A Management in a Minute Book Overview of The Millionaire Next Door by Thomas J. Stanley and William D. Danko

This summary and review of the book, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy, was prepared by KaNotaye Rodgers while a Business Management student in the College of Business at Southeastern Louisiana University in Hammond, Louisiana.

Cover via Amazon

Executive Summary

Thomas J. Stanley is an author, lecturer, and researcher who have studied the affluent since 1973.  He has several award winning books on America’s wealthy population.  William D. Danko has studied consumer behavior and in particular the topic of wealth formation.  In The Millionaire Next Door, the authors shocked America with the stunning results of a survey which consisted of some of America’s richest people.

According to Stanley and Danko, most people have it all wrong about how to become wealthy.  Usually, becoming wealthy consists of hard work, planning, budgeting, and being frugal.  Most millionaires are first generation-rich.  They are hard workers who usually own their own businesses.  They usually follow a lifestyle which leads to accumulating money.  You probably will not find these people in Beverly Hills, shopping on Rodeo Drive, or even driving the most luxurious foreign car in the parking lot.  However, the surveys show that most of the affluent in America shop at JC Penny and drive American made automobiles for long periods of time.

The authors list seven factors which are common denominators among those who successfully build wealth.  These include:  they live below their means, they allocate time, energy, and money efficiently, in ways conducive to building wealth, they believe that financial independence is more important than displaying high social status, their parents did not provide economic outpatient care, their adult children are economically self-sufficient, they are proficient in targeting market opportunities, and they chose the right occupation.

The authors explained the difference in PAWs (prodigious accumulators of wealth) and UAWs (under accumulators of wealth).  Most UAWs spend time worrying about who else is wealthy and what else they can buy, while most PAWs spend time planning and budgeting.

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Published in: Personal Finance


RSSComments: 5  |  Post a Comment
  1. I sure hope to be a UAW one day…a under accumulator of wealth. I enjoy budgeting and planning all the time, i will even coupon if i have to to save as much money as possible. With 5 children and a full time student I really don’t have any other choice but to budget and plan. I’m not worried about outspending others and having something nicer than someone else….that type of competition makes me ill..

  2. I think these are good lessons for all of us to think about. We need to realize that we need to save up our money; just because we have money doesn’t mean that we have to spend it all. We need to spend it wisely and not spend a lot on things that are useless. We need to really think about saving for retirement.

  3. great job. This is great. I would never have realized that most millionaires live ordinary lifestyles if it weren’t for this presentation. This book sound very interesting. I didn’t realize there was a difference in the kinds of wealth. UAWs, PAWs, who knew. great job.

  4. My favorite top ten was number 8 that says to live below your means. I feel and agree with this statement so much. I think you should plan for a rainy day and to do things and buy things you know you can afford. I think KaNotaye chose great rules for the top ten. This book seems like a very good and insightful book to read.

  5. I love this article. I enjoy how the author says that alot of millionaires do not neccessarly flaunt their money and tend to shop at JCPenny and drive American made automobiles for a long time. I have some family members like this and it is very true. I will be very interested in reading this book over the summer and find it facinating to know how the wealthy (minus celebrities) truely live their lives and how they “made it”.

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