The Millionaire Next Door: The Surprising Secrets of America's Wealthy Paperback – November 16, 2010

Excellent book if your into personal finance and looking to build wealth. Has alot of insight into who may or may not be presumed millionaires or wealthy individuals, based alot on the habits of how they handle there finances.

Great book highlighting the “Americanized” values which exist in the US. The extensive 30 years of research that was done is very eye opening and informative about how to ensure future wealth - be frugal and minimize materialism. The case studies in the book help evaluate your own life, as it’s okay to have nice things and spend more here and there, but makes you consider what percentage of your net worth those things cost you and assess if you are at a level of hyper-consumption. The book has a simple equation for where you should be based on age and income. A household making $80k income annually and living frugally can have a significantly higher net worth (millions) compared to an equivalent household (size & age) where the net income is $150k for example, due to values and proper budget planning. A greater income will have a perceived requirement of societal pressures, so income may be higher, but so will the spending toward materials to reflect a certain lifestyle. A lot of the book’s numbers are in 1990’s dollars, which need to be adjusted to today’s dollars, but the demographics & percentages still hold true and message is clear - the millionaires of our society do not value the material items as much as those who believe you need to highlight such materials (house, car, clothing, private education, etc.) and may not look it all the while it’s become a case of keeping up with the Joneses for non-millionaires. The true millionaires do not get caught up in the lifestyle of appearances. Wealth can be generated within one generation, as is emphasized by the significant percentage of 1st generation wealth, and over time, even first generation citizens become “Americanized”, as highlighted by the longer one spends in the US, their ranking in the millionaire demographic lowers.The moral is if you look wealthy, you may be generating a lot of income, but it may be going toward materials instead of investments contributing toward your net worth. Those who live frugally may catch or significantly surpass equivalent households (similarly sized and aged family) who make significantly more income.This book helped me set financial goals and immediately after reading it, I was able to assess what I really need in my life and cut my next month’s credit card bill in half! A value I’ve never been able to get so low in years. I’ve always been able to afford what I buy, but when it’s going toward materialistic items and not going toward net worth, immediate change was needed. Based on the book’s equation, it turns out I wasn’t going to be a millionaire at my rate and I needed to change something quickly to get on the right track. Highly recommended for anyone.

This is the second time I read this book. It does provide a lot of tips and financial advice. The reason I give it a four star review instead of a five is because the book provides a lot of statistics and trends from the 90's. I think otherwise is still a very good book to read.

If you are not an avid reader this is a very difficult book to keep picking up, however, it was probably one of the most effective financial books I have read in my young adult life. It calls me out on my spending habits, how I treat/view money, and even how I raise my family to treat/view money. I believe every young adult needs to white knuckle themselves through this book to understand *how* to discipline yourself and your spending habits. Fantastically deserving of 5 stars.

This is an excellent, data-backed look at what the wealthy look like in the United States. Contrary to popular belief, most wealthy people do not drive Teslas and eat caviar. They are not tech CEOs or Wall Street financiers. They are small business owners and self-employed professionals who probably drive a 3-year old BMW or a Ford pickup truck or SUV. They probably wear a Seiko watch, not a Rolex. They probably wear a suit bought from Men's Wearhouse, not Brooks Brothers. They probably have a run-of-the-mill Visa credit card, not something from Sak's Fifth Ave.Some of the many useful insights and takeaways from this book:A Useful Definition of Wealth -- Wealth is much more than how much money you pull in every year and how much your house costs. It's more a reflection of your investments and how much money you save. Not how much you spend. There are a lot of people who pull in a ton of money every year but live paycheck-to-paycheck.Wealth and income are not the same thing -- Not all wealthy people pull in a hefty income. In fact, many purposely pull in relatively low incomes in order to reduce their tax obligations. Ross Perot is a great example of this (when the book is written). Perot pays millions in taxes, but is worth billions. Even your neighbor next door might be a millionaire, but maybe the household only brings in $79,000 a year.Most Millionaires Are Self-Made -- While children of millionaires are more likely to become millionaires, very few millionaires (less than 20%) are not self-made millionaires. In fact, regular handouts from parents make it less likely that an individual will become a millionaire someday. Most millionaires worked for their money and were not constantly given Economic Outpatient Care (EOC) from their parents.Frugality Reigns Supreme -- The authors give a great analogy about building wealth. You can play a great offensive (i.e. pulling in money) and you can make a great defensive (i.e. saving your money and preserving your wealth). Playing a great offensive is wonderful, but it is really only useful for building wealth if you don't play a great defensive too (some people are capable of playing such a great offensive that the defensive really isn't important, but this is very few people). They buy discount suits, discounted new cars or used cars, they rely on very, very little credit, and status symbols aren't all that important to them.Mindset Matters -- Most millionaires are not worry-warts. The only things they really worry about are government policies that will destroy their livelihoods, but even then, they know that they can't really control the outcome of these issues directly, so they only give so much effort and so much weight to these decisions.My only quasi-criticism of this book is that the data are from 1992-1996 and the book was written in 1996. This obviously isn't the fault of the authors, and some of the conclusions are reinforced in a 2010 preface, but just take some of the data with a grain of salt. Take inflation and general industrial changes into account.Well worth the read, especially if you are looking to join the ranks of the Prodigious Accumulators of Wealth or work with them.