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.

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

Short and sweet. The main premise is that conspicuous consumption does not a millionaire make. Hard work (especially in the form of small business owner) and frugality are more predictive of wealth accumulation.

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

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.

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

It was a lot and I DNF 100%. Essentially it's the same as every other financial planning book. Be smart with your money, don't buy on credit, live an appropriate lifestyle not that of the rich and famous because in end you don't need to keep up with the Jones.

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.

(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 learned that there are seven characteristics or common denominators among millionaires in America.

They are:

1.They live well below their means - They are frugal,frugal, frugal. They make more than they can spend. Pretty cool.

2.They allocate their time, energy, and money efficiently, in ways conducive to building wealth - How else did they get there right? Well this goes for those millionaires who didn't inherit their wealth.

3.They believe that financial independence is more important than displaying high social status - Practical. You can display high social status all you want, but if you're still dependent on active income then you're one very vulnerable fella.

4.Their parents did not provide economic outpatient care - Pretty good training ground, don't you think? They train their kids to be survivors and in the end, to be winners. This is the best legacy they can leave to their children.

5.Their adult children are economically self-sufficient -Pass on the buck right? That's why the rich get richer and the poor get poorer.

6.They are proficient in targeting market opportunities - Now this is one handy skill I want to get my hands on.

7.They chose the right occupation - Right! To wake up everyday itching so badly to get yourself to do the things you love. Ain't that a ball!

Learn from this. The lessons and ideas may seem repetitive, but the author is really trying so hard to drive home a point. We need to learn the lessons. He want us to. Well, we ought to. =)

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.

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.