“The Millionaire Next Door: The Surprising Secrets of America’s Wealthy” by Thomas J. Stanley and William D. Danko

the-millionaire-next-door

It’s evident that extensive research has gone into the making of this masterpiece. Thomas J. Stanley studied wealthy individuals for decades before he co-authored this book along with William D. Danko. There are quite a few ‘get rich’ books on the market. This one is undoubtedly special.

The good news is that anyone with a decent job can accumulate a fortune over time. The bad news is that high income does not automatically translate into great wealth. What do the wealthy folks in America have in common? Have they merely inherited a fortune? Not so, say the authors. One thing they all have in common is frugality. We all know of Warren Buffet, but hey, there are dozens of others! And the rich are not who we think they are.

The authors state that affluent persons tend to answer ‘yes’ to three questions they were asked in routine surveys:

  1. Were your parents very frugal?
  2. Are you frugal?
  3. Is your spouse more frugal than you are?

“Most people will never become wealthy in one generation if they are married to people who are wasteful. A couple cannot accumulate wealth if one of its members is a hyper-consumer. This is especially true when one or both are trying to build a successful business. Few people can sustain profligate spending habits and simultaneously build wealth.” So high living is just not cool.

Tighten your belt folks! Take a deep breath. Do you really need that new Lamborghini?

You can also learn new ways of calculating what your net worth ought to be. “Multiply your age times your realized pre-tax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth is what your net worth should be.” Check it out. Do you pass the test? No? Then buy another copy of the book and give it to your spouse.

Overall assessment: Wanna become rich? Try this one!

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy
AUTHORS: THOMAS J STANLEY & WILLIAM D DANKO
PUBLISHER: TAYLOR TRADE PUBLISHING
DATE OF PUBLICATION: 2010

Contributor: Pushpa Kurup lives in Trivandrum, India and works in the IT sector.

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