The Millionaire Next Door (Millionaire Set Book 2)

by Thomas J. Stanley

There is great pride, joy and satisfaction to be derived from building one’s own fortune. Countless millionaires have told me that the journey to wealth is much more satisfying than the destination. When they look back over their history of building wealth, they recall constantly setting economic goals and the great happiness gained from achieving them.

In the course of our investigations, we discovered seven common denominators among those who successfully build wealth. They live well below their means. They allocate their time, energy, and money efficiently, in ways conducive to building wealth. They believe that financial independence is more important than displaying high social status. Their parents did not provide economic outpatient care. Their adult children are economically self-sufficient. They are proficient in targeting market opportunities. They chose the right occupation.

If you’re not yet wealthy but want to be someday, never purchase a home that requires a mortgage that is more than twice your household’s total annual realized income.

This relationship may surprise some people. For all high-income earners (those earning at least $100,000 annually), the relationship between education and wealth accumulation is negative. High-income PAWs are significantly less likely than UAWs to hold graduate degrees, law degrees, or medical degrees. Millionaires typically indicate on our survey “business owner” with “some college,” “four-year college graduate,” or “no college.”

Doctors and other well-educated professionals get a very late start in the earnings race. It is difficult to accumulate wealth when one is in school. The longer one stays in school, the longer one postpones producing an income and building wealth.

First, the CPAs were recommended by professors of accounting. Second, the CPAs were initially hired out of college by major accounting firms and later started their own successful accounting firms. We find that many of the very best CPAs and financial planners follow this career path.

Dad used to say seeds are a lot like dollars. You can eat the seeds or sow them.

Thus, a gift of a down payment, whether full or partial, can place a recipient on a treadmill of consumption and continued dependence on the gift giver.

What can you give your children to enhance the probability that they will become economically productive adults? In addition to an education, create an environment that honors independent thoughts and deeds, cherishes individual achievements, and rewards responsibility and leadership. Yes, the best things in life are often free. Teach your own to live on their own. It’s much less costly financially, and, in the long run, it is in the best interests of both the children and their parents.

The role of enlightened parents is to strengthen the weak.

Most of the millionaire business owners we have interviewed would not encourage their children to take over such a business.