Rubbish.
It is not written about the majority of us. It is written FOR the majority of us to make us believe that wealth is everpresent and easily accessible in our society.

The numbers are often listed in a manner that does not acknowledge any actual analysis. Nor is inflation considered with any degree of seriousness. As most cheerleading books for market boosterism it gives its sideways genuflection to supply siders by completely ignoring the operating differences between income and wealth.

Getting rich is most often done by being frugal, not by making outrageous, Trump-like gambits. The last 10 years or so have been marked by periods of investment euphoria (tech & housing), followed by terrible hangovers that have destroyed the wealth of millions within a few years or even months. The latest bubble (George Soros actually thinks 2 bubbles popped simultaneously last year -- the housing bubble and the 20 year credit bubble) could potentially be much more devastating than the tech bubble, because the bubble was based on leverage and credit, and so participants often risked everything they owned (and more), and a mere 20% decline in home prices wiped away their entire wealth, and left them without the means to even pay the mortgage once it reset. There have been many foreclosures in the past year. Look for more, and soon a flood of bankruptcies. Bankruptcies will be especially devastating because of recent legislation modifying bankruptcy laws.

It should be noted that there are many so-called self-help finance books out there that are very dangerous for the common man, among them the "Rich Dad" series. They encourage normal people, uneducated in finance, to make such risky leveraged investments like buying second homes with no money down. Such books and advice should be avoided like the plague. Robert Kiyosaki (Rich Dad author) has absolutely no shame in not only misrepresenting himself and his so called Rich Dad (a figment of his imagination), but tickling man's inclination to gamble. Except that when people lose playing his game, they can lose literally everything.

Turning attention to the actual book being reviewed, a large part of the book is devoted to profiling the "typical" millionaire. Some common qualities are:

a) Most millionaires are married couples, never divorced. This should make sense for several reasons. First, there are no alimony/child support bills to weigh down expenses. Second, married people tend to be more emotionally stable, and thus are less prone to spending sprees or other extravagance. Third, married people don't feel they need fancy things to impress others. Although children do indeed cost a lot of money, the reality of parenthood encourages people to change their goals to be more far-sighted, which usually encourages saving.

b) Most millionaires aren't extravagant, nor do they have a desire to live like rock stars. Money provides security to them and their family, and often their tastes and needs are as simple as the rest of ours. I remember the story of the husband in the book who, after selling his business for millions of dollars, gave his wife a check for a large chunk of that money while she was clipping coupons at the kitchen table. She said "Oh thanks honey, that's very nice of you," and went right on clipping coupons.

c) It is true that a disproportionate number of millionaires are business owners. This makes sense though -- although most businesses fail, the ones that succeed are bound to rise in value (it costs much more to buy a successful business than to start a new one). So the sale of a successful business is often likely to generate a one-time windfall that blue/white collars are unlikely to experience. The main point of this section was to point out that certain cultures -- I think Irish and certain sections of Eastern Europe -- encourage members to open businesses and "make their own way". That is reflected in the statistics.

I like this book because it brings together common sense with hard data to present a convincing argument that the best way to attain wealth is to a) save, b) be frugal/tame your desires, c) work hard, d) become a self starter, and e) get married and don't divorce. Common sense all of them, and all of which have happy side effects beyond the monetary ones.

Most millionaires live well within their means, which means they're able to accumulate wealth... and thus become millionaires. So millionaires don't look like how media portrays millionaires (Fancy cars, watches, and clothing... those people have credit card debt). In fact many people with expensive houses and cars have more debt than wealth. A wealthy person waits until they're already wealthy to buy the car/house of their dreams.

The first couple chapters just beat you over the head with the fact that you need to save money (be FRUGAL!) in order to become wealthy. In America it's easy to make money (have good offence) but hard to keep it (have good defence). I actually liked the fact that living in a cheaper neighbourhood not only saves you money on a house/mortgage but also makes you likely to spend less to keep up with the joneses. Living in a fancy neighbourhood, you'll see your neighbours nice car and RV every day and may want to join in.

The authors also go through different ethnicity's affinity to being frugal. I have my Scottish mum to thank for my frugalness. Scots and people from Israel have high propensity to become millionaires due to wealth accumulation... so some stereotypes are true?

Most of the data from this book is dated, but the general concepts all hold up (and really the data is questionable anyways... perhaps only frugal millionaires are going to spend the time to fill out a survey).

Besides saving/frugalness another big factor of millionaires is being self-employed. Not just because they make more money, but being self-employed teaches you how to handle money (and handling your personal finances can happen during work hours... personal finance is just an aspect of your job whereas employed people have a strong separation between work and personal finance).

Anyways, this book is certainly worth a read.

People who accumulate personal wealth tend to have a need to achieve, to create wealth to become financially independent, to build something from scratch. Low accumulators more often tend to have a need to display a high-status lifestyle.

Lots of information that made me think differently. It also went in some direction that I wasn’t expecting. Very good.

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.

Rating: ⭐⭐⭐ ½
Genre: Nonfiction

The Millionaire Next Door is a personal finance book written by Thomas J. Stanley and William D. Danko. The book examines the traits and routines of wealthy people and makes the case that wealth is more likely the outcome of prudent spending and saving habits than high income or inherited wealth.

One of the book's key themes is the fact that many people who on the surface appear wealthy with costly homes and vehicles yet lack financial security because of their high levels of debt and little savings. Contrarily, many people who might not appear wealthy based on their appearances are actually financially successful thanks to their conservative spending patterns and capacity for prudent saving and investing.

The book uses various case studies and examples to support its theories and is based on significant research. It provides helpful guidance on how to amass wealth, including pointers on debt management, investing, and saving.

The authors identify the following seven traits that are typical of millionaires:
-They are dedicated to a vision, have distinct objectives, and are aware of their future.
-They make the appropriate career decisions.
-They value being frugal.
-They consider having the financial security to be more significant than appearing to have good social standing.
-They efficiently spend their time, effort, and money in ways that support accumulating wealth.
-Their parents couldn't afford to pay for their outpatient care.
-Their grown children are financially independent.

The Millionaire Next Door is a good tool for anyone trying to get their finances under control. It is an easy and interesting read due to its lucid writing style, useful suggestions, and the fact that the insights it offers are relevant to readers of all socioeconomic levels.

As I read The High-Beta Rich: How the Manic Wealthy Will Take Us to the Next Boom, Bubble, and Bust, this book comes back to me. I read it while my son was in college as a "pre-business" (really "I don't know what I want to do") major. I feared he was developing an unrealistic get rich quick attitude so was pleased to discover this book and give him a copy for Christmas. I wouldn't say it changed his life or mine, but it gave us a framework to talk about work and planning which I found useful.

Writing this review more than a decade after reading the book, I don't remember all the details, but I do remember one central point--live below your means. Also I recall that Stanley entertained me with stories about a number of individuals and families to illustrate his points making this a very accessible financial planning book.

To jest książka o tym, czym jest prawdziwy finansowy „majątek” w odróżnieniu od „wyglądania bogato”.

Napisana 20 lat temu czasami jest zabawna z perspektywy obecnego ścisku klasy średniej, niemniej niesie za sobą dużo interesujących wniosków z badań socjologicznych majętnych ludzi.

Na przykład: nasz obraz milionera jest medialną fikcją. Większość z nich nie nosi drogi zegarków, nie wozi się pięknymi samochodami w drogich dzielnicach. Oni nie lubią ostentacyjnego pokazywania się.

Milionerzy grają zespołowo (rodzinnie) gdzie jeden partner jest mocny w ofensywie (zarabianie) a drugi mocny w defensywie (ograniczanie konsumpcji, sensowne zakupy, inwestycyjne okazje).

Większość z nich dorobiło się na nudnych biznesach jak sklepy, przychodnie, usługi hydrauliczne i remontowe itd. Ale dzięki temu ich koszty reprezentacji są niskie (nie muszą dobrze i drogo wyglądać jak na przykład prawnicy).

Ostatecznie książka jest jedną wielką pochwałą oszczędności i konserwatywnego wychowania: na swoje trzeba zarobić i nic nie ma za darmo.

Nie jest to książka wybitna, ma swoje słabe, zupełnie niepotrzebne momenty. Ale nie jest też słaba i wyssana z palca. Dla osób zainteresowanych FI/RE się przyda.

Main message

Save and Invest
Most of the ideas in this book are explained rather well with a lot of good Case Studies.
However, I did not like the idea that we should not give to charity, we all need help, other than that its a real good book

Some people live as they will never die, and die as they had never lived.

It looks much more absurdly when you read about all those "millionairs" who are spending all of their lifetime for meticulous accumulation of wealth accompanied by greed and avarice.

I don't know if there were "researches" conducted by authors indeed, and if all the written is truth. If so, I feel sorry for these poor guys, "millionaires". Having an opportunity to do what they want at least sometimes, they heroically sweep it aside for sake of pure wealth accumulation.

Ok, they've decided to get away from the affairs at the age of 60. I can imagine how it's funny for them, old wrecks, to travel, enjoy summer nights, stare at the ocean, dance in bars, love, enjoy speed of bike/car/surf. At last they can spend their hard-gained money after lifetime spent for calculation of profit and saving...saving...saving!

The book itself generally teaches you only one major thing:
Be greedy. Don't buy nothing you like. Why to buy watches for 500 dollars if there is much cheaper one for 20. Don't travel, it's too expensive. Don't have too much friends, they eat and drink too much. Don't have hobby (except of avarice, of course), it always take your money away. Buy cheapest shoes, clothes, cars. You have only one true hobby - MONEY. And when it's time to die, you can donate all your wealth to some charity or religious organization, to avoid exessive taxation. Sounds as a good plan for you? Go ahead, buy and read this book.

Most Americans believe "wealthy" and "high-income" are synonymous. Surprisingly, most high-income earners are not wealthy; although they earn a lot of money, they don't keep much of it. To be wealthy is not to amass material possessions, but to increase net worth by collecting appreciating assets.

The book categorizes people as PAWs or UAWs; Prodigious Accumulators of Wealth (PAWs) achieve, create wealth, become financially independent, and build from scratch. Under Accumulators of Wealth (UAWs) simply display a high-status lifestyle. Most wealthy people (PAWs) don't drive new cars, buy expensive clothes, or live in upscale neighborhoods.

I read this book because it was recommended by one of my favorite financial authors, Robert Kiyosaki, author of the Rich Dad Poor Dad series. This book explains 7 factors that contribute to wealth-building. These factors aren't set forth in a step-by-step "how to become wealthy" checklist, but are more indirectly investigated through statistics and interviews explaining the behavior of the wealthy.

The briefest formula for wealth given: be frugal, invest, and own a profitable business.

I found it interesting that (as of 1996) self-employed people (entrepreneurs and self-employed professionals) are less than 20% of the American workforce, but 33% of millionaires. Also, 80% of American millionaires are 1st-generation rich, people who earned their wealth rather than inheriting it.

I liked the comparison between budgeting and dieting or exercising. When you see a fit person eating healthy or working out, you're tempted to think "Why do they need to diet and exercise? They're in great shape!" Of course, the reason they're in shape is because of their diet and exercise regimen. The same goes for the wealthy. You might think that they don't need to budget because they're wealthy, but it's often due to their budgeting that they became wealthy.

To determine your expected net worth, multiply your age by your gross (pretax) annual income, then divide by 10.

The 7 factors of wealth

They live well below their means.
Control spending by creating an artificial economic environment of scarcity. Pay yourself first by investing at least 15% of income before spending on anything else.
Minimize realized (taxable) income, maximize unrealized (non-taxable) income.
Sacrifice high consumption today for financial independence tomorrow.
Get a mortgage less than twice your annual income.

They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
Save and invest early. An early start with low income can outweigh a late start with high income.
Invest at least 15% of gross/pretax income.
Follow a budgeting and plan your finances.
Invest passively with a buy-and-hold method to reduce capital gains and turnover.

They believe that financial independence is more important than displaying high social status.
Dollars are like seeds; you can consume them or plant them to grow.

Their parents did not provide economic outpatient care.
The more dollars adult children receive, the fewer dollars they accumulate. Those forced to provide for themselves tend to be wealthier than those who are given financial aid.

Their adult children are economically self-sufficient.
Helping the financially weak generally makes them weaker.

They are proficient in targeting market opportunities.
Offer goods and services to the affluent. Although they're often frugal concerning consumer goods and services, they're not as price-sensitive about investment services, accounting services, tax advice, legal services, medical care, educational products, homes, and products and services for their businesses.

They chose the right occupation.
Sell your intellect; it's portable across industries and geographic locations.

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?