Millionaire Next Door

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Book Summary: Dr. Thomas J. Stanley wrote ‘The Millionaire Next Door’ after doing extensive research in gathering statistics and case studies of today’s millionaires in America. He immediately addresses the culture’s false view of a millionaire. There is a great difference in being rich and being wealthy in today’s society. The research Dr. Stanly has done gives seven common denominators among those who have successfully accumulated large amounts of wealth. The statement that outlines the course of the book is “sacrifice high consumption today for financial independence tomorrow.” Application: After reading this book, I now have a different outlook on how to be successful with my finances. Just because a person earns a high pay salary does not necessarily mean that they are wealthy. The amount of money a person stores and invests is what truly measures that person’s wealth. Millionaires are not the high-spending, self-consumed people that we tend to imagine. To become wealthy, one must become frugal. Being frugal is the cornerstone of long-term wealth. The road to becoming wealthy is defined in one word; sacrifice. This means sacrificing the high-dollar mansion with an indoor swimming pool one might dream of obtaining, and instead living in a middle-class neighborhood with neighbors that are valued at a fraction of your net worth. There are two different type of people according to the book. First there is UAW’s, which are under accumulators of wealth, and PAW’s, which are prodigious accumulators of wealth. PAW’s are the millionaires of today. A PAW is worth at least twice the amount of annual income they bring in. Majority of millionaire PAW’s are first generational, meaning they reached millionaire status on their own without inheriting financial support from relatives. In order to become wealthy, one must learn not just how to play offense with their

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