The
Millionaire Next Door (The Surprising Secrets of
By Thomas J Stanley,
Ph.D.
And William D Danko, Ph.D.
The Millionaire Next
Door was a
perfect wake-up call for me financially. My idea of wealth was the ability to
purchase expensive homes, cars vacations, clothes and anything glamorous. So why is it that most millionaires who have
a great deal of wealth live in homes that aren't in upscale neighborhoods? "Wealth is not the same as income."
"Wealth is what you accumulate, not what you spend." Contradictory to
what tv-like millionaires are portrayed as, most
millionaires are so frugal, live so much lower than their means, and
reject big-spending lifestyles, that
often times even immediate family members don't realize that they're actually
millionaires.
Who wouldn't
want to live in fancy homes and drive expensive sports cars? But is it worth sacrificing long term
benefits for immediate satisfaction?
I've not only learned certain habits or steps which will increase my own
personal wealth, but probably most importantly, I've learned to set my goals
for true financial stability rather than just trying to obtain what seems to be
a rich lifestyle, becoming a saver and an investor, instead of an impulsive
spender.
I learned
that typical millionaires save at least 15% of their income and live well below
their means, not because they can, but because it's a habit that they've
established even at their lowest income level. What ever my income might be
right now, I can still abide by the same principle and increase my own net
worth. The only problem is, this can be a pretty tough habit to acquire.
In this
book, it gives the example of how we would all love to be physically fit. We
know we have to exercise and eat right, but how many of us actually have the
will power to follow through and actually do it? And doesn't it seem that the
only ones that actually do it, don't seem to need it anyway? Increasing one's wealth is governed by the
same principle.
We would all
love to obtain financial freedom, but at the same time, we know that there's a
lot of effort involved. We need to save,
even though it might seem that we just barely have enough to get by from month
to month. It involves a lot of time, planning, dedication, and self discipline.
But why should any millionaire have to be worried about being frugal? Being frugal, or placing more importance on
personal net worth than on luxury, usually is what ultimately lead them to
their financial stability in the first place, and is what is leading them to an
even higher level of personal wealth. Rather than making their money work for
someone else, they're using it to make it work for them. It's the advantage of
investing over spending.
The
Millionaire Next Door discusses taxes, retirement, investments, efficiency,
occupations, and more, but the biggest lesson it taught me was what it really
means to be wealthy and what it is to truly desire wealth. I realized that it isn't the appearance of
being "rich" that I want to achieve, but true financial stability.
This is where my drive comes from that actually gets me to want to follow
through on those other steps necessary in increasing my own net worth, and is
what fills me with vision and dedication that will enable me to accomplish it.
A different day – A
different point of view
This book was highly recommended by Stacey Johnson, author of
LIFE OR DEBT. For him to do that, this
book must have really spoken to him.
This book is geared to people with an average or better income who are UAW
(Under accumulators of Wealth) or maybe AAW (Average accumulators of wealth) to
teach them how to become PAW (Prodigious accumulators of wealth). It is not really written to the under earner,
which I consider myself to be at present.
Page one gives us the feel for the whole book.
"'These people cannot be millionaires! They don't look like millionaires, they don't
dress like millionaires, they don't eat like millionaires, they don't act like
millionaires -- they don't even have millionaire names. Where are the millionaire
who look like millionaires?'
"The person who said this was a vice president of a trust
department. He made those comments
following a focus group interview and dinner that we hosted for ten first
generation millionaires. His view of
millionaire is shared by most people who are not wealthy. They think millionaires own expensive
clothes, watches and other status artifacts.
We have found this is not the case.
"As a matter of fact, our trust officer friend spends
significantly more for his suits than the typical millionaire. He also wears a $5,000 watch. We know from our surveys that the majority of
millionaires never spend even a tenth of $5,000 for a watch. Our friend also drives a current model luxury
car. Most millionaires are not driving
this year's model. Only a minority drive
a foreign motor vehicle. And even
smaller minority drive foreign luxury cars.
Our trust officer leases, while only a minority of millionaires ever
lease their motor vehicles.
"But ask the typical American adult this question: Who
looks more like a millionaire? Would it
be our friend, the trust officer, or one of the people who participated in our
interview? We would wager that most
people by a wide margin would pick the trust officer. But looks can be deceiving."
Are you interested in finding out why you turned out like you
did? Are you interested in finding out
how your kids and grand kids will fare?
This book could give you some enlightenment.
Would I recommend this book as a buy? Yes for me, because I have switched careers
to the financial services industry and I will use it for reference. You might be one who this book was written
to, like Stacey Johnson. But I think for
most it is book to look at while in the book store or perhaps check out of the
library. And I would totally recommend
that you do either of those before Christmas shopping, but save your money for
debt retirement.
Blessings to you.
Richard