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.
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.
Published in: Personal Finance