Updated: Jan 4
The Surprising Secrets of America's Wealthy- Pages 260
About the Author
Thomas J. Stanley received a doctorate from the University of Georgia. He taught marketing and was on the faculty of the University at Albany, State University of New York. He was an author and co-author of many books including award-winning and New York Times Bestseller 'Millionaire Next Door’. His studies were more focused on America’s wealthy people which is exciting to read and brings light to our conservative thinking on millionaires.
William D. Danko is co-author of Millionaire Next Door. Thomas was like a mentor to William. Danko has also co-authored a new book with Richard Van Ness. Richer Than A Millionaire ~ A Pathway to True Prosperity. It is written for the 2020's environment.
About the book
The book was written in 1996, so the numbers provided in this book are at least 25 years old_ still, they hold true to this day. The authors did a great job analyzing America’s millionaires who had a of net worth of more than USD 1M. Only 3.5 percent of people were millionaires out of which 95 percent were having a net worth between USD 1M to USD 10M. These millionaires live among us and this book tells you real facts like what do they do? Where do they shop? What do they drive? How do they invest? Where did their ancestors come from? How did they get rich? And can I ever become one of them?
1: Meet the Millionaire Next Door
2: Frugal Frugal Frugal
3: Time, Energy, and Money
4: You Aren't What You Drive
5: Economic Outpatient Care
6: Affirmative Action, Family Style
7: Find Your Niche
8: Jobs: Millionaires versus Heirs Acknowledgments
'These people cannot be millionaires! They don't look like
millionaires, they don't dress like millionaires, they don't eat
like millionaires, they don't act like millionaires-they don't
even have millionaire names. Where are the millionaires who
look like millionaires?'
The authors have divided everyone into two categories Under Accumulators of Wealth (UAWs) and Prodigious Accumulators of Wealth (PAWs).
UAWs have a high income. They do high-paying jobs like doctors, attorneys, engineers, investment consultants, etc., and have pressure to show their societal status. In spite of having white collar high pay jobs, they have low net worth because societal pressure causes them to lose money. UAWs live above means_ expensive lifestyle.
PAWs do blue-collar jobs and thus have low income still they are millionaires having high net worth. They live well below their means_ modest lifestyle and drive normal sedans.
Why is there this difference? Why UAWs in spite of having high paying white-collar jobs end with low net worth?
Authors studied millionaires having net worth between USD 1M and USD 10M. And only 3.5% of America stands in that category. The difference is mainly because of poor management of money. Millionaires take only 7 percent of their total wealth as a salary. They understand their spending.
‘A person should know where’s every penny coming from and where’s it going.’
Millionaires save as much as possible and invest at least 15 percent of their salary. They determine their financial potential and avoid financial independence on others. You’ll be surprised to know that 25 percent out of these millionaires did not buy cars in 4 years, 25 percent bought brand new cars, and the remaining bought second-hand cars.
Eighty percent of America’s millionaires are first-generation rich, they did not acquire wealth from their parents. They own a small factory, a chain of stores, or a service company. They did not receive economic outpatient care from their parents and their children are economically self-sufficient.
Children of some millionaires who receive economic outpatient care become high volume consumers. They try to show off their status by buying unnecessary luxury items. They don’t save, invest, and manage money.
Authors gave some rules so that your children become good sons and daughters;
1. Focus on teaching discipline
2. Don’t let them know your wealth. Tell them after they find their goal/profession they love and start working on it
3. Don’t discuss inheritance with them and don’t involve them in family matters
4. Don’t negotiate with them using money
5. Each of your children is dependent and have an individual identity, so don’t compare with others
6. Always acknowledge their achievement but don’t celebrate or acknowledge simple & small achievements
7. Understand and teach them that there's more to life than money.
This study clearly shows that you don’t need to have high paying jobs to accumulate wealth. It is your self-awareness, management skills, and lifestyle that can help you to accomplish such a big thing in one lifetime.
Millionaires save, invest, and live below their means not because they’re millionaires, they do it that’s why they’re millionaires.
Your goal should be to become rich, not to see rich.