The Millionaire Next Door

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The Millionaire Next Door The Millionaire Next Door (Thomas J. Stanley and William D. Danko) provides an outlook of households of the wealthy (at least one million dollars net worth ) and high income earners. (Based on 20 years of research the authors produce statistics and studies from these people to provide insight of typical millionaire households contrary to what is believed and seen on television. Only a small percentage of millionaires actually live a lavish lifestyle that we often see on television and are typically people who live in average neighborhoods; hence the title “The Millionaire Next Door.”) The Authors indicate 7 characteristics of the successful wealth builder: 1. They live well below their means. Generally, millionaires are frugal. They make it a point to save their pennies as Ben Franklin says, “A penny saved is a penny earned” and the wealthy live by this that means no star bucks lattes. They will pay for quality not for image. As stated in the book by one millionaire gentleman, “When my shoes are getting rough I would rather take them to get them repaired than buy a new pair it’s cheaper that way”. 2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth. Millionaires plan, plan, plan and budget, budget, budget. As the book states, “The typical millionaires see their financial advisor and their tax consultant frequently.” The affluent begin earning and investing early in life. The authors note that “there is an inverse relationship between the times spent purchasing luxury items such as cars and clothes and the time spent planning one’s financial future”. In other words, the more time someone spends buying the top of the line stuff or things that are the latest trend, the less time they spend on their financial future. 3. They believe that financial independence is more
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