Millionaire Next Door: Tl;dr

"The Millionaire Next Door" one of the classic personal finance books, written by Thomas J. Stanley and William D. Danko, first published in 1996. The book is based on a study of millionaires in the United States and provides insights into the habits and characteristics of these individuals. The authors' main argument is that the vast majority of millionaires in the United States are "ordinary people" who have amassed wealth through hard work, frugality, and smart investing.

One of the key ideas in the book is that most millionaires in the United States are "self-made" and have not inherited their wealth. The authors found that only 30% of millionaires in their study had inherited more than $1 million. The majority of millionaires (70%) had built their wealth through their own efforts and had a median net worth of $3.5 million. This is in contrast to the popular belief that most millionaires are trust-fund babies or have inherited their wealth.

Another key idea in the book is that most millionaires are frugal and live well below their means. The authors found that the average millionaire in their study had a net worth that was 20 times their annual spending. This means that if the average millionaire spent $100,000 per year, they would have a net worth of $2 million. This is in contrast to non-millionaires who tend to spend more than they earn and have a net worth that is less than their annual spending.

The authors also found that most millionaires are not showy or ostentatious with their wealth. They found that the average millionaire in their study drove a car that was three years old, lived in a home that was worth less than $300,000, and wore inexpensive suits. This is in contrast to the popular image of millionaires driving expensive cars, living in mansions, and wearing designer clothes.

One of the most interesting findings in the book is that most millionaires are entrepreneurs or business owners. The authors found that 60% of the millionaires in their study were business owners or entrepreneurs. This is in contrast to the popular belief that most millionaires are professionals such as doctors, lawyers, or bankers.

The authors also found that most millionaires are well-educated and have a strong work ethic. The majority of the millionaires in their study had at least a college degree and had worked for at least 20 years before becoming millionaires. They also found that most millionaires had a strong sense of discipline and were willing to make sacrifices to achieve their financial goals.

The book concludes that the key to becoming a millionaire is to live below your means, save and invest for the long-term, and work hard to build a successful business or career. The authors also argue that it is important to have a clear financial plan and to be disciplined in sticking to it.

In conclusion, "The Millionaire Next Door" provides valuable insights into the habits and characteristics of millionaires in the United States. The book debunks many of the myths about millionaires and provides a clear and practical guide for anyone looking to build wealth. By showing that most millionaires are self-made, frugal, and hard-working, the book provides a blueprint for anyone looking to build wealth and achieve financial success.