The Millionaire Next Door is written after many years of research done by the authors (Thomas Stanley and William Danko).
This book reveals that most of the millionaires became rich not by chasing get-rich-quick schemes instead they have followed a particular path to reach their destination of becoming millionaires.
What will You Learn From This Book?
This book shows you that to become a millionaire one must go through a slow process of choosing a right occupation, becoming successful in the career or in business, saving money by budgeting and investing carefully.
Most books focus only on one side to become rich that is spending less or earning more but according to this book both are required to succeed.
Many people ask these questions why they are not wealthy, they work hard, they are well educated and high income people. This book will tell you that in order to accumulate wealth and becoming millionaire you should not only earn a lot but you should also develop frugal habits.
So the question is “Who becomes Millionaire?”
- 80% of the millionaires are first-generation rich. This is quite strange for the people who think to become rich one must born in a rich family.
- 97% of millionaires are retired.
- They have occupied the same home for more than twenty years.
- 70% of millionaires own a business and most of them work between 45 and 55 hours per week.
- 80% of millionaires are college graduates. They believe education is extremely important for themselves and their children.
- They invest 20% of their income each year.
- About 95 % millionaires invest in stocks and mutual funds for the long term. They seldom sell their equity investments.
In the research the authors found that people who become millionaires have these 7 common denominators.
1. They Live below their means. Millionaire are frugal. They try to save every penny they can.
2. They allocate their time, money and energy efficiently, in ways to build wealth. They invest their time to create budgets, they know exactly how much money their family is spending for household, car and other expenses each month and each year. They spend less time on shopping and invest more time on making family budget.
3. They believe that financial independence is more important than displaying high social status. They don’t buy expensive cars, clothes or watches. They buy a good fuel efficient car and keep that car for many years.
4. Their parents did not provide economic outpatient care. They did not receive any money from their parents, they have accumulated their wealth themselves.
5. Their adult children are economically self-sufficient. They send their children in good schools and universities so that they can become professionals and self-dependant.
6. They are proficient in targeting market opportunities. Most of the millionaires own business. They find new products or improve the existing products and then they sell these products in the market to accumulate wealth.
7. They choose the right occupation. Most of the millionaires are self-employed professional people like doctors, lawyers, dentists.
Final Thoughts On This Book
This is a classic financial book to understand exactly how other people have become millionaires. The good news is that if you do the same things you can get the same results. This book contains everything you want to know about the life styles of the rich people.
Mostly the people who looks rich, who wear expensive suits and drive expensive cars are not rich. They are actually deeply in debt. The true millionaires don’t look like millionaires. They don’t dress like millionaires, they don’t eat like millionaires.
To know more about millionaires and become one of them, I recommend you to buy this amazing book.