The Millionaire Next Door: The Surprising Secrets of Americas Wealthy may have been eye-opening and influential when first published, but it is badly outdated. While the authors do note in an off-hand manner their advice will be most helpful for high-income earners who are looking not to waste all their money, the book overall appears -- and has a reputation for -- being a more general guide on how to get rich. But I found the book's advice not applicable to our current problems at all. For example, the advice is mostly limited to things like, "Don't buy expensive foreign cars" and "Don't live in high-status neighborhoods." But today, when the costs of medical care, housing, and education have sky-rocketed, I don't think buying Lamborghinis and McMansions is why most people have financial difficulties. I mean, this isn't quite "Millennials are poor because of avocado toast!" levels, but it's in that ballpark.

To save time, here's a partial list of my many objections to this book:

1. No index. Seriously???!!! Even though this book is meant for popular appeal, an index is necessary for the type of allegedly research-based conclusions dispensed.

2. The phrase "medical bankruptcy" never appears. The costs of higher education are never addressed.

3. The authors say one's background doesn't help one become rich, and then proceed to "prove" their point by listing the common ethnicities of millionaires. These are things like Russian, German, Scotch ... seeing a pattern? Yeah, they're all WHITE. Except for Native American, which confused me and is one of the reasons I wanted an index. (Reservation land valuations? Casinos?) Anyway, to claim background doesn't matter for wealth and then to list a bunch of different European ancestries as your evidence is just flabbergastingly blind to America's racial issues.

4. I find the advice about not buying homes in high-status neighborhoods particularly out-of-date, as most high-paying jobs have migrated to dense urban areas where housing is expensive. And the authors don't bother to define "high-status." If they mean McMansions, I don't think those are as appealling nowadays as they used to be (they certainly aren't close to where the good jobs are). But if they mean neighborhoods with walkability, transit access, proximity to resources such as libraries and parks, and maybe a little bit of yard to plant a garden and have your children play ... well, to hell with them, those things are worth paying for!!! That's not paying for status, that's paying for quality-of-life and the health of yourself and your children.

5. The authors suggest leveraging your professional knowledge to benefit your finances (e.g., investing in companies you're familiar with from your job). Guess what? If you're a public servant, that's called corruption. Sure, not everyone is a public servant, but it meant this bit of advice was not useful to me at all, and lowered the overall value of the book.

6. The authors gush over how one can use connections to promote one's business/finances, never acknowledging that these connections are often only available to a limited segment of the population. (See Gripe #3 above.)

I guess that's enough for now.

Overall, if you're looking just for inspiration to be more frugal and invest, the many blogs on financial independence out there will serve you better.

This is my second read of this book. Keep in mind it was written in the 90’s so the dollar amounts have changed but the realities and suggestions still apply today. It is a fascinating study that I am hopeful the authors will update at some point.

Really enjoyed this.

The basic premise is that a super smart statistician went around and interviewed large swaths of millionaires in America in the 80s.


Before I read this book, I had a whole lotta preconceptions about what millionaires look like. Think about what the word 'millionaire' makes you think of.


Here's mine: ridiculously shiny, sleek car. Perfect, branded accessories. Home that looks like a resort. Plastic surgery. Private jet. You have an average-sized movie theater in your home. Live-in chef.


This book challenged that assumption.


There's a huge difference between people who live like they are rich (see above) and those who actually have a huge net worth. Think of the person I mentioned above. If they are making 600k a year, but aren't putting any of that in the bank, they aren't actually rich. They just have a higher cost of living than the average spender, but still all of their money is sunk into a home mortgage, car payments, and profligate livin-it-up.


If that person's job took a dive, they'd be in dire straights. They may look fancy, but they have no real security.


What does the average, real millionaire look like?


-Drives a 15-year-old Ford F150.

-Never buys a piece of clothes that costs more than a couple hundred dollars, even for suits

-Buys a nice house in an average neighborhood

-Does their own yard work

-Flies economy


That is revolutionary. The average millionaire (in net worth) doesn't look like one, and the man who looks like one is usually a fraud.


Other interesting tidbits:

-Some of the most influential factors in whether you'll become a legitimate millionaire are:

t-Having a thrifty wife, versus a spender

t-Your parent's lifestyle and treatment of money

t-Your view of what 'makes the good life'

t-Your level of saving

t-Intentional conversations about finances and goals


One conversation I extremely enjoyed is around how generations create super-spenders.


First, you have the immigrant who scraped by to make it in America, or the first-generation successful entrepreneur. They experienced real hardship, embarrassment, and hustled to do better for their children. They never wanted their children to feel the embarrassment they experienced.


Their kids are sheltered from financial hardship and grow up with an expectation of wealth. They, however, are not passed the skills or drive to keep growing the wealth. Their successful parents end up underwriting the children's lives.


When the grandkids come along... they are passed the same standard of living expectations that their parents were. However... their parents don't have the wealth to bank-roll those lifestyles.


The wealth is gone. The skills and hustles are gone. The appearance of wealth remains.



This. Is. Haunting.


The frugal, true millionaires however never create this "appearance of wealth." Their children never consider their parents wealthy. They don't really talk about inheritance, or financial gifts. The kids are encouraged to gain skills, hustle, pay for things that they want, and save.


The children grow up, benefit from the lessons of their parents, and realize that their parents are "wealthy" later in life. By then, it doesn't matter. They are becoming wealthy themselves.


Would love to hear y'all thoughts on this.

And obviously, highly recommend you read Millionaire Next Door.

The book points out that many millionaires do not look rich, they are frugal people who live below their means and save money. I feel like I was convinced after the first few chapters, and was annoyed to find the rest of the book just rehashing its main thesis over and over again.

Eye-opening and thought-provoking!


Very eye-opening and insightful. Reading this book really gets you thinking; among other things, it's motivated me to modify my savings & investment approach.

RANDOM STREAM OF CONSCIOUSNESS NOTES AND OBSERVATIONS (and noteworthy passages):

--FROM THE PREFACE (written by Dr. Thomas J. Stanley in 2010): "Since 1980 I have consistently found that most millionaires do not have most of their wealth tied up in their stock portfolios or in their homes....Not at any time during the past thirty years have I found that the typical millionaire had more than 30 percent of his wealth invested in publicly traded stocks." I don't blame them; at least a savings account, shitty though the interest rate may be, is FDIC-insured.

Seiko #1 brand of watch among millionaires! Hmmm, somebody tell that to some of my former Quixtar biz partners (the same ones who hate dogs).

"Even most multimillionaires in America don't live in expensive homes." Yeah, I wouldn't need a big-ass mansion myself...just a decent-sized garage to store my excess packrat stuff.

I'm reminded of that 2015 study that showed that people who spend money on "experiences" are happier than those who spend money on "things."

"America is still the land of opportunity. Over the past 30 years I have consistently found that 80 to 85 percent of millionaires are self-made."

There are no secrets.

Also, the millionaires are not the kind you'd like to read about. Just bunch of people who saved for 30years and they have 1'000'000$ in the bank, living almost poor, and praising education.

A recent review convinced me that this has stood the test of time.

I really don't think the 'secrets' are that surprising.

This book in a nutshell - be frugal.

This book describes how millionaires in America achieve their financial success, through a frugal, disciplined life. There are 7 factors of sell-made millionaires, as clearly stated in the book:

"
- They live well below their means
- They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
- They believe that financial independent is more important than displaying high social status.
- Their parents did not provide economic outpatient care.
- Their adult children are economically self-sufficient.
- They are proficient in targeting market opportunities.
- They chose the right occupation.
"

Seven chapters in the book go deeper into explaining these seven findings, through statistics, surveys, and interviews of millionaires. The examples are quite illustrative, demonstrating the lessons very well.

I have several highlight notes from this book:

- The millionaires invest in business area of their expertise.
- To build wealth, minimize your realized (taxable) income and maximize your unrealized income (wealth/capital appreciation without a cash flow).
- Wealth equation: Expected net worth = 1/10 * age * income
- Most millionaires measure their success by their net worth, not by their realized income.
- To become financial independent, should sacrifice high consumption today for financial independence tomorrow. Every dollar you earn to spend is first discounted by the tax man.
- Rule: If you're not wealthy but want to be someday, never purchase a home that requires a mortage that is more than twice your household's total annual realized income.
- Everyone has finite time, energy, money, so need to use them wisely.
- Fact: Many European luxury automobiles depreciate in price rapidly during the first 3 years following their initial purchase, so buying a 3-year-old used car is a good strategy.
- Most people in this country are not entrepreneurial type. But this doesn't mean that they can't become millionaires.
- In general, the more dollars adult children receive, the fewer they accumulate, while those who are given fewer dollars accumulate more.
- Positive EOC: subsidizing children's education.
- Rule: No matter how wealthy you are, teach your children discipline and frugality. You should live the rules, and teach your children by examples.

To me, the first 5 chapters are amazing, but the final two chapters are quite short and not as persuasive as the previous part. Also, after finishing the book, I realized the book is lacking concrete steps of how the millionaire accumulated their estate through business or investment. Another thing is that this book was written in 1995, so it's quite dated.

Overall, this is still a classic and must-read for someone who is new to personal finance like me :) It emphasizes some good money behaviors, such as saving, budgeting, as well as educating children of these behaviors.

HORRIBLE!! for a "self-help" book this was SO judgmental and condescending. Plus, I realize that this book is slightly outdated (but really, late 1990s isn't THAT outdated) but it's full of ethnic, gender, and status biases. DO NOT WASTE YOUR TIME!!

I hope all my loved ones read!

I very much enjoyed listening to this audio book. It was very interesting, easy to understand and not boring at all.
The bottom line is Millionaires and those wanting to become Millionaires live well below their means. People wanting to look rich will never accumulate any wealth since they are busy paying off debts. This book talks mainly about self employed people but everyone with a decent household income living frugal and investing money can become a financially independent.
A highly recommended read.