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The Millionaire Next Door by Thomas J.…

The Millionaire Next Door (1996)

by Thomas J. Stanley, William D. Danko

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Showing 1-5 of 38 (next | show all)
I read two older financial books while stuck in long delays on Christmas travel, and thus I confess to possibly merging the two in my mind.

The first one was The Millionaire Next Door. The authors' thesis is that -- gasp! -- there are possibly thousands of millionaires living right next door to you, and you might never notice them. How could this be, the reader must wonder, because millionaires are supposed to live in mansions and have a dozen high-end cars and all those other accoutrements? Yet it's precisely because many of these "next-door" millionaires have eschewed the look of wealth that they can keep a high net worth.

Perhaps my family is not normal (trust me: I've wondered about that for years). Many of them follow the basic adage "spend less than you earn" to varying degrees (but certainly a few don't). But is it really that shocking that families that choose not to spend all their money on pricey clothes or cars might actually be rich? Aren't there enough stories of lottery winners who live life to the fullest for a few years until the money runs out, and then they're broke all over again? If you want stories from both the rich and the under-accumulators of wealth, this book provides many individual case studies, although a few felt made-up just for the chapter. (My favorite was probably the major planning the authors did during an interviewing session -- trying to supply hundred-year-old wine and caviar -- and the first guy to walk in wanted beer in a can.)

As I get older, I realize that "common sense" isn't quite as common as one would hope -- hence the need for many of these financial books. Perhaps this would be a good book for someone just out of college, or for someone in middle age who has followed the dark path and wants to get back on track before retirement (in which case, it's a three-star book). Although there are a lot of very descriptive statistics throughout, it's not all that easy to pull out lessons from the book, and there's really no attempt by the authors to determine if what has worked for their millionaires would be applicable in other (or all) cases.

LT Haiku:

"Spend less than you earn"
should be common sense, but some
still want to spend more. ( )
  legallypuzzled | Dec 31, 2015 |
A really super little book with a naff title which doesn't really explain what the book is about, which is the lifestyle traits of two types of people: Under Accumulators of Wealth and Prodigious Accumulators of Wealth. It is packed with interesting and useful observations about the habits and characteristics of these two types of people based on twenty years of academic research. It even has a chapter on outcomes for children, and advice on setting up wills and trusts. Note to self: re-read this when your children are approaching adult-hood, or at least re-read your highlights and take another look at your book-marked pages! ( )
  jvgravy | Nov 21, 2014 |
Did you know there are millionaires living right next to you? In this book the author does not refer to celebrities and business man in the news. But every day people who thought savvy investments and money management has amazed a net worth of a million dollar or more. People you never hear about or people you do not realized are in fact wealthy. The Author looks at the everyday habits of these unknown millionaires and writes a picture of what it is that actually makes them what they are. Oh also people winning lottery are not included in this book. ( )
  Mark_Oszoli | Nov 19, 2014 |
"Millionaire" in this book represents a changing of the goalposts. People who would've been called millionaires when the word was coined, would be called billionaires today. The prosaic small-business owners who accumulate a million of our inflated dollars are far humbler, culturally speaking, than the classic millionaire -- which is why the authors marvel at the difference between how millionaires live and how the public imagines they do.

Still, the advice on controlling expenditures is good, although I'd be less quick to follow their advice on buying cheap domestic cars.
  ex_ottoyuhr | May 8, 2014 |
This book is showing its age now (a section on buying used car rather quaintly suggests looking for blue books at book stores or the library) but it remains a valuable read. The authors have researched the characteristics of millionaires, defined as people with a net worth over a million dollars, and explain that many of them are counterintuitive. Millionaires often don’t look like rich people. People who look rich may have six-figure incomes but less net worth than you might think—because they spend all their money on fancy clothes, new luxury cars, private school tuition, ski vacations, and all the other depreciating trappings of high social status. People who have managed to accumulate a million dollars have often done so by not looking rich. Many are small business owners in blue collar fields where no one expects them to look fancy or live big; others may be professionals (often self-employed ones, like doctors or lawyers), but frugal ones.

Some interesting sections on the book are related to family. Most millionaires are men and many have nonworking spouses, but those housewives are coupon-clippers. (Your typical millionaire has been married only once.) Many millionaires grew up with parents who, regardless of their actual income level or standard of living, were frugal. The worst off? The adult children of the affluent who receive what Stanley calls “economic outpatient care.” Buoyed by gifts from their parents and the safety net of their parents’ affluence, these adult children often fail to become successful because they simply don’t have to. They never learn to live within their means or to adjust their spending to their income. A particularly boneheaded move is to help your child buy a house in a nicer neighborhood than they could otherwise afford; trying to match consumption with their richer neighbors will keep them forever in the hole.

The book is more descriptive than prescriptive, although it does give suggestions about how to raise children to be financially independent adults and has some suggestions for lucrative fields. Still, even non-entrepreneurial types will see more clearly, after reading this book, what it takes to become financially independent. ( )
  jholcomb | Apr 5, 2014 |
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Author nameRoleType of authorWork?Status
Thomas J. Stanleyprimary authorall editionsconfirmed
Danko, William D.main authorall editionsconfirmed
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For Janet, Sarah, and Brad -- a million Christmases, a trillion Fourth of Julys
—T. J. Stanley
For my loving wife, Connie, and my dear children, Christy, Todd, and Daniel
—W. D. Danko
First words
Twenty years ago we began studying how people became wealthy.
The person who said this was the vice president of a trust department.
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(Click to show. Warning: May contain spoilers.)
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Haiku summary
"Spend less than you earn"

should be common sense, but some

still want to spend more.


Amazon.com Amazon.com Review (ISBN 0671015206, Paperback)

How can you join the ranks of America's wealthy (defined as people whose net worth is over one million dollars)? It's easy, say doctors Stanley and Danko, who have spent the last 20 years interviewing members of this elite club: you just have to follow seven simple rules. The first rule is, always live well below your means. The last rule is, choose your occupation wisely. You'll have to buy the book to find out the other five. It's only fair. The authors' conclusions are commonsensical. But, as they point out, their prescription often flies in the face of what we think wealthy people should do. There are no pop stars or athletes in this book, but plenty of wall-board manufacturers--particularly ones who take cheap, infrequent vacations! Stanley and Danko mercilessly show how wealth takes sacrifice, discipline, and hard work, qualities that are positively discouraged by our high-consumption society. "You aren't what you drive," admonish the authors. Somewhere, Benjamin Franklin is smiling.

(retrieved from Amazon Thu, 12 Mar 2015 18:21:05 -0400)

(see all 6 descriptions)

Stanley and Danko reveal surprising secrets about America's millionaires and provide an valuable blueprint for improving anyone's financial health. "The implication of (this book) is that nearly anybody with a steady job can amass a tidy fortune".--Forbes".… (more)

» see all 4 descriptions

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