Selection Bias at it’s worst.

I drink Coke daily because Billionaire Buffett does it.
I smoke because Billionaire YY does.
I take drugs because Billionaire YX does it.

I follow the habits of the rich will I get rich now?

Plus the author leaves out all the soft factors (like having some fun with you’re hard earned wealth)

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.

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.

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.

The essence of this book is probably: (1) millionaires live a more normal, down-to-earth lifestyle than you would expect, and (2) frugality is more important than (high) income. On a more detailed level, I found the aspect of minimizing one's realized profit quite enlightening.

Overall a good and enjoyable read. Sometimes a bit too many statistics and numbers for me - but I guess that's really the core of this book.

Nuts ‘n bolts: the wealthiest people live frugally. If you want wealth, be frugal.


“I’m not impressed with what people own, but I am impressed with what they achieve. Always strive to be the best in your field, and don’t chase money. If you are one of the best in your field, the money will find you.”

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.

Very interesting and insightful though a bit repetitive at times. Much more focused on the "what" and "how" of wealth accumulation without much at all on the "why."

I can't help but wonder how the book's principles have weathered through the last couple of decades and - in particular - the high-profile cases of tech company values growing immensely and quickly. Are there enough shareholders benefitting from such that they would change the numbers undergirding the book? And - if so - do the lifestyles and habits of those shareholders match those of the folks highlighted in the book?

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.

Some of the best ideas and strategies are simple, resistant to change as well as efficient. Thomas J. Stanley's book delivers a good perspective and insight into wealth and how modern people accumulate and, most importantly, keep it. I enjoyed seeing the confirmation of the display of status as a marker of insecurity and a wealth that won't last long, because it doesn't incorporate the same fundamental concepts that generated it in the first place. Books like these not only give me hope by making the goal seem more realistic and achievable, but make me more focused on acquiring my own wealth. A pretty good read overall.

(The English review is placed beneath Russian one)

Книга из того же разряда что и «Богатый папа, бедный папа», «Думай и богатей» и так далее. Тут, как в книгах того же Карнеги, авторы делятся своими мыслями и в качестве примера приводят данные миллионеров, которых они анализировали. Да, книгу нельзя обозначить как полностью основывающуюся на мнении автора, однако я всё же считаю, что этих неназванных миллионеров всё же недостаточно, чтобы книгу можно было бы отнести к серьёзному научному труду. В принципе, это и не важно, т.к. смысл книги представляет собой классическую самопомощь.
Разумеется, не стоит ждать от книги, что после прочтения читатель сразу станет миллионером. Ждать такого очень наивно и глупо. Однако в книге есть несколько интересных советов, которые и сформировали моё отношение к данной работе. Правда нужно признаться, что мне понравилась только первая половина книги, вторая же не пришлась по душе совсем, т.к. не смотря на продолжение советов, я всё же нашёл их довольно скучными, что, в конечном счете, вылилось в то, что последнюю четверть я уже не стал читать. В общем, я сосредоточусь только на первой половине книги.
И последнее, о чём бы я хотел бы упомянуть, это год издания книги – 1995. Это было время когда интернет ещё не получил такого сильного распространения даже в самих США и поэтому одним из главных источников распространения советов по самопомощи являлись книги и журналы. Это важно, т.к. в отличие от того же Карнеги, авторы предлагают не так много советов. Другими словами, книга уже устарела. Многое из того что пишут авторы многие люди уже давно прочли в интернете или увидели на YouTube.
Итак, касаемо тем. Главная идея авторов заключается в том, чтобы научиться: 1. Не тратить деньги на лишние предметы и 2. Научить детей ценить деньги, т.е. не растрачивать их, но наоборот, инвестировать. Я хочу отметить, что это я так понял книгу. Автор, буквально таких двух предложений не писал.
Тем не менее, книга начинается с вопроса, что миллионеры не покупают дорогие костюмы, часы и пр. Сразу вспоминаются фотографии Билла Гейтса и Стива Джобса, которые внешне мало чем отличаются от обычных людей. Т.е. нет дорогих яхт, ни роскошных дорогих автомобилей (коллекций автомобилей), ни замков. Авторы пишут, что миллионеры избегают ненужных трат, без которых можно спокойно прожить. Стоит отметить, что миллионер - это всё же не Билл Гейтс, который является уникальным примером, а скорее, это человек из среднего класса который на протяжении своей жизни экономил, а сэкономленные деньги вкладывал в рынок акций и облигаций, но не с целью игры на нём, постоянно покупая и продавая акции, а исключительно покупая акции на долгосрочную перспективу (авторы это особо подчеркивают, что и заставило меня накинуть книги дополнительный бал). Собственно, книга рисует именно такого человека и поэтому следующий вопрос – кредитные карточки – кажется вполне логичным. Автор пишут, как можно уже догадаться, что миллионеры не используют кредитных карт. Совсем. В общем, мы видим складывающийся портрет обычного человека, который просто экономит и инвестирует в stock market, а также, разумеется, следит за своими тратами. Этот портрет автор рисует на протяжении первой половины книги. Ближе к середине, автор будет упоминать автодилеров, однако в этом пункте я что-то совсем не понял мысль автора.
Вторая часть книги больше адресована стилю воспитания детей, чтобы они развили в себе навыки миллионеров и тут главным вопросом будет: как богатым родителям не испортить своих детей деньгами, как не отбить у них желание экономить и инвестировать. Однако, как я сказал, данная часть книги мне показалась скучной и излишне затянутой. В принципе, всё написанное можно спокойно уместить в ролике на 10 минут на YouTube.

The book is of the same category as "Rich Dad, Poor Dad," "Think and Grow Rich," and so on. Here, as in the books of the Carnegie, the author shares his thoughts and gives an example of the data of millionaires, whom they analyzed. Yes, the book is not based entirely on the author's opinion, but I still think that these unnamed millionaires are not enough to make the book a serious scientific work. In principle, it does not matter, because the essence of the book is classic self-help.
Of course, it is not worth waiting from the book that after reading it, the reader will immediately become a millionaire. It's very naive and stupid to expect such a thing. However, the book has some interesting tips, which formed my attitude toward this work. However, I must admit that I liked only the first half of the book, but the second half did not like it at all, because, despite the continuation of the advice, I found them quite boring, which eventually led to the fact that the last quarter I did not read. Anyway, I will only focus on the first half of the book.
And the last thing I'd like to mention is the year the book was published, 1995. It was a time when the internet had not yet become so widely spread even in the USA itself, and books and magazines were one of the main sources for distributing self-help tips. It's important because, unlike the same Carnegie, the authors do not offer much advice. In other words, the book is already outdated. A lot of what the authors are writing about, many people have read it on the internet or seen it on YouTube.
So, regarding topics. The main idea of the authors is 1. Not to spend money on unnecessary items and 2. To teach children to value money, i.e., not to spend them, but on the contrary, to invest it. I want to note that this is how I understood the book. The author did not literally write such two sentences.
Nevertheless, the book begins with the idea that millionaires do not buy expensive suits, watches, and so on. It reminds me of the photos of Bill Gates and Steve Jobs, which seem to differ little from ordinary people. That is, there are no expensive yachts, no luxurious cars (car collections), no castles. The authors write that millionaires avoid unnecessary spending, without which one can live well. One should note that a millionaire is not Bill Gates, which is a unique example, but rather a man from the middle class. Who throughout his life has made savings, and the savings invested in the stock and bond market, but not for the purpose of gaming on the market, buying and selling shares, but who purchasing shares for the long term. In fact, the book draws such a person, and so the next question - credit cards - seems quite logical. The author writes, as you can already guess, that millionaires do not use credit cards. In general, we see a portrait of an ordinary man who makes savings and invests in the stock market, and, of course, keeps an eye on his spending. The author draws this portrait during the first half of the book. Closer to the middle, the author will mention the car dealers, but in this paragraph, I did not understand the author's idea.
The second part of the book is more focused on how to raise children so that they develop the skills of millionaires. And here the main question is: what wealthy parents should do to avoid spoiling their children by money, how not to discourage them from saving and investing. However, as I said, this part of the book seemed to me boring and unnecessarily long.

I knew it's a good book and has heard about it hundreds of times in financial podcasts, books, articles, and blog posts. However, I never expected it to be this good and eye-opening.

It confirmed several of my suppositions regarding building wealth, frugality, education for my future children, and growing a family. Speaking about money has been important for me over the past several years. I'm constantly learning about the power of money and how to do more good with it.

Thomas J. Stanley shares a book full of wisdom, data, and statistics to prove you don't need a luxury house, car, or trust funds to live a happy life. He also confirms that rich people that look rich aren't actually rich. If they have an expensive watch, luxury vacations, and last model cars - they actually have a much lower net worth than someone having a regular job and investing on a monthly basis.