The Millionaire Next Door: The Surprising Secrets of America's Wealthy Hardcover – Oct 1 2016
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How can you join the ranks of America's wealthy (defined as people whose net worth is over $1 million)? 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 wallboard 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. --This text refers to the hardcover edition. --This text refers to the Audio CD edition.
From Library Journal
In The Millionaire Next Door, read by Cotter Smith, Stanley (Marketing to the Affluent) and Danko (marketing, SUNY at Albany) summarize findings from their research into the key characteristics that explain how the elite club of millionaires have become "wealthy." Focusing on those with a net worth of at least $1 million, their surprising results reveal fundamental qualities of this group that are diametrically opposed to today's earn-and-consume culture, including living below their means, allocating funds efficiently in ways that build wealth, ignoring conspicuous consumption, being proficient in targeting marketing opportunities, and choosing the "right" occupation. It's evident that anyone can accumulate wealth, if they are disciplined enough, determined to persevere, and have the merest of luck. In The Millionaire Mind, an excellent follow-up to the highly successful first analysis of how ordinary folks can accumulate wealth, Stanley interviews many more participants in a much more comprehensive study of the characteristics of those in this economic situation. The author structures these deeper details into categories that include the key success factors that define this group, the relationship of education to their success, their approach to balancing risk, how they located themselves in their work, their choice of spouse, how they live their daily lives, and the significant differences in the truth about this group vs. the misplaced image of high spenders. Narrator Smith's solid, dead-on reading never fails to heighten the importance of these principles that most twentysomethings should be forced to listen to in toto. Highly recommended for all public libraries. Dale Farris, Groves, TX
Copyright 2001 Reed Business Information, Inc. --This text refers to the Audio CD edition.
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Top Customer Reviews
One of the biggest contradictions in the book is this: The authors have found that most millionaires will die rich. But they have also found that most people who inherit great wealth end up as good-for-nothing parasites, rarely accomplishing much in their own lives. My tongue-in-cheek analysis, then, is that these millionaires shoud try to die broke.
The book is filled with statistical information about the habits, professions, and lifestyles of millionaires. At times, the reader will feel somewhat bored as a point is driven into the ground. Overall, though, the book is worth reading. We can all benefit by adopting some of the implied suggestions of this book. Work hard, plan for your retirement, live within your means. Just don't get carried away. Stop and smell the roses from time to time; strive to be rich in experience. When you're on your death-bed, I seriously doubt that you will say, "Gee, I sure wish I'd spent more time at the office." Ask a dying person what they would give for another year or two of life. The answer: everything they have. The sunset on Maui is beautiful. Life is short and precious; enjoy it.
The basic premise of the book is how the average Joe and average millionaire may not be too terribly different. The author interviewed hundreds of millionaires and then analyzed the data from the interviews. They repeatedly comment about how "Mr. penny-pinching trailer park owner is far better off with $1.5 million in the bank than Mr. Doctor with a great house and lifestyle, who only has $750,000 saved up."
The authors constantly rant about how being incredibly frugal and watching every penny spent will make you wealthy. While this may be true, none of the information presented ventures far beyond common sense.
Another tactic, which I found very annoying, was that various charts and data tables were listed multiple times but in varying ways. For instance a whole page may be taken up by a table dedicated to whether or not millionaires worry about things like cancer, their children's financial future, and the stock market. Three pages later, the same table may be listed, but with percentages rather than raw data scores. There are many instances where the same information is presented in what appears to be nothing more than an attempt to lengthen the book. I found myself wanting to pound my head against the wall.
I would not recommend this book to anyone looking to make good use of his or her time. I kept reading only in hopes that there would actually be a few pearls of knowledge to be gained. In the end, I wish I had put the book down shortly after reading the great discussion about millionaires and their ancestry. I truly could care less that there is a larger proportion of millionaires from Scottish descent than from Algerian roots. How is this helpful to me??
Don't waste your time reading this book in hopes that you'll come out of it with a great insight into financial well being. It just won't happen. This book seems more like a doctoral thesis gone commercial than a truly useful guide to financial security.
Thanks for your time...
The Millionaire Next Door claims that there are seven key factors that lead to wealth accumulation. Included are: 1. Living Well Below your financial means. In other words being frugal. Buying the reliable used car versus the shinny new BMW or Porsche.
2. Spending your time wisely and in ways that lead to building wealth, such as studying investment. 3. Being more concerned about financial independence rather than showing off how much wealth you possess.
This is a book that will make you feel good about yourself if you are a compulsive coupon clipper or if you keep telling your kids to shut the door as they are letting the heat out of the house and it is costing you money. The book claims that it will teach you how to join the ranks of America's millionaires. Who could resist reading such a book?
To get rich, you must first learn not to be a hyperconsumer. In other words don't buy a lot of expensive stuff you don't need. You need good "offense" or generating earnings of at least $60,000 or more a year. Then you need good "defense" or saving a goodly portion of what you earn. Then you need to get old.
In fact, even if you don't have a million dollars, you can still be "rich" by being a PAW. PAWs or "Prodigious Accumulators of Wealth" have more money than you would think they would based upon their age and income. In contrast are the wasteful UAWs or "Under Accumulators of Wealth." There are also AAWs (Average Accumulators of Wealth) but they aren't discussed much. No mention is made of how much EWOKS tend to accumulate. But, I'm betting those furry little fellows save a lot.
So even athletes worth tens of millions of dollars can be UAWs. There is something reassuring in that! There is a lot of interesting knowledge to be gleamed from this book. We learn that 3.5 of every 100 households in America have a net worth of $1 million dollars or more. But that 22 of every 100 households headed by Russians have a net worth over $1 million dollars.
We also learn that self-employed people account for over 2/3 of the wealthy in America. But Stanley and Danko do not tell everyone to start their own business. That's too risky, the authors say. In later chapters they do mention some businesses that they believe are poised for growth in the future. Businesses that cater to millionaires.
Danko and Stanley seem to see a glimpse of successful businesses when they suggest starting professional businesses. Such businesses tend to need to generate less revenue to make an equivalent level of profits. But this is equivalent to starting a business with high net margins. Many non-professional businesses also have relatively high profit margins. Many college drop outs have built computer-programming based companies, for example.
Despite having studied wealth for decades, and holding PhD's, Stanley and Danko seem to have some misunderstanding about the nature of wealth building via entrepreneurship. It is pointed out that many corporate businesses fail to report profits in any given 12 month period. No allowance is made for businesses like amazon.com which are growing rapidly and establishing themselves. The implied message seems to be that running a business is just too risky. And, it is pointed out that many businesses demand considerable resources like land for coal mining. But, before this the authors are toting investing in assets that appreciate. Land is one of those assets.
We are told that one key factor of the rich is that they minimize their tax bite. The rich tend to pay a much smaller percentage of their overall wealth in taxes than most people. But, here it seems Stanley and Danko are mixing up cause and effect. Yes, the rich think about taxes. But, it is precisely because they have already saved a lot, and have retained wealth that is not taxed, that they pay a smaller percentage of their wealth in taxes.
But Stanley and Danko can be excused for any oversight as they hold PhD's and "being well educated has certain drawbacks" with regard to the creation of wealth.
The flaw of pursuing spending to show you are affluent and have financial status is very thoroughly trashed, as it rightfully should be. All successful people tend to be achievement oriented. But, I think the book could do a better job of following up upon the fact that 2/3 of America's wealthy are small business owners. It seems an injustice to just sweepingly say that likelihood of success in business is tenuous, and imply you should get a professional degree so that you have high earnings to save. Maybe this is what some business owners tell their children, but it is not how they acquired their wealth. To really understand wealth creation, you need to understand business, and I feel Stanley and Danko could do a better job expanding upon this.
Finally, there is some very interesting food for thought about how wealth will affect your children. I like this book a lot and recommend it. Peter Hupalo, author of Thinking Like An Entrepreneur.
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I would recommend this book to everyone...Read more
Shows many of the false thoughts people have about millionaires and wealth.
Worth the read if you have the mind state of becoming wealthy.
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