth to become financially independent, to build something from scratch. Low accumulators more often tend to have a need to display a high-status lifestyle.

Profile Image for Петър Стойков.
Author 2 books268 followers
January 15, 2020
Когато чуем "милионер", разбира се, си представяме това, което филмите ни показват - луксозни коли, огромни къщи с прислуга, частни полети до скъпи дестинации. Само че много често хората, които живеят така изобщо не са милионери, луксозният им живот често е само назаем и приключва в момента, в който изгубят престижната си работа, бизнесът им тръгне надолу или просто парите от наследството свършат.

The Millionaire Next Door е статистическо изследване на "богатите" в САЩ, но е популярно написана, което я превръща едновременно в книга за финансов здрав разум за всеки.

Авторите събират финансови и социални данни за горната прослойка от населението, а също така провеждат и множество интервюта с хора, които притежават повече от 1 млн. долара, за да видят какви аджеба са те, какво са направили, за да са милионери, как живеят и какво можем да научим от тях.

Това, което откриват с изследването ��и, е доста изненадващо - образът на средния милионер няма много общо с частните самолети, дизайнерски костюми и богато наследство. Не само, че 85% от милионерите са първо поколение (т.е. направили са сами парите си), но и начинът им на живот е доста... незабележим.

Средният милионер е на 55 години, притежава малък до среден бизнес (2-3 магазина, фирма за услуги или нещо такова), живее в нормална, обикновена къща, кара кола, произведена преди 10 години, има щастлив брак и деца, които не глези, работи по 10 часа на ден и обича да спестява и инвестира парите си.

Ще оставя сами да си направите изводите.
Profile Image for Sabine.
593 reviews76 followers
December 2, 2017
I very much enjoyed listening to this audio book. It was very interesting, easy to understand and not boring at all.
The bottom line is Millionaires and those wanting to become Millionaires live well below their means. People wanting to look rich will never accumulate any wealth since they are busy paying off debts. This book talks mainly about self employed people but everyone with a decent household income living frugal and investing money can become a financially independent.
A highly recommended read.
Profile Image for Max McCann.
20 reviews5 followers
August 7, 2011
So, I'm on this kick lately where I'm trying to read books that will help me get my money right. This book, however, was an utter waste of time. Here's the whole book: "Statistically, most millionaires do not lead extravagant lives. Many are actually quite frugal. That is likely why they are millionaires." How they managed to stretch that into 300+ pages I will never know.
Profile Image for Malin Friess.
675 reviews20 followers
May 12, 2012
The Millionaire Next Door is a 5 star book with a 1 star title (It sounds too greedy..how about secrets of those who have saved well)...less sexy, but more humble. My brother in law recommended this book after he began talking about PAW's (prodigious accumulators of wealth) and UAW's (underachieving accumulators of wealth). It turns out this book was for sale at the Goodwill for 1.99..maybe shopping at the Goodwill was the surprising secret of America's Wealthy...I had to find out! So I picked out 2 crisp dollars out of my wallet (Goodwill does not charge tax...nonprofit) and made my purchase.

Dr. Stanley and Dr. Danko try to unravel systematically and statistically the secrets of those that have assets of greater than one million dollars. When we think millionaire we think of Donald Trump, Mitt Romney, George Soros..these are misconceptions....Here are the facts about millionaires

1- 2/3rds are self employed in dull or normal jobs like farmers, contractors, pest controllers
2- 97 % own a home..most have occupied this home for over 20 years (they don't continue to buy up...Warren Buffet still lives in his same home in Ohama..and so does Rick Warren in SoCAl)
3- 80% are first generation affluent and did not receive any inheritance
4- They live below their means..most spend less than 20 k on cars (most drive cars at least 5 years old), less than 80 dollars on shoes, and well under 200 dollars on suits
5- Well educated, 6% PhD's, 18% masters, 6% medical degrees
6- But only 17 % ever attend private elementary or high school

PAW's budget carefully, and save save save. They are not concerned with keeping up with Jones. They don't care about having the right car, furniture, suit, etc. They eschew being "mass consumers...and value financial freedom and the time and ability to do what they want to do and when they want to do it. They are highly against giving large gifts to adult children (although they do support helping kids out with college). In fact they believe (and claim research shows) that giving adult children large cash gifts increases their odds of being poor..it diminishes their incentive to take risks, work hard, and learn how to be productive.

There is a lot to agree with this book..it affirms that you must play defense (spend carefully) not just play offense (try to earn more) to be successful financially (although this book does infer money is not everything). It also affirms that we live in a country of opportunities where normal people with creative business ideas and hard work teamed with careful budgeting and savings can become financially independent.

Interestingly this book claims doctors are poor PAW's...they are too altruistic and often give their services and money and time away.

My only complaints...This book was written in 1996..so it could use an update (with the internet and economic collapse of 2007-2008). Secondly it could extend more information on to specifically how PAW's invest.

5 stars...I read this book in a few days. It held my attention.
Profile Image for Sonia Gomes.
308 reviews94 followers
September 9, 2010
Main message

Save and Invest
Most of the ideas in this book are explained rather well with a lot of good Case Studies.
However, I did not like the idea that we should not give to charity, we all need help, other than that its a real good book
Profile Image for Jared.
577 reviews32 followers
December 23, 2007
The Millionaire Next Door is a summary of the research of two men who have come to some surprising conclusions about the wealthy in America. For instance, they found that almost two-thirds of America's wealthy are first-generation rich. They also talk about a number of the characteristics of those who become wealthy. It turns out that attitude toward money has a much greater impact on wealth than income or occupation.

The book is filled with lots of fascinating facts and statistics. The authors describe two general classes of people: under-accumulators of wealth, and prodigious accumulators of wealth. They also provide a pretty safe metric to determine which one you are: "Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be."

The book is dry at times, and could probably have been slimmed down to about half its size without losing any meaningful content. The authors tend to repeat themselves a lot. But the conclusions that they come to are fascinating, and provide an interesting look at how the wealthy become wealthy -- and why their children usually aren't.
Profile Image for Michael Slavin.
Author 7 books228 followers
May 17, 2016
This is not really a business book, but shows you how all kinds of what one would consider ordinary people become millionaires. It is most often a combination of owning a business and not being wasteful of the money and resources that you earn.
At the time it was written it opened many peoples eyes.
Profile Image for Nancy.
1,218 reviews45 followers
March 6, 2012
As I read The High-Beta Rich: How the Manic Wealthy Will Take Us to the Next Boom, Bubble, and Bust, this book comes back to me. I read it while my son was in college as a "pre-business" (really "I don't know what I want to do") major. I feared he was developing an unrealistic get rich quick attitude so was pleased to discover this book and give him a copy for Christmas. I wouldn't say it changed his life or mine, but it gave us a framework to talk about work and planning which I found useful.

Writing this review more than a decade after reading the book, I don't remember all the details, but I do remember one central point--live below your means. Also I recall that Stanley entertained me with stories about a number of individuals and families to illustrate his points making this a very accessible financial planning book.
Profile Image for Krista.
95 reviews6 followers
March 8, 2019
Lots of information that made me think differently. It also went in some direction that I wasn’t expecting. Very good.
Profile Image for Marie.
24 reviews1 follower
April 10, 2017
TL;DR: most millionaires get rich slow, save 20% every year, and watch their budgets like a hawk. If you are looking for a get-rich-quick primer, you will be disappointed. ;)

I, personally, found it an educational and inspiring read.

One of my major goals this year is to set a stronger financial foundation for myself and my family, so I've been poring over a number of books on the subject. This is a great book in the sense that it helps you understand, from a well-researched perspective, the habits of people that accumulate money. Possibly the most valuable insight is that the millionaire next door doesn't act like the stereotypical mass market version of a millionaire. They don't spend much, if any, money on displays of wealth, they save and budget assiduously, and their money is accumulated over a long period of time. In fact, the author states that most of the millionaires made under six figures in annual salary, and that it took them on average 20+ years to build a million dollars of wealth.

The other key is that millionaires don't save money so they can spend it on big-ticket purchases like yachts or luxury clothing. Their main goal is financial independence. This really struck a chord with me as I realized that many of these millionaires are ordinary people like you and me that decided to build their wealth so they could be safe and secure in their future. They made many sacrifices along the way and did not change their lifestyles once they reached their millionaire status.

Some parts of the book did rub me the wrong way. There was almost a deification of the blue collar entrepreneur. The author sounded breathless with his effusive praise of this particular brand of millionaire. I appreciate the hard work that went into their success, but I bristled at the author's implication that this was somehow the only or superior way to build wealth.

There was also a lengthy section where the author expressed his and other millionaires' disdain for paying taxes, and how important it was to millionaires to lower their tax burden as much as possible, particularly at their death. This I also found distasteful. It's one thing to try and minimize your taxes, and quite another to act as though you shouldn't have to pay them altogether.

All in all, a good book, just don't treat it as gospel.
Profile Image for Christian Orr.
378 reviews32 followers
October 29, 2017
Eye-opening and thought-provoking!

Very eye-opening and insightful. Reading this book really gets you thinking; among other things, it's motivated me to modify my savings & investment approach.


--FROM THE PREFACE (written by Dr. Thomas J. Stanley in 2010): "Since 1980 I have consistently found that most millionaires do not have most of their wealth tied up in their stock portfolios or in their homes....Not at any time during the past thirty years have I found that the typical millionaire had more than 30 percent of his wealth invested in publicly traded stocks." I don't blame them; at least a savings account, shitty though the interest rate may be, is FDIC-insured.

Seiko #1 brand of watch among millionaires! Hmmm, somebody tell that to some of my former Quixtar biz partners (the same ones who hate dogs).

"Even most multimillionaires in America don't live in expensive homes." Yeah, I wouldn't need a big-ass mansion myself...just a decent-sized garage to store my excess packrat stuff.

I'm reminded of that 2015 study that showed that people who spend money on "experiences" are happier than those who spend money on "things."

"America is still the land of opportunity. Over the past 30 years I have consistently found that 80 to 85 percent of millionaires are self-made."
Profile Image for Rob.
128 reviews
December 7, 2014
Did not finish. Seemed to have a few good points repeated many times in different ways. Here's how I would sum up:

Most wealthy people are frugal, earned their wealth, save their money, and pay attention to their finances. They are often business owners. The people who look rich usually are not.

Got it? OK, then go read something else.
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