Book Reviews

The Millionaire Next Door by Thomas J. Stanley and William D. Danko

There goes another millionaire, that guy in his $2000 suit, driving his BMW to his home in the fanciest part of town. Right? Not likely. According to the authors of this fascinating book the millionaire is probably the guy behind him in his three-year-old Chevy, wearing casual clothing and living in a middle class neighborhood. Why is that true? Because the typical millionaire has learned to live well below his income and is not anxious to impress people with his money, which he has earned through hard work and risk. The first guy is probably a millionaire want-a-be who is in debt up to his $50 tie, leasing a car that he really can’t afford, living in a house that is beyond his means, and generally caught up in a lifestyle that will ensure that he never makes it to millionaire row.

These are the kinds of things we may have always suspected; now Stanley and Danko provide the research to prove it. The study upon which the book is based took place from May 1995 to January 1996. Seven common denominators were identified among those who successfully build wealth, the most important of which, perhaps, is that they live well below their means, that is, they are frugal.

This is a highly interesting book, even for those who have little interest in accumulating great wealth. In some ways the most valuable section might be how to raise children that are not dependent upon mom and dad for their livelihood.