I read this book in 2020.

The Millionaire Next Door teaches us that becoming wealthy isn't about living a fancy lifestyle.

Instead, it's about being smart with money, living below your means, and saving consistently.

The book shows that most wealthy people are not big spenders.

They focus on things like budgeting, investing, and working hard over time.

I’m not going to do any of this.

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.

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.

Shows how it's not how much you make it's how you spend, or rather, don't spend and how a small investment can really add up. Tells of real people who have done more with less

Could barely finish this book. It’s outdated and condescending. It’s a book your out of touch, 50 year old coworker would recommend to you. It’s also unnecessarily long. They give 10 anecdotes per chapter to explain simple points. Spend less! Invest! Don’t care too much about looking wealthy, just be wealthy! See how easy that was? I didn’t need 50 stories of how John Doe grew up poor and now overcompensates and that’s why he isn’t wealthy despite making a ton of money at work. The book could’ve been condensed into a quarter of its actual size. Also, the authors were annoying. I almost want to spend money out of spite.

Solid Read about positive accumulators of wealth and under accumulators of wealth. Millionaires aren’t the ones driving around in Range Rovers, BMWs, Maseratis, etc. They are the ones in the Toyota RAV 4s, saving their wealth, rather than spending it.

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.

2022-08-28 update:
The book answers the question: why am I not as wealthy as I should be? One answer: frugality.
Frugal = thrifty, sparing, economical. Defined as sparing or economical as regards money or food.
“Being frugal is the corner stone of wealth building.”
Great book.

Chapter “frugal, frugal, frugal”
“But the lavish lifestyle sells TV time and newspapers. All too often young people are indoctrinated with the belief that those who have money spend lavishly and if you don’t show it you don’t have it. Could you imagine the media hyping the frugal lifestyle of the typical American millionaire?” 29

“80% of America's millionaires are first-generation rich" - very true (in any country)
t• "I have always been goal-oriented. I have a clearly defined set of daily goals, weekly goals, monthly goals, annual goals, and lifetime goals. I even have goals to go to the bathroom. I always tell our young executives that they must have goals." p.45
t• "Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inhertied wealth, is what your net worth should be." p.13
t• Budgeting and controlling expences.
t• Frugal frugal frugal
t• "Have you ever noticed those people whom you see jogging day after day? They are the ones who seem not to need to jog. But that's why they are fit. Those who are wealthy work at staying financially fit. But those who are not financially fit do little to change their status." p.40
t• PAW vs UAW
t• "PAWs allocate nearly twice the number of hours per month to planning their financial investments as UAWs do." p.71
t• Yes there is "survivalship bias in this book": Only those who made it to millionaire status are interviewed.
t• Yet these people were not given a lot of money - in fact they were NOT given money.
t• Yet these people continue to be frugal and thinking about investments
t• Yet what probability do you have to get rich if you are not learning?
• Invert: How do you NOT become a millionaire? By not learning, saving and investing
• You would NOT recognize the average millionaire because they don't spend money on conspicous consumption
t• Generally they were self-made and often immigrants first, or second generation
t• Who becomes wealthy? There are 7 common denominators:
t
t1. They live well below their means
t2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth
t3. They believe that financial independence is more important than displaying high social status
t4. Their parents did not provide economic outpatient care
t5. Their adult children are economically self-sufficient
t6. They are proficient in targeting market opportunities
7. They chose the right occupation

Amazon has recently started a new service called "Prime Reading," in which they offer a limited selection each month of older Kindle titles that Prime members can read for free (which differs from the "Kindle Owner's Lending Library" in that you can check out as many books as you want, versus the Lending Library where you can only read one book a month); and this classic '90s financial self-help book was part of their initial offerings, so I decided "what the hell" and checked out a copy, especially since I'm trying to learn a lot about personal finance in my personal life these days anyway, because of being on the cusp of accepting my first middle-class job of my entire life.

For those who don't know, this is sort of the foundational text for all those popular online "frugal hipster" writers who have become so popular post-2008 economic meltdown, the runners of such websites as Mister Money Mustache and The Four-Hour Workweek and The Simple Dollar, based on a premise that was shocking at the time it came out; at the tail end of the Yuppie Era, a group of economics professors did long-form interviews with several hundred American millionaires, and discovered that the vast majority of them are people you would never expect to be rich, often living in lower-middle-class neighborhoods and having jobs to match, who drive used cars and seldom if ever take resort-based vacations.

This book, then, divulges the secrets behind how these "everyday millionaires" acquired their money, which is basically the kind of no-nonsense, readily apparent advice that's become standard knowledge by here in the 2010s; spend less than you make, stay out of debt, maintain most of your wealth as investments and live off the returns, don't buy fancy things simply for the sake of impressing your neighbors, etc. So as such, then, you can actually learn a lot more about the nitty-gritty contemporary details of enacting such a plan through the frugality blogs like the ones I mentioned and others; but certainly it wouldn't hurt to read this "frugality bible" that lays down the blueprint for all the others, even if it does suffer from a problem hugely common in these kinds of self-help books, of being a full-length manuscript but only containing about a magazine article's worth of actual useful information. A great afternoon skim if you're picking it up for free, like at your local library or through Amazon's Prime Reading program, but I'm not sure I'd recommend paying twenty bucks for a brand-new copy you permanently own.

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 си, 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.

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.