Next millionaire

At this point, it is very outdated in terms if the research behind it (1996). I also think it is quite repetitive in getting the main points across. To learn everything from this book, just read some of the reviews here. The book flows from the assumption that being a millionaire is good and something we should aspire to.

According to this book, there are two kinds of people: under-accumulators of wealth (UAWs), who spend everything they earn as soon as they get it (to say nothing of credit cards); and prodigious accumulators of wealth (PAWs), people who live frugally, save, invest, and end up becoming millionaires. So when you see someone who lives in a fancy house and drives a fancy car, chances are, he’s not a millionaire. He may be a high earner, but he’s also a big spender, so he’s a UAW. A real millionaire lives humbly and isn’t into consumption. He might even live right next door.

Now that’s an inspiring idea, one that made me go into this book with some hope of getting rich someday, but I didn’t have to read very far to realize that I’m in a hopeless UAW rut. That made reading it a pretty unpleasant look in the mirror, especially since I believe that what the authors are saying is completely true. I’ve seen it first-hand. I’ve worked for two estate planning attorneys and a bankruptcy attorney. I’ve seen both sides.

For me, the most painful, shame-inducing part of the book was the analysis of parental “outpatient economic care.” I guess it’s not really news, but parents who bestow too much of their wealth too easily on their children end up providing for them even in their forties and fifties. This was the longest section of the book, and I found it a bit repetitive, but then again, perhaps that’s part of my shame reaction.

Aside from this emotional reaction, I have a few technical criticisms. I didn’t finish the chapter called “You Are Not What You Drive,” since cars just don’t interest me that much. And though the book was full of charts with stats showing the authors’ research, I stopped looking at these about halfway through the book. On the flip side, I would have liked to read more about why the millionaires chose the businesses they did. The authors did give some advice on lucrative careers (estate planner was number one), but I would have liked more.

All of that might have induced me to give the book a rating of 2, but I don’t think that’s fair. Just because the book was mostly a downer for me doesn’t mean it isn’t worth reading. It really has gotten me to look more closely at my spending. I just fear that as the book itself warns, crash budgeting can be like crash dieting. Will the effect really last?

Main message is: Be Frugal, invest.
One driving a Benz is quite likely less worth than one driving a Ford F150 (since the Benz owner has already spent money). Max price paid by 75% millionaires for: Suit $600, Shoes: $200, watch $235 (50%)! JCPenney has toughest quality control amongst all stores. Millionaires' wives are all frugal too. They save coupons etc...
1. All have annual household budget
2. All have accountant
3. All have investments in stocks, real estate, business etc
4. Shopping method and principles (i.e. car purchase)
VIMP: It takes only one fancy item to start the snowball effect. i.e. Rolls Royce as a gift was denied by a millionaire because all his accessories, clothes etc things would needed an upgrade to match that status symbol. Millionaires don't care about status symbols. The author calls them artifacts. They own, Ford (F150), Cadillac, Lincoln Town cars, Jeep, Lexus, Mercedes,, Oldsmobile, Chevy, Toyota, Buick, Nissan, Volvo, Chrysler, Jaguar. They tend to go for more weight per dollar criteria subconciously (comforts, reliability, safety).

The book gives distribution of folks per their ancesterial origin, job function, inheritance.
Frugal millionaires have less worries in general.
Doctors & Lawyers typically earn a lot and spend a lot.

The book could have been a little less lengthy; however, good thing is that it has come out of a thorough statistics from numerous interviews of millionaires.

Household net worth = Household Income + Investments - expenses.
Typically, one tries to maximize income but also increases expenses to either show off or to be at par with the society or because one thinks that spending = enjoying.
It takes only one high-class item to start the snow-ball effect.
Worth of a person should be >= Age / 10 * Annual earnings before taxes (no investment).
i.e. for a 30 year old making $100k/year, his worth should be: $300k or more.

If you are rich, your kids could have less net worth if you get into a teaching of spending or supporting them financially.
The question that remains unanswered for me is: What to do with all the money when I save say a few millions?
- I don't end up spending it due to my habit,
- If I start spending, I am doing so when I am old and can supposedly enjoy less
- If there is a recession or major financial problem (heart transplant), then I have more chances of survival (assuming US doesn't adapt good strategies of Europe and Canada about healthcare).
- Once I die, Govt takes most for doing nothing.

It talks about what one should do with all the money (main part is to donate and distribute and how). I shall read it when I am older or a millionaire, whichever happens first. :)

The issues with financially helping out kids and continuing the help when they are adults is well listed. (Economic Outpatient Care). We weaken the weak by helping him financially.

1. Never tell children that their parents are wealthy.
2. Teach discipline and frugality
3. Don't let them realize that you are affluent until after they have established a mature, disciplined, and adult life-style and profession.
4. Minimize discussions of the items that each child and grandchild will inherit or receive as gifts
5. Never give cash or other significant gifts to your adult children as part of a negotiation strategy.
6. Stay out of your adult children's family matters
7. Don't try to compete with your children
8. Always remember that you children are individuals
9. Emphasize your children's achievements, no matter how small, not their or your symbols of success.
10. Tell your children that there are a lot of things more valuable than money

I, however, would rather have that questions hanging over me than having worries of how to sponsor my brother's / kids' education while carrying a $500 Nokia phone and driving a 8 cylinder fancy sports car...

کتاب نسبتا خوبی بود و لی عموما عادات مصرفی و کسب و کار آرمریکا را مدنظر قرا داده بود
در کل بعضی از بخشهای کتاب مثلا بخش مربوط به صرفه جویی و تربیت فرزندان و خانواده برای کسب ثروت و اصول پس انداز جالب و موثر بود

don’t judge me…. girl needs a budget

Đây là một quyển sách đặc biệt. Không phải đặc biệt ở nội dung mà đặc biệt ở cách mình đọc nó.
Mình đọc nó trong khoảng thời gian đi WC. Tính ra mỗi ngày mình phải đi WC đến chục lần. Sau khoảng 5 ngày đi wc như vậy mình đã đọc hết 1 quyển sách. Giờ mới nhận ra mình có quá nhiều thời gian rỗi, chỉ riêng thời gian đi ấy trong 5 ngày là đã nhét vừa 1 quyển sách.
Về nội dung quyển này không quá đặc biệt, thích hợp với người Mỹ hơn người Việt.

The main theme of this book was – Be frugal to become a millionaire
There was a lot of statistics and numbers thrown in to prove the hypothesis that you need to be frugal to become a millionaire. I am not saying that it is not correct. I just felt this was overdone – too repetitive and dry.
I found the calculation of under-accumulators of wealth (UAWs) and prodigious accumulators of wealth (PAWs) interesting and a better way of calculating of how well financially people are doing instead of using the yard stick of how much one is earning.
This is book is not about how to save or how to invest, it is mainly about how millionaires spend.

This book, now a classic, casts a spotlight on how many of the most financially secure individuals are not, in fact, those who live in the biggest homes, wear the most expensive suits, and drive the fanciest cars. Rather, they're the individuals who resist the incessant pressure to keep up with the Joneses (a.ka. Kardashians) and insist on living within their means. Although its investment advice is not sound (investing in what you know encourages overconfidence and familiarity biases, among other pitfalls) and some of the advice is misleading, speaking to a time of greater socioeconomic mobility, it's important to remember still that flash costs cash. Keep your fixed costs low and you'll have a much better chance of achieving financial security, both now and into your retirement.

*Update.. I chose to read this book again for a refresher. The lessons taught are a good reminder on the importance of being frugal, living within our means, and investing. What is taught here is applicable to all, even if all those interviewed by the author are high income earners, far removed from my standing in society (at least compared to me).

This is an excellent book full of great financial advice for people living within any financial bracket. Middle-income folks would probably benefit the most from this book.

Through his research the author maintains that the majority of people who accumulate wealth are not perceived as being wealthy. Becoming a millionaire or even becoming financially stable requires good "financial offense", or smart investment and the capacity to accrue wealth. But even more important is the ability to play good "financial defense", or fiscal responsibility, maintain a high net worth, defensive spending.

Stanley coined the two phrases "Under Accumulator of Wealth" (UAW), and "Prodigious Accumulator of Wealth" (PAW). UAW is meant to represent those who are generally fiscally irresponsible. These folks may have a high capacity to generate wealth, but have a comparatively lower net worth than their counterparts who are Prodigious Accumulators of Wealth. PAW's live below their means. They generally earn a high income, but are fiscally responsible. The author utilizes these to terms as a reference point throughout the book.

The net worth of an individual can be attributed just as much to the means by which he lives as to the income that he receives.

"Most American millionaires today, about 80%, are first-generation rich."

"Remember, wealth is blind. It cares not if its patrons are well-educated."

"People accumulate significant wealth by minimizing their realized/taxable income and maximizing their unrealized or untaxable income."

"The actions of the government are often a threat to high-income earners who use most of their incomes to support their lifestyles. This is especially true when there is political gain for those in power in targeting the 'wealthy'."


" ....never purchase a home that requires a mortgage that more than twice your household's total annual realized income."
I disagree with the author on this in part because there are plenty of exceptions to the rule. For example, when we purchased our first home the annual mortgage was a significant part of our total income but we purchased the home when it was in foreclosure at a time when the housing market had hit rock bottom. After only about eight years, not only did our income increase, but the home has nearly doubled in value. We are lucky we purchased the home when we did.

The best time to buy a vehicle is from December through January

The lessons taught are a good reminder on the importance of being frugal, living within our means, and investing. But all the subjects of this book or those interviewed by the author are high income earners (at least compared to me).

This book is full of great tips about sorting out your financial priorities and pursuing them, and there are plenty of interesting stories about the real lives of America's millionaires to keep the pages turning. You'll definitely be surprised about how much the typical millionaire spends on his cars. This would be beneficial to anyone, and especially those who struggle with consumption habits. The most helpful bit of information I got out of this was the difference in lifestyles between what he calls PAWs (prodigious accumulators of wealth) and UAWs (under accumulators of wealth), and the corresponding dramatic difference in net worth between these two categories. As of my reading, the $s are a tad bit outdated, but the advice is still solid gold. And it's a little bit repetitive and heavy on the numbers, but overall, highly recommend.

Ok, for those that wish to live a simple lifestyle to accumulate wealth, this book is for you! It is FOR US as I am a Millionairess in the Making