Thomas J. Stanley's Blog
August 6, 2015
Not Ready for The Real World
- They might ask their parents to get involved with
their challengesandnbsp;at college (e.g., having parents ask professors to
change gradesandnbsp;or calling admissions
offices).andnbsp;
- They fail to begin the basics in
financial management, from planning to saving for
retirement.
parents may have fewer competencies required for success on
the job. As summarized in the Washington
Post:
Data Points'
blog.
June 20, 2015
Words of Wisdom: Networking and Opinion Leaders
by Sarah S. Fallaw, Ph.D.President,andnbsp;Data Points
While going through some training materials in my father's
archives this morning, I found a section that defined
networking via an example geared towards
attorneys.andnbsp;Regardless of your industry, it is a great
summary for effective business development and was the focus
of the bookandnbsp;Networking
with the Affluent, published this month back in
1993.andnbsp;
From his workbook:
What is Networking?
Networking is the essence of high-performance marketing.
Networking is influencing the people who influence the
patronage behavior of dozens, hundreds, even thousands of
important prospects.
Ordinary professionals target ordinary prospects. In
sharp contrast, extraordinary networkers target prospects
who are opinion leaders of major affinity groups. Imagine
the impact on the revenue of an ordinary lawyer if he or
she is endorsed by the president of a trade association
whose members include hundreds of potential clients. It
happens.
How does an endorsement of this kind come about? The
transformation of an ordinary legal professional into an
extraordinary networker begins with targeting. The very
best networkers identify and then prospect the advisors and
role models of groups of clients.
These opinion leaders have a significant influence on
the choice of suppliers, especially lawyers. Hiring
providers like attorneys is typically associated with
moderate to high risk. Hence, most buyers attempt to reduce
this risk by choosing suppliers that opinion leaders
endorse.
- Thomas J. Stanley
While going through some training materials in my father's
archives this morning, I found a section that defined
networking via an example geared towards
attorneys.andnbsp;Regardless of your industry, it is a great
summary for effective business development and was the focus
of the bookandnbsp;Networking
with the Affluent, published this month back in
1993.andnbsp;
From his workbook:
What is Networking?
Networking is the essence of high-performance marketing.
Networking is influencing the people who influence the
patronage behavior of dozens, hundreds, even thousands of
important prospects.
Ordinary professionals target ordinary prospects. In
sharp contrast, extraordinary networkers target prospects
who are opinion leaders of major affinity groups. Imagine
the impact on the revenue of an ordinary lawyer if he or
she is endorsed by the president of a trade association
whose members include hundreds of potential clients. It
happens.
How does an endorsement of this kind come about? The
transformation of an ordinary legal professional into an
extraordinary networker begins with targeting. The very
best networkers identify and then prospect the advisors and
role models of groups of clients.
These opinion leaders have a significant influence on
the choice of suppliers, especially lawyers. Hiring
providers like attorneys is typically associated with
moderate to high risk. Hence, most buyers attempt to reduce
this risk by choosing suppliers that opinion leaders
endorse.
- Thomas J. Stanley
June 3, 2015
History: Wealthy Blue Collar Segment
How did the concept of The Millionaire Next
Doorandnbsp;begin? Below is a bit of history, originally published on the timeline:
When did Dr. Stanley first profile the Millionaire Next
Door population? Originally he used a different title in
defining this segment. Dr. Stanley first coined the
"Wealthy Blue Collar Segment" in a paper he wrote
entitled "Market Segmentation: Utilizing Investment
Determinants." He presented this paper on October 10, 1979
at the sales/marketing conference of the Securities
Industries Association held in New York City.andnbsp;
The paper was later published under the title of "Brokers
to Use Proactive Market Segmentation for Success in the
'80s" on November 30, 1979 by The American Marketing
Association. Earlier, in May 1979, Stanley was asked by the
New York Stock Exchange to develop a set of marketing
implications and recommendations based upon its then
recently completed national survey of the investment
patterns and attitudes of 2,741 households. This provided
the base for the paper cited above.
A key point made by Stanley in his paper is as follows:
...the (investment) industry has attracted a high
portion of customers who are or aspire to be upper middle
class...Look at other segments for new life support.
Opportunities exist in segments that they industry has
ignored for years...(members of) the "really big
segment"...the Wealthy Blue Collar do not need to purchase
the expensive artifacts that are part of the white collar
worker's status knapsack...the discretionary income of the
Wealthy Blue Collar segment presents a great
opportunity...in terms of population and long run
potential.
At the time of Stanley's presentation he realized that the
blue collar/millionaire next door segment did exist and
that it was likely to be a sizeable one, yet ignored by
many marketers. Not long after he identified this market,
he discovered how very large it indeed was.
Doorandnbsp;begin? Below is a bit of history, originally published on the timeline:
When did Dr. Stanley first profile the Millionaire Next
Door population? Originally he used a different title in
defining this segment. Dr. Stanley first coined the
"Wealthy Blue Collar Segment" in a paper he wrote
entitled "Market Segmentation: Utilizing Investment
Determinants." He presented this paper on October 10, 1979
at the sales/marketing conference of the Securities
Industries Association held in New York City.andnbsp;
The paper was later published under the title of "Brokers
to Use Proactive Market Segmentation for Success in the
'80s" on November 30, 1979 by The American Marketing
Association. Earlier, in May 1979, Stanley was asked by the
New York Stock Exchange to develop a set of marketing
implications and recommendations based upon its then
recently completed national survey of the investment
patterns and attitudes of 2,741 households. This provided
the base for the paper cited above.
A key point made by Stanley in his paper is as follows:
...the (investment) industry has attracted a high
portion of customers who are or aspire to be upper middle
class...Look at other segments for new life support.
Opportunities exist in segments that they industry has
ignored for years...(members of) the "really big
segment"...the Wealthy Blue Collar do not need to purchase
the expensive artifacts that are part of the white collar
worker's status knapsack...the discretionary income of the
Wealthy Blue Collar segment presents a great
opportunity...in terms of population and long run
potential.
At the time of Stanley's presentation he realized that the
blue collar/millionaire next door segment did exist and
that it was likely to be a sizeable one, yet ignored by
many marketers. Not long after he identified this market,
he discovered how very large it indeed was.
May 22, 2015
Researching Wealth and Identifying Potential
Data collection is underway for a follow up study on wealth in America, the first reported by my father, Thomas J. Stanley, in The Millionaire Next Door. In addition to examining some of the timeless areas such as asset allocation and automobiles, we have included new fields of study, particularly in behavioral finance. Quick anecdote: one of the more animated discussions I had with my father as we crafted the survey was whether we should include "jeans" as a category for spending.
The application of his work to the assessment to the assessment of client wealth potential continues. Data Points, for which my father served as chief advisor from 2013-2015, will be releasing its beta Building Wealth Assessment������� (a.k.a., The Millionaire Next Door Test�������) for individuals and advisors in beta form later this summer. Please sign up here to receive updates on our assessment and reporting products.andnbsp;
The outpouring of tributes to my father and his work after his untimely death has been overwhelming. andnbsp;Please see Nick Murray��������s kind review in Financial Advisor magazine. andnbsp;Many people have benefited from his research and his publications over the past 30 years. Therefore, as I mentioned previously, the research will continue.
The application of his work to the assessment to the assessment of client wealth potential continues. Data Points, for which my father served as chief advisor from 2013-2015, will be releasing its beta Building Wealth Assessment������� (a.k.a., The Millionaire Next Door Test�������) for individuals and advisors in beta form later this summer. Please sign up here to receive updates on our assessment and reporting products.andnbsp;
The outpouring of tributes to my father and his work after his untimely death has been overwhelming. andnbsp;Please see Nick Murray��������s kind review in Financial Advisor magazine. andnbsp;Many people have benefited from his research and his publications over the past 30 years. Therefore, as I mentioned previously, the research will continue.
May 3, 2015
Recommended Reading from Nick Murray
In a recent edition ofandnbsp;Financial Advisor magazine,andnbsp;Nick Murrayandnbsp;wrote a piece on
The Millionaire Next Door and Dr. Thomas J. Stanley's
life. Mr. Murray, an expert in his own right, discusses the
book in the context of the time it was written and the way in
which stories were blended with statistics to illustrate how
seemingly average individuals could be wealthy. It reads in
part:
He had me at hello: literally from page one, where Tom had written, “Wealth is what you accumulate, not what you spend†– very much not a widely-held perception in those roaring ‘90s! But then he went on to prove it, in page after page of delightful stories laced with conclusive (but never obtrusive) statistics.
Likewise, Mr. Murray suggests the benefits of reading (or
rereading) the book as a means to understand clients and
oneself.
If you’ve never read The Millionaire Next Door – and especially if you have, but not for a while – put it at the top of your list. It cannot fail to galvanize your thinking about the kind of prospective clients you really want, and about what a joy it is to work with them. Indeed, it may even focus you more clearly on the kind of person you want to be – as I’m quite sure it did me.
One of the most interesting features of the article was the
uncanny similarities between the two experts, and Mr.
Murray's writing summarized them
beautifully.andnbsp;The
full article is available here.
The Millionaire Next Door and Dr. Thomas J. Stanley's
life. Mr. Murray, an expert in his own right, discusses the
book in the context of the time it was written and the way in
which stories were blended with statistics to illustrate how
seemingly average individuals could be wealthy. It reads in
part:
He had me at hello: literally from page one, where Tom had written, “Wealth is what you accumulate, not what you spend†– very much not a widely-held perception in those roaring ‘90s! But then he went on to prove it, in page after page of delightful stories laced with conclusive (but never obtrusive) statistics.
Likewise, Mr. Murray suggests the benefits of reading (or
rereading) the book as a means to understand clients and
oneself.
If you’ve never read The Millionaire Next Door – and especially if you have, but not for a while – put it at the top of your list. It cannot fail to galvanize your thinking about the kind of prospective clients you really want, and about what a joy it is to work with them. Indeed, it may even focus you more clearly on the kind of person you want to be – as I’m quite sure it did me.
One of the most interesting features of the article was the
uncanny similarities between the two experts, and Mr.
Murray's writing summarized them
beautifully.andnbsp;The
full article is available here.
April 25, 2015
Continuing the Journey: Data Points
One of the projects my father and I were working on before his
death was a new company called Data Points. Based on his
research and data, I created a company to provide financial institutions and
individuals a way to determine individual wealth potential using assessments and reporting.
My father was my chief advisor and mentor. I have sought the
input of other experts, too: those with expertise in
technology, business, and psychometrics. Today, I announced
the advisory board for Data Points, and I am grateful to be
able to continue on this journey with their wisdom and
advice.andnbsp;
death was a new company called Data Points. Based on his
research and data, I created a company to provide financial institutions and
individuals a way to determine individual wealth potential using assessments and reporting.
My father was my chief advisor and mentor. I have sought the
input of other experts, too: those with expertise in
technology, business, and psychometrics. Today, I announced
the advisory board for Data Points, and I am grateful to be
able to continue on this journey with their wisdom and
advice.andnbsp;
April 13, 2015
Trading on Anticipated Future Wealth: Homes and Cities
A recent article in The Boston Globe highlights the
issues Bostonians are considering
related to purchasing homes in affluent areas. The piece
recites a financial-planning principle: "A
bit of perspective: In many parts of the country, the rule of
thumb is that housing costs should occupy a third of
one's income. Here, that standard frequently
doesn't apply." andnbsp;Because of
rising real estate prices and a desire to keep up with the
Joneses, many Boston families are spending upwards of 40% to
50% of their income on housing, which strains the rest of the
family budget and can lead to stress as those families struggle
to pay for the rest of life's needs and the
additional expenses that come with an expensive neighborhood.
This article reminded me of a passage in The Millionaire Next
Door :
currently playing out in the Boston suburbs, the concept of
spending today in anticipation of future wealth continues to
plague those who are unable or unwilling to understand the
long-term financial impact of large-scale purchases.andnbsp;
But fortunately consumers have good data to help them make
these tough financial and life decisions, including deciding
where to live based on where
homes are the most affordable. Dr. Tom Stanley
highlighted the potential impact of this analysis in a blog
discussing the cost of living and making
tough decisions about where to work and raise a family.
In this case study, the subject, Ken, traded Manhattan and
its extraordinarily high cost of living for a city in the
South where it was much more likely that he and his family
could become financially independent. It was a tough choice
that was viewed with skepticism by some of his peers, but
ultimately it paid off over 15-20 years of reduced livings
costs. andnbsp;In the current environment of rising real estate prices and
stagnant wages, the idea of living below your means--not
above them--especially when it comes to housing, is as
important as ever.
Sarah Stanley Fallaw, Ph.D.
This post originally appeared on the
Data Points blog.
issues Bostonians are considering
related to purchasing homes in affluent areas. The piece
recites a financial-planning principle: "A
bit of perspective: In many parts of the country, the rule of
thumb is that housing costs should occupy a third of
one's income. Here, that standard frequently
doesn't apply." andnbsp;Because of
rising real estate prices and a desire to keep up with the
Joneses, many Boston families are spending upwards of 40% to
50% of their income on housing, which strains the rest of the
family budget and can lead to stress as those families struggle
to pay for the rest of life's needs and the
additional expenses that come with an expensive neighborhood.
This article reminded me of a passage in The Millionaire Next
Door :
- The Millionaire Next Door, p. 68.
currently playing out in the Boston suburbs, the concept of
spending today in anticipation of future wealth continues to
plague those who are unable or unwilling to understand the
long-term financial impact of large-scale purchases.andnbsp;
But fortunately consumers have good data to help them make
these tough financial and life decisions, including deciding
where to live based on where
homes are the most affordable. Dr. Tom Stanley
highlighted the potential impact of this analysis in a blog
discussing the cost of living and making
tough decisions about where to work and raise a family.
In this case study, the subject, Ken, traded Manhattan and
its extraordinarily high cost of living for a city in the
South where it was much more likely that he and his family
could become financially independent. It was a tough choice
that was viewed with skepticism by some of his peers, but
ultimately it paid off over 15-20 years of reduced livings
costs. andnbsp;In the current environment of rising real estate prices and
stagnant wages, the idea of living below your means--not
above them--especially when it comes to housing, is as
important as ever.
Sarah Stanley Fallaw, Ph.D.
This post originally appeared on the
Data Points blog.
April 4, 2015
How come I am not wealthy?
In the introduction to
The Millionaire Next Door, a question is asked in the
voice of the reader:
How come I am not wealthy?
The authors state:
Many people ask this question of themselves all the time.
Often they are hard-working, well-educated, high-income
people. Why, then, are so few affluent?
As I am rereading The Millionaire Next Door, as many
of you are, Iandacirc;andeuro;andtrade;m reminded of the reason the
work of defining wealth in America, of analyzing behaviors
that lead to financial independence, was and is so important:
many continue to ask this question and
havenandacirc;andeuro;andtrade;t yet found their answer.
Thankfully, one path to wealth accumulation, the one taken by
the millionaire-next-door types, has been documented quite
clearly:
They did it slowly, steadily, without signing a
multimillion-dollar contract with the Yankees, without
winning the lottery, without becoming the next Mick
Jagger.
A similar process applies to many of life's challenges:
learning a new skill, getting or staying in shape, raising
children, starting a new business:
achieving a tough goal, including becoming financially
independent, is a journey that takes
disciplined action over time.
By Sarah S. Fallaw, Ph.D.
This entry was originally posted on the Data Points
blog.
The Millionaire Next Door, a question is asked in the
voice of the reader:
How come I am not wealthy?
The authors state:
Many people ask this question of themselves all the time.
Often they are hard-working, well-educated, high-income
people. Why, then, are so few affluent?
As I am rereading The Millionaire Next Door, as many
of you are, Iandacirc;andeuro;andtrade;m reminded of the reason the
work of defining wealth in America, of analyzing behaviors
that lead to financial independence, was and is so important:
many continue to ask this question and
havenandacirc;andeuro;andtrade;t yet found their answer.
Thankfully, one path to wealth accumulation, the one taken by
the millionaire-next-door types, has been documented quite
clearly:
They did it slowly, steadily, without signing a
multimillion-dollar contract with the Yankees, without
winning the lottery, without becoming the next Mick
Jagger.
A similar process applies to many of life's challenges:
learning a new skill, getting or staying in shape, raising
children, starting a new business:
achieving a tough goal, including becoming financially
independent, is a journey that takes
disciplined action over time.
By Sarah S. Fallaw, Ph.D.
This entry was originally posted on the Data Points
blog.
March 28, 2015
Thomas J. Stanley, Father and Mentor
Dear Readers,
Thomas J. Stanley, my father and mentor, passed away after a tragic car accident on February 28th, 2015. At the time of his death, we were working together on multiple projects, including two new books, Data Points, and a line of research examining life experiences and wealth accumulation.
Our family takes great comfort from the kind messages and comments that reveal the positive and lasting influence my father's work had on people's lives. In the wake of his passing, several journalists have provided unique and thoughtful commentary on how he redefined what it means to be wealthy.
Two things are clear from the coverage of his life and work: 1) many individuals have benefited from his research, and 2) some individuals continue to deny the inherent ability for individuals to build wealth on their own through hard work and diligence.
Therefore, his work must and will continue: providing real data versus conventional wisdom about the wealthy, demonstrating the power of behavior and life experiences in the creation and prediction of wealth, and illustrating how one can become financially independent without wealthy benefactors or a hefty monthly paycheck.
My father enjoyed sharing the stories, habits, and life experiences of American millionaires. We will continue to tell these stories, analyze empirical and archival data, and carry on the research my father conducted over his lifetime. Thank you for your continued interest...there is more to come.
Sincerely,
Sarah Stanley Fallaw, Ph.D.
March 7, 2015
Thomas J. Stanley, Ph.D. 1944-2015
Thomas J. Stanley's Blog
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