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"The Millionaire Next Door"

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"The Millionaire Next Door" offers an insight on how the true millionaires live their lives. This explains how many of these self-made millionaires achieved their wealth. This book was written after twenty years of research conducted by the authors. This book will have you question the importance of things versus wealth. It is a must read for everyone.

Pros

  • Will change the way you judge wealth
  • Fun and easy to read
  • Explains difficult concepts simply

Cons

  • Looks mainly at habits of others
  • Does not offer specific investing advice

Thomas J Stanley and William D Danko have spent over twenty years studying the habits of the wealthy. They soon learned that the wealthy have seven factors in common. You may be surprised to discover that the millionaires generally do not live in the most expensive neighborhoods, drive the latest cars or spend extravagantly on clothing. They discovered that those who appear affluent generally are not building wealth, but spending money.

“The Millionaire Next Door” will change the way that you look at money. It is important to realize that by accumulating money, you are building wealth. If you spend as much or more than you make you are not accumulating wealth. If you want to be a millionaire one day then you need to spend less than you make. Most of the millionaires that the authors talk about live comfortably, but not extravagantly. They are frugal in their spending habits. They realize that the car you drive does not measure wealth nor by the house you own. The book also talks a lot about the difference between appearing wealthy and actually being wealthy. Understanding this can really motivate you to adjust your lifestyle so that you can maximize your ability to build wealth.

If you are just starting out financially, this book can help you start down the right path. It will revolutionize several of the conventional views on money. While this book does not offer specific investment or budgeting advice, it does talk about the way that you view and use money. It can help you embrace a frugal lifestyle and understand the true meaning of wealth and the process involved in achieving true wealth. It goes over some of the costly money mistakes that people make that keep them from becoming a millionaire. This book will have you examine your motivation and true goals.

As you read this book, look for the habits that they warn against, and see if you are starting to develop them. You should also take into consideration the other habits, and see what you can do to make changes in your family dynamic so that you can effectively build wealth and pass on a legacy to future generations. It does take planning and work, but you can make the changes happen.

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