Aron's Reviews > The Millionaire Next Door

The Millionaire Next Door by Thomas J. Stanley
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Aug 07, 11

bookshelves: economics-politics
Read from August 05 to 07, 2011 — I own a copy

Like the last book I read (Rich Dad, Poor Dad), this is a book of general advice on wealth accumulation. It's an interesting take on the topic because the authors spent significant portions of their lives analyzing the wealthy here in the US, and they try to capture the life lessons of the wealthy in seven rules. Those rules are, in my words:

1) be extremely frugal, and teach your children the value of doing so
2) invest time regularly into learning how to invest
3) avoid displaying status symbols and accumulating toys
4) don't economically coddle your children, but don't avoid helping with educational costs
5) teach your children to be economically self-sufficient
6) work to increase your awareness of good marketing opportunities
7) going into business for yourself will allow you more freedom to spend time learning about your business, and that knowledge can be used for investing purposes

Some other things worth noting: despite their frugality, most successful millionaires feel you get what you pay for in terms of financial services; they often pay their brokers and advisors well. They put a lot of effort into avoiding excessive taxation, and so bank heavily on investments that don't have cash payouts. Most invest at least 20% of their income, and a large portion of their investments are in very standard, "boring" companies that provide very standard, boring services or products that everybody needs but may not think about.
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Comments (showing 1-2 of 2) (2 new)

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Pete Your points are interesting to see. I got hung-up in the PAW "formula," which we are obviously not part of the target audience as it takes about 10 years of significant income, assuming their savings rate.


Aron Yea, I found that a little frustrating, but then I completely glossed over it for the reason you just mentioned. No student or recent student could ever fit that formula.


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