Twenty years ago this October, The Millionaire Next Door, authored by Thomas Stanley and William Danko, made its debut. As a book, it qualifies as a timeless classic on personal finance. It was published at a time prior to the Dot-Com boom, the Dot-Com bust, 9/11 and the Great Recession. Yet, its insights on accumulating wealth remain relevant today.
No it’s not a book on managing one’s personal finances per se, but an analysis of ‘ordinary’ millionaires and how they got there. The main message: most millionaires don’t look the part or live a flashy lifestyle. They live well below their means and have invested the difference. Many accumulate their wealth as business owners. They tend to drive older cars and live in modest homes.
Meanwhile, the folks who give all the appearances of wealth may actually be living paycheck to paycheck — or worse – despite high incomes. In Texas they have a saying for this, “Big hat, no cattle.” Living in an affluent neighborhood can intensify pressures to spend more, much more: on luxury autos, private schools, lavish vacations and club memberships.
Emulate the Millionaire next door. Live modestly, well below your means. Direct your time, money and energy in purposeful, productive directions.
PS On a sad note, Thomas Stanley died in an auto accident in 2015.
PPS Also sad to say, a million bucks ain’t what it used to be. A million dollars today is only worth $651,000 in 1996 dollars. Conversely, it takes $1.54 million today to equal a million 1996 dollars. Click here for an inflation calculator.
PPPS If you are interested in reading the book you can save yourself a few dollars by checking it out of the local library. There is a 2010 edition which includes an updated preface. (But I have provided a link for Kindle or Audible downloads.)
© 2016 Paul J Reimold