Review of "The Millionaire Next Door" by Thomas J. Stanley and William D. Danko

The message that Stanley and Danko is trying to tell us is that average people can become rich and reach the $1-15 million dollar net worth in this lifetime. Most of these millionaires are not big spenders, flashy or drive brand new Mercedes or BMWs despite what the vast majority of the public tends to believe. These millionaires are above average savers and invest their money carefully to gain an above average return.

The best way to achieve the status of our neighbor millionaire is to save money, invest well, and live below your means. Also, starting your own small business wouldnt hurt either since most millionaires have their own small businesses or are a high earner with a annual salary of above $100,000 a year. High Earners could be doctors, lawyers, top salespeople, etc.

The book The Millionaire Next Door is an interesting read and clears up some misconceptions we all have about millionaires. We tend to think that being a millionaire means having jets, yachts, mansions and being in the media but those are reserved for multi-millionaires with a net worth of $100 million and above.

If a millionaire with a net worth of $5-10 million spends all their money on mansions, luxury cars, and yachts etc. then their money would be all gone after taxes. You cant be extravagant if you dont have several hundred million.

The reason these average millionaires work hard is because they want the financial security having that money brings and the peace of mind of not worrying about bills stacking up. Some of the other reasons are travel, good college education for their kids, being able to take care of their family and donate to charities.

If you dont have a lot of money then dont try to spend above your means by charging your credit cards up, leasing an expensive car, or living in a house bigger than what you can afford because eventually its going to catch up to you. You cant keep financing everything for long because there isnt enough income or cash flow to support that lifestyle.