The Millionaire Next Door (Book)
THOMAS J. STANLEY ,Ph.D
88 pages |Â
The bestselling The Millionaire Next Door identifies seven common traits that show up again and again among those
who have accumulated wealth. Most of the truly wealthy in this country donate–live in Beverly Hills or on Park Avenue-they
live next door. This new edition, the first since 1998, includes a new foreword for the twenty-first century by Dr. Thomas J. Stanley.
How can you join the ranks of Americas wealthy (defined as people whose net worth is over one million dollars)? It is 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 will have to
buy the book to find out the other five. ItÃ¢â¬â¢s only fair. The authors conclusions are commonsensical. But, as they point out, their
Â prescription often flies in the face of what we think wealthy people should do. There are no pop stars or athletes in this book,Â
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 are notwhat you drive, admonish the authors. Somewhere, Benjamin Franklin is smiling……………….
The Millionaire Next Door: The Surprising Secrets of America’s Wealthy (ISBN 0-671-01520-6) is a 1996 book by Thomas J. Stanley and William D. Danko.
This book is a compilation of research done by the two authors in the profiles of ‘millionaires’. In this case they used the term ‘millionaire’ to denote U.S. households with net-worths exceeding one million dollars (USD).
The authors compare the behaviour of those they call UAWs (Under Accumulators of Wealth) and those who are PAWs (Prodigious Accumulator of Wealth).
Spend less than you earn
Anyone who spends more than they earn will fail to increase their net worth. “Most of our wives are planners and meticulous budgeters… Most of us will tell you that our wives are a lot more conservative with money than we are. (p.10)”
Avoid buying status objects or leading a status lifestyle
Buying or leasing brand-new, expensive imported vehicles is poor value. Buying status objects such as branded consumer goods is a never-ending cycle of depreciating assets. Even when you get a good deal on premium items, if you choose to replace them frequently, the older items hold no value and have become a sunk cost. Living in a status neighbourhood is not only poor value, but you will feel the need to keep buying status objects to keep up with your neighbours, who are mostly UAWs. The authors make the point that Hyperconsumers must realize more income to afford luxury items and become more vulnerable to inflation and income tax.
PAWs are willing to take financial risk if it is worth the reward
PAWs are not misers who put every penny under their mattress. They invest their money for good returns, and will consider riskier investments if they’re worth the reward. Many put money not only in the stock market, but invest in private businesses and venture capital. They do not gamble or speculate on long-odds stocks.
Economic outpatient care
The authors also make the observation that UAWs tend to have children who require an influx of their parents’ money in order to afford the lifestyle that they expect for themselves, and that they are less likely to have been taught about money, budgeting and investing by their parents.
The authors talked about the seven most common ways that showed up among those that have accumulated wealth. Those common ways are the following; high income, low income, frugal, wealthy, breaking even (Spartan), spender, broke, and breaking even (Lavish).
The Millionaire Next Door – Thomas J Stanley 2008 EPUB
Published on: Jun 17, 2015 @ 14:38