Book of the Week 1: The Millionaire Next Door

About once a week, I’ll be trying to review a book (book of the week, or BOTW) that I have just finished, ideally within the past month. With this, I’ll ideally be reading regularly, I’ll actually remember and refer to what I’ve read through these reviews, and you yourself get to join me on this fantastic path to reaching our ideal selves!

I’m truly excited to get this series started, as I’ve got plenty of books that I’ve been wanting to tackle during college but didn’t have the time to. Most of them will be non-fiction, ranging from technical books on design and development to self-help books to biographies of the greatest minds. Maybe a few times a year I’ll tackle some fiction books, maybe some classics. Feel free to leave comments and discuss, or even to recommend a book, or to just enjoy the ride!


Rating: 4/5
Verdict: Yes!

The Millionaire Next Door by Doctors Thomas J Stanley and William D Danko is a quick read that exposes the tendencies of millionaires in today’s everyday world. These millionaires are not celebrities that come to mind; they’re average, everyday people, possibly living in your neighborhood, who simply do a few things different from everyone else. They’re surprisingly reachable goals, which makes this book extremely relatable; you’ll likely start implementing something right after reading a few pages, even if you’ve never cared about money or numbers.

As a quick summation from each chapter (names in bold), the gist of what these millionaires do differently are here:

  1. Frugal Frugal Frugal: “Whatever your income, always live below your means.” This is you could be living right next door to a millionaire and not know it! Even with a million dollars, they’re still saving coupons, they still budget every day, etc.
  2. Time, Energy, and Money: The authors define two terms: PAWs (Prodigious Accumulators of Wealth) and UAWs (Under Accumulators of Wealth). They state “PAWs allocate nearly twice the number of hours per month to planning their financial investments as UAWs do.” It’s all about planning.
  3. You Aren’t What You Drive: “They believe that financial independence is more important than displaying high social status.” With this chapter title, Stanley and Danko do not expect millionaires to be driving Ferraris, and they do not even expect unwealthy people to be driving old, used cars. The millionaires could be living in quiet, cheap neighborhoods. Practicality is all that matters.
  4. Economic Outpatient Care: Generally, the more inheritance (or money gifts, or “economic outpatient care”) one receives, the less wealthy one is due to the power of habits and lack of skills. The whole cliché “teach a man to fish” idea.
  5. Affirmative Action, Family Style: Matters of affluent parents raising adult children and what they do so that children also become affluent. Things to say, how much support, etc. Rich get richer.
  6. Find Your Niche: Choose an occupation that focuses on a specific trade, especially where millionaires are willing to pay for. Millionaires helping their adult children paying for school, finding a home, etc.
  7. Jobs: Millionaires versus Heirs: “They chose the right occupation.” They enjoy what they do. At the same time they choose “dull” jobs because they will always be needed. Overlaps a little bit with the above.

Some other random golden nuggets I figured I’d share:

  • “So it is with many Cinderellas who turn some adversity in their early lives into lifetimes of achievement.”
  • “It’s amazing what you can do when you set your mind to it. You’ll be surprised how many sales calls you can make when you have no alternative except to succeed.”
  • “Money should never change one’s values… Making money is only a report card. It’s a way to tell how you’re doing.”

This book is heavily researched, having surveyed over a thousand millionaires (even explaining in the appendix their methodology on how they found these millionaires) from across the nation. Because this book is heavily researched and backed with case studies, this book is actually a rather quick read; I finished over two hundred of these pages in just two work days. In addition, this book dates back to 1996, so much of the actual statistical information and dollar values is outdated, but the characteristics of these millionaires will never die. (Plus the book is guaranteed to be cheap! It’s also guaranteed to be found at your nearest library.) This makes the research easy to skim through, fast enough for you to get the ideas instilled in your brain. You’ll already know that their information is trustworthy, so simply go ahead and seek out these golden nuggets that can help you gain control of your finances ASAP.

This book definitely has a lot of worthwhile information. It’s not going to teach you how to play with the stock market, or how to run businesses, but it’ll teach you the characteristics that you can adopt today. It exposes your mind on how to think differently. It teaches you that being wealthy and earning a high income are not often related. It’ll teach you lots of theory, with some things you can practice today to change your mindset, but it’s not going to teach you any technical skills. Not a bad thing at all since there’s plenty of other resources for that, but just a heads up.

Go get save that money!

Advertisements

Author: Kevin Who

Developer. Designer. Smasher. Reader. Creator.

Say something!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s