Who do you think of when you think of a millionaire? Celebrities and athletes?
Have you ever thought: anyone who has xyz millions of dollars must have a yacht, a 6,000 sq ft. mansion, and their own personal chef? Or, if I made double or even triple what I do now, then I’d buy a fancy sports car and a much bigger house?
Do you think it would be easy to spot a millionaire if you saw one? How could you tell?
Thomas Stanley and William Danko, the authors of “The Millionaire Next Door,” give ample evidence of an eye-opening truth that is the exact opposite of the lifestyles seen on MTV’s Cribs:
Most millionaires in America are not living an uber-glamorous “luxury” lifestyle. And most aren’t celebrities or athletes.
Stanley and Danko interviewed many millionaires over 20 years and assembled their findings into this book. It’s a fascinating look into the mindset and values of people who have reached the top 4% of America; most of them are “first-generation” millionaires. One of the biggest values seen over and over in the interview responses of the most successful people was frugality in every area of life (it was surprising to find that most millionaires spend almost the same amount on cars that middle class America does).
One illustration showing the power of frugality was a contrast between a mobile home park owner and an accountant. They both had similar salaries, and yet the mobile home park owner was a millionaire and the accountant was not (due to his more lavish lifestyle). The authors said that they get asked frequently, “what job will most likely lead to me being a millionaire?”. They don’t have an exact answer (the interviewees came from all walks of life); they essentially said that it’s more about a person’s ability to live below their means and less about a specific job title. This isn’t a new idea, but it gives hope in the sense that you don’t have to be the CEO of Amazon or Google to retire well.
What struck me the most was the authors’ idea of being “offensive” and “defensive” when it comes to our finances- the authors point out that you need both to truly do better financially: ways to increase your income, whether that’s a different job, an additional side job, investing, etc. (offensive strategies), while simultaneously budgeting, saving, and living below your means (defensive strategies). It can be difficult to be good at all of these at once- but being self-reflective in recognizing the area(s) we are less strong in (and thinking of ways to improve them) is a good start.
There’s a reason this book is an Amazon best seller- almost everyone is curious about how other people live, and the strategies, data, and advice the book contains are very much tried-and-true common sense (no false promises of “here’s how to get rich quickly” or “just believe and you will attract prosperity”). And here’s a bonus: this book has a “read for free with Kindle library” option on Amazon right now so you don’t even have to pay for all of its insights.
If you’re looking for discussions on these topics, I enjoy the perspectives (and list of resources in the sidebars) at:
Book image from amazon.com