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The Millionaire Next Door: The Surprising Secrets of America's Wealthy Paperback – November 16, 2010

4.6 4.6 out of 5 stars 15,007 ratings

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The bestselling The Millionaire Next Door identifies seven common traits that show up again and again among those who have accumulated wealth. Most of the truly wealthy in this country don't live in Beverly Hills or on Park Avenue-they live next door. This new edition, the first since 1998, includes a new foreword for the twenty-first century by Dr. Thomas J. Stanley.


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Editorial Reviews

Review

The implication of The Millionaire Next Door...is that nearly anybody with a steady job can amass a tidy fortune. ― Forbes

The kind of information that could lift the economic prospects of individuals more than any government policy...
The Millionaire Next Door has a theme that I think rings very true..."Hey, I can do it. You can do it too!" -- Rush Limbaugh

[A] Remarkable book. ―
The Washington Post

A nerve has been hit....[For] people who want to become wealthy. ―
USA Today

A primer for amassing wealth through frugality. ―
The Boston Globe

An interesting sociological work. ―
Business Week

A fascinating examination of the affluent in American society. ―
The Dispatch (Lexington, NC)

These, for the wise, are tips for all of us....A very readable book. ―
Cox News Service

Debunks the image of the rich as high-living spendthrifts. ―
U.S. News and World Report

I love the book,
The Millionaire Next Door. It talks about how it is a myth that most millionaires in America have inherited their money. The fact is, we have created such a great country over 250 years. We have actually found the way for poor people to go from nothing to huge wealth and to create a life-changing opportunity for their children and grandchildren. We celebrate it, write movies about it, and our libraries are full of books about it. There is nothing wrong with that. -- Bernie Sanders

The authors mine reams of data to show the surprisingly frugal traits millionaires have in common. "The main lesson provided is that high income does not equal wealth," said J.R. Rosskamp, managing director of Veritas Partners, Inc., a business consulting firm. Rosskamp calls "Millionaire Next Door" a "must read, and the earlier the better." ―
Chicago Tribune

The authors mine reams of data to show the surprisingly frugal traits millionaires have in common. "The main lesson provided is that high income does not equal wealth," said J.R. Rosskamp, managing director of Veritas Partners, Inc., a business consulting firm. Rosskamp calls "Millionaire Next Door" a "must read, and the earlier the better."
Chicago Tribune

About the Author

Thomas J. Stanley is an author, lecturer, and researcher who has studied the affluent since 1973. He lives in Atlanta, Georgia.

William D. Danko is associate professor of marketing in the School of Business, University at Albany, State University of New York.

Product details

  • Publisher ‏ : ‎ Taylor Trade Publishing; Reissue edition (November 16, 2010)
  • Language ‏ : ‎ English
  • Paperback ‏ : ‎ 272 pages
  • ISBN-10 ‏ : ‎ 1589795474
  • ISBN-13 ‏ : ‎ 978-1589795471
  • Reading age ‏ : ‎ 5 years and up
  • Item Weight ‏ : ‎ 2.31 pounds
  • Dimensions ‏ : ‎ 5.88 x 0.79 x 9.06 inches
  • Customer Reviews:
    4.6 4.6 out of 5 stars 15,007 ratings

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Customer reviews

4.6 out of 5 stars
4.6 out of 5
15,007 global ratings
great Book!!
5 Stars
great Book!!
Easy to read, helps you understand investing budgeting, and accumulating wealth! Gives realistic examples and scenarios. Definitely recommend
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Top reviews from the United States

Reviewed in the United States on March 25, 2024
This was such an interesting read and I frequently recommend it to others. It includes data behind a study group of self made millionaires, what they have in common, and how they did it. This is a great read for anyone who would like to follow in their path and learn "the secrets to success". My favorite parts were when they talked about what car the average millionaire drives, how much they typically spend on new clothes each year, and their choice of spouse. Very informative and eye opening.
2 people found this helpful
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Reviewed in the United States on March 25, 2024
I've given this book to my nephew and niece. Really good advice for everyone. It's a great book about delayed gratification.
Reviewed in the United States on January 26, 2024
This book is very good for those seeking basic knowledge and understanding of building wealth. I will say that there is nothing groundbreaking in this book but it does give insight on how to manage money for long term wealth. This book is very helpful for younger adults looking to understand what it means to save money and not spend on frivolous things that don’t benefit them in the long term. To the older generations this book just reinforces what most of already should know, wealth is built over time and not overnight.
4 people found this helpful
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Reviewed in the United States on December 2, 2015
This is an excellent, data-backed look at what the wealthy look like in the United States. Contrary to popular belief, most wealthy people do not drive Teslas and eat caviar. They are not tech CEOs or Wall Street financiers. They are small business owners and self-employed professionals who probably drive a 3-year old BMW or a Ford pickup truck or SUV. They probably wear a Seiko watch, not a Rolex. They probably wear a suit bought from Men's Wearhouse, not Brooks Brothers. They probably have a run-of-the-mill Visa credit card, not something from Sak's Fifth Ave.

Some of the many useful insights and takeaways from this book:

A Useful Definition of Wealth -- Wealth is much more than how much money you pull in every year and how much your house costs. It's more a reflection of your investments and how much money you save. Not how much you spend. There are a lot of people who pull in a ton of money every year but live paycheck-to-paycheck.

Wealth and income are not the same thing -- Not all wealthy people pull in a hefty income. In fact, many purposely pull in relatively low incomes in order to reduce their tax obligations. Ross Perot is a great example of this (when the book is written). Perot pays millions in taxes, but is worth billions. Even your neighbor next door might be a millionaire, but maybe the household only brings in $79,000 a year.

Most Millionaires Are Self-Made -- While children of millionaires are more likely to become millionaires, very few millionaires (less than 20%) are not self-made millionaires. In fact, regular handouts from parents make it less likely that an individual will become a millionaire someday. Most millionaires worked for their money and were not constantly given Economic Outpatient Care (EOC) from their parents.

Frugality Reigns Supreme -- The authors give a great analogy about building wealth. You can play a great offensive (i.e. pulling in money) and you can make a great defensive (i.e. saving your money and preserving your wealth). Playing a great offensive is wonderful, but it is really only useful for building wealth if you don't play a great defensive too (some people are capable of playing such a great offensive that the defensive really isn't important, but this is very few people). They buy discount suits, discounted new cars or used cars, they rely on very, very little credit, and status symbols aren't all that important to them.

Mindset Matters -- Most millionaires are not worry-warts. The only things they really worry about are government policies that will destroy their livelihoods, but even then, they know that they can't really control the outcome of these issues directly, so they only give so much effort and so much weight to these decisions.

My only quasi-criticism of this book is that the data are from 1992-1996 and the book was written in 1996. This obviously isn't the fault of the authors, and some of the conclusions are reinforced in a 2010 preface, but just take some of the data with a grain of salt. Take inflation and general industrial changes into account.

Well worth the read, especially if you are looking to join the ranks of the Prodigious Accumulators of Wealth or work with them.
14 people found this helpful
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Reviewed in the United States on February 29, 2024
I read this book thirty years ago and it profoundly influenced my financial decisions. When my son graduated from college I gave it to him. Recently I sent a copy to a niece and nephew who are just starting out. This is a must read for everyone but especially for young people just starting out. it explains how to become wealthy without gimmicks or get rich quick schemes.
4 people found this helpful
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Reviewed in the United States on March 22, 2024
Great book that gives you the insight to become wealthy - if you have the mental drive to do.
It heralds the frugal and dismisses the spendthrift.
Reviewed in the United States on June 3, 2017
This book was not at all what I was expecting, but contains some good advice that many would benefit from. For some background, my wife and I are relatively young and have career jobs. I bought this book for information on making the most of any extra income, learning more about investing strategies, options for generating passive income, and improving my personal finances. I did learn a few things, but not on these topics (maybe a bit on the last point). The book primarily focuses on interesting finds and anecdotes from the authors' years of research on millionaires in America.

The book is divided into eight chapters:
1. Meet the Millionaire Next Door
2. Frugal Frugal Frugal
3. Time, Energy, and Money
4. You Aren't What You Drive
5. Economic Outpatient Care
6. Affirmative Action, Family Style
7. Find Your Niche
8. Jobs: Millionaire vs. Heirs

The author essentially splits everyone into two categories: Underaccumulators of Wealth (UAWs) and Prodigious Accumulators of Wealth (PAWs). UAWs have a low net worth relative to income, and the opposite for PAWs and uses these terms throughout the book.

His primary argument is that PAWs get to be wealthy by living well below their means - these are people who do not look like millionaires, they live in modest neighborhoods, drive domestic sedans, wear a Timex, and usually have a blue-collar job that does not come with an expensive lifestyle associated and as a result can accumulate a sizeable nest egg. On the other hand, UAWs are typically well-educated professionals with high paying and high profile jobs (doctors, attorneys), but due to societal pressures associated with their social standing are forced to squander all their money living in luxury neighborhoods, driving German cars, and sending their kids to private schools. Their expensive lifestyle means that they spend most of their income and as a result have a low net worth, despite outward appearances.

I agree that this is good advice for just about anyone: live below your means and prioritize financial security over social standing. Growing up in a single-income family living in a modest middle class neighborhood, I'm quite used to the live-below-your-means philosophy and I think it gave me at least some sense of good financial discipline. If my parents are any indication, it works great.

Where the authors really lost my interest is that the rest of the book is chock full of anecdotes and some rather uninformative statistics to drive a few other points home. While some of these are good points and undoubtedly useful, they always seem to come with caveats or don't draw any real conclusion, which I found frustrating. Most of the points could have been made succinctly in about 1/10 the amount of page space the authors dedicate to them. These include:

- Most millionaires in America are self employed business owners, because they run their personal finances like their business finances. However, going into business for yourself is very risky so we don't really recommend that as a viable way to get rich.

- Very few millionaires have ever spent much money on a nice suit, pair of shoes, or luxury watch. They usually live in modest neighborhoods or rural areas where the cost of living and social pressures of consumerism are lower.

- First generation millionaires (often immigrants) tend to be succeeded by children with financial struggles, since the parent's desire to "give them a better life" pushes them into careers where they become UAWs, and their upbringing in our consumerist culture impedes their ability to live frugally. But even if it turns them into UAWs, encourage them to go to college and aspire to a while-collar professional job.

- Parents giving money to their children develops and reinforces poor financial habits. This money is almost always immediately spent, and these children generally have no savings since they are looking to their parents as their safety net and counting on an inheritance. Doing things like buying children a house in an upscale neighborhood or sending grandkids to a private school actually makes the children worse off, since they have to spend more to maintain the associated lifestyle.

- The authors spend an inordinate amount of time and space comparing different careers, which I found next to useless since I'm very happy with my chosen career (Engineer) and have no intention of changing. They continually deride pretty much every professional job you can think of, and simultaneously praises how great working for yourself or owning a business is while going on about how difficult and risky it is to actually own a successful business. The author does not recommend changing careers, but again, this is more of a discussion of what their research has shown than any sort of "how to" advice.

- Car buyers fall into four categories: whether you buy new or used, and whether you buy from the same place or shop around. The authors devote an entire chapter to this while only coming to the following conclusions: no method of buying a car is the clear winner, but if you own a business you may benefit from your connections with the owners of car dealerships; and most millionaires drive unassuming domestic (and to a lesser extent, Japanese) cars purchased new or lightly used.

A final note - curiously, I found no mention of anything real-estate related, which to me is highly unusual in any sort of book about building wealth. The only investment advice found here is in the final chapter and could be summarized as "invest in what you know." That is, if you work in a certain sector, your knowledge of the industry will help you make good investment decisions. Not sure how I feel about this one. For example: not working in technology doesn't mean blue-chip tech stocks are a bad investment. Take it with a grain of salt.

One last complaint: most of the financial figures are presented in mid-1990s dollars. I found it frustrating to have to mentally convert to today's dollars to get a relative sense. The authors took the time to update the preface in 2010, it would have been nice to see a revision to the figures quoted throughout the book. (For reference, one 1996 dollar is worth about 1.6 dollars in 2017).

In summary, I was surprised about the amount of praise heaped on this book. I would hardly categorize it as a self-help book, it's more a retrospective on the authors' research and a collection of anecdotes and interesting conclusions about the countless Americans leading unglamorous lives while accumulating appreciable amounts of wealth. It's a quick read and I made it through the whole book on a 5-hour flight with time to spare. I would only recommend this book as an interesting overview of some good financial habits, or as an eye-opener for those with luxurious financial tendencies who struggle to save money despite their income level. However, for those who have already developed some discipline and are looking for detailed strategies and advice on personal finance and building wealth via investments and generating passive income, look elsewhere.
3,036 people found this helpful
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Top reviews from other countries

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Vances
5.0 out of 5 stars You must Read!
Reviewed in Canada on February 23, 2024
"The Millionaire Next Door" by Thomas J. Stanley and William D. Danko examines the habits and characteristics of millionaires in America. The book reveals that many millionaires are ordinary people who accumulate wealth through disciplined saving, frugal living, and smart financial decisions rather than flashy spending.live below your means. Awesome book. Highly recommended!
One person found this helpful
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Rafael Ladeira
5.0 out of 5 stars Recomendo totalmente a leitura desse livro
Reviewed in Brazil on November 15, 2022
Atualmente comprar um livro com material de qualidade é difícil, esse possui capa dura verdadeira, folhas e impressão de qualidade. Certamente o que mais importa é o conteúdo e ele foi muito bem elaborado, traz muitas sugestões e experiências reais de pessoas bem sucedidas, detalhado o que fazer e não fazer de acordo com o histórico de diversas pessoas. Não é preciso ser ou querer ser um milionário para que esse livro seja de grande valor para você, ele pode te ajudar a ser ter uma vida mais tranquila financeiramente ou apenas te ajudar a ser uma pessoa melhor, o que já valeria a leitura.
Armando Guzmán
5.0 out of 5 stars FRUGAL Y DISCIPLINADO
Reviewed in Mexico on September 23, 2022
Me encantó la manera de demostrar como millonarios no son lo que nos venden en la televisión, de gente despilfarradora y lúcida, sino de gente frugal y con un negocio propio
LFJ
5.0 out of 5 stars Fantastic guide to financial stability
Reviewed in Sweden on September 9, 2023
Yes, read 141 out of 250 pages so far but I am so impressed with the financial advise. Great book. Recommended to everyone with any sort of income.
Ben Pardo Garcia
5.0 out of 5 stars Most millionaires are actually self made
Reviewed in Spain on November 6, 2022
Frugality, planning and humbleness can make you a millionaire. Exactly the opposite of what we are told.