[Ebook] ➨ The Millionaire Next Door: The Surprising Secrets of America's Wealthy Author Thomas J. Stanley – Burberry-outlets-online.co.uk

The Millionaire Next Door: The Surprising Secrets of America's Wealthy The Incredible National Bestseller That Is Changing People S Lives And Increasing Their Net Worth CAN YOU SPOT THE MILLIONAIRE NEXT DOOR Who Are The Rich In This Country What Do They Do Where Do They Shop What Do They Drive How Do They Invest Where Did Their Ancestors Come From How Did They Get Rich Can I Ever Become One Of Them Get The Answers In The Millionaire Next Door , The Never Before Told Story About Wealth In America You Ll Be Surprised At What You Find Out Most Americans believe wealthy and high income are synonymous Surprisingly, most high income earners are not wealthy although they earn a lot of money, they don t keep much of it To be wealthy is not to amass material possessions, but to increase net worth by collecting appreciating assets The book categorizes people as PAWs or UAWs Prodigious Accumulators of Wealth PAWs achieve, create wealth, become financially independent, and build from scratch Under Accumulators of Wealth UAWs Most Americans believe wealthy and high income are synonymous Surprisingly, most high income earners are not wealthy although they earn a lot of money, they don t keep much of it To be wealthy is not to amass material possessions, but to increase net worth by collecting appreciating assets The book categorizes people as PAWs or UAWs Prodigious Accumulators of Wealth PAWs achieve, create wealth, become financially independent, and build from scratch Under Accumulators of Wealth UAWs simply display a high status lifestyle Most wealthy people PAWs don t drive new cars, buy expensive clothes, or live in upscale neighborhoods.I read this book because it was recommended by one of my favorite financial authors, Robert Kiyosaki, author of the Rich Dad Poor Dad series This book explains 7 factors that contribute to wealth building These factors aren t set forth in a step by step how to become wealthy checklist, but areindirectly investigated through statistics and interviews explaining the behavior of the wealthy.The briefest formula for wealth given be frugal, invest, and own a profitable business I found it interesting that as of 1996 self employed people entrepreneurs and self employed professionals are less than 20% of the American workforce, but 33% of millionaires Also, 80% of American millionaires are 1st generation rich, people who earned their wealth rather than inheriting it.I liked the comparison between budgeting and dieting or exercising When you see a fit person eating healthy or working out, you re tempted to think Why do they need to diet and exercise They re in great shape Of course, the reason they re in shape is because of their diet and exercise regimen The same goes for the wealthy You might think that they don t need to budget because they re wealthy, but it s often due to their budgeting that they became wealthy.To determine your expected net worth, multiply your age by your gross pretax annual income, then divide by 10.The 7 factors of wealthThey live well below their means.Control spending by creating an artificial economic environment of scarcity Pay yourself first by investing at least 15% of income before spending on anything else.Minimize realized taxable income, maximize unrealized non taxable income.Sacrifice high consumption today for financial independence tomorrow.Get a mortgage less than twice your annual income.They allocate their time, energy, and money efficiently, in ways conducive to building wealth.Save and invest early An early start with low income can outweigh a late start with high income.Invest at least 15% of gross pretax income.Follow a budgeting and plan your finances.Invest passively with a buy and hold method to reduce capital gains and turnover.They believe that financial independence isimportant than displaying high social status.Dollars are like seeds you can consume them or plant them to grow.Their parents did not provide economic outpatient care.Thedollars adult children receive, the fewer dollars they accumulate Those forced to provide for themselves tend to be wealthier than those who are given financial aid.Their adult children are economically self sufficient.Helping the financially weak generally makes them weaker.They are proficient in targeting market opportunities.Offer goods and services to the affluent Although they re often frugal concerning consumer goods and services, they re not as price sensitive about investment services, accounting services, tax advice, legal services, medical care, educational products, homes, and products and services for their businesses.They chose the right occupation.Sell your intellect it s portable across industries and geographic locations The point of this book comes through loud and clear, the people that we think are millionaires arethan likely swimming in debt Just because you live in a fancy neighborhood and drive an expensive car does not make you rich In fact it goes as far as to say that most millionaires live in less costly areas because it costs alot of money to keep up with the JONES In fact their study showed 37 percent of their millionaires bought used cars opposed to new and paid cash of course Now their us The point of this book comes through loud and clear, the people that we think are millionaires arethan likely swimming in debt Just because you live in a fancy neighborhood and drive an expensive car does not make you rich In fact it goes as far as to say that most millionaires live in less costly areas because it costs alot of money to keep up with the JONES In fact their study showed 37 percent of their millionaires bought used cars opposed to new and paid cash of course Now their used cars may be Mercedes but they save on the depreciation of the person that bought it new They reference one guy nameed W W Allen who is a self made MUTImillionaire He and his wife have lived in the same three bedroom house in the same middle class neighborhood for nearly forty years Living in less costly areas can enable you to spend less and to investof your income You will pay less for your home and correspondingly less for your property taxes Your neighbors will be less likely to drive expensive motor vehicles You will find it easier to keep up, even ahed of the Joneses and still accumulate wealth Ok, makes total sense but not something that is usually pointed out by the financial world People tend to spendthan they make making it nearly impossible to accumulate wealth I love the message of this book and their is extensive research used to back it up It s rare that you can find a book that is as boring as it is sanctimonious But they pulled it off In a nutshell, millionaires aren t made by extraordinarily high incomes those people s spending tends to increase as well , in fact they re typically people with merely very good incomes who are zealous about frugality and long term investments Not a huge surprise actually, but its nice to have numbers to back up the story and they do Many are small business owners, many don t spend much on car It s rare that you can find a book that is as boring as it is sanctimonious But they pulled it off In a nutshell, millionaires aren t made by extraordinarily high incomes those people s spending tends to increase as well , in fact they re typically people with merely very good incomes who are zealous about frugality and long term investments Not a huge surprise actually, but its nice to have numbers to back up the story and they do Many are small business owners, many don t spend much on cars or suits and 80% are first generation millionaires not those who happened into big inheritances.And that s it.The rest of the book is filled with awkward, pedantic number twisting to prove that people who spend less on houses and cars will haveleft for retirement What s maddening is the constant tone that people who choose to spend now instead of when they re 65 are hyperconsumers Can you believe this doctor, he makes 700,000 per year and spent a whopping 7000 of it on a vacation What a dope Wouldn t the 65,000 he spent on a Porsche have felt just as good in an IRA account They constantly fawn over blue collar superstars who drive around in F 150s while their wives clip coupons They start with the assumption from the very beginning that money is pre ordained to end up in a retirement account and anything you do to interfere with that is stupid and indicative of poor discipline.I can t wait for the next book about how Rock and Roll is too loud and women s skirts are too short This book was so difficult to get through.I have been trying to read one financial book a week I love Suze Orman, Dave Ramsey I enjoyed the Millionaire Mind I found it inspiring I did not enjoy the Millionaire Next Door.This book is heavily recommended on so many of the financial online forums and blogs I read, so I borrowed it from my library this week.I found the first chapter very interesting, and then they lost me I think the premise of this book could be summarized into one chapter Bu This book was so difficult to get through.I have been trying to read one financial book a week I love Suze Orman, Dave Ramsey I enjoyed the Millionaire Mind I found it inspiring I did not enjoy the Millionaire Next Door.This book is heavily recommended on so many of the financial online forums and blogs I read, so I borrowed it from my library this week.I found the first chapter very interesting, and then they lost me I think the premise of this book could be summarized into one chapter But then, you can t sell a book on one chapter I do not think the writing is good The authors are annoyingly repetitive I think they bored their editor so much that the editor didn t catch that they repeat sentences over, and over, and over The book is fluffed out with tons of boring, didactic charts The writing is not organized at times, it seems like streams of conscientiousness writing jumping around too much.I think they completely lost my interest on page 75 when they write How else does one explain why two experts on wealth are not wealthy in part, because they spent a combined total of nearly 20 years pursuing higher education So on page 106 they tell a great story of Mr Martin who won t hire advisers who don t have personal accounts of at least 200,000, because otherwise they are full of baloney But back on page 75, they admit they are poor themselves So why should I listen to their advice They spend a lot of time on topics that completely lose my interest To spend pages showing how rich guys typically buy cars by the pound, and then to review how many pounds each car weighs this really put me to sleep They list the cars millionaires typically buy, and then to go on to list pretty much every car in existence Or to review for pages and pages the ancestral backgrounds of the 3,000 millionaires they happened to pick from geocoded neighborhoods proves nothing to me But then the authors lose confidence, and slap a disclaimer quietly on page 228 we have gone out of our way to emphasize that there are no sure steps one can take to become wealthy But wait Then what are the other 254 pages about I am lost again Because they spend a whole lot of time enumerating some pretty sound steps that millionaires take to get wealthy 1 they live well below their means 2 they allocate Most importantly, there were 5.3 million households in America in 1997 when the book was written that were millionaires Yet they only interviewed 3,000 households To put forth statistics as typical based on the low percentage they interviewed can t possibly be accepted as statistical or fact On page 249, they review that they chose the millionaires they surveyed based on geocoded neighborhoods but this goes against what they spent 248 pages proclaiming They spend the entire book professing that millionaires don t live in certain neighborhoods, then go on to say they only know this because they surveyed certain probable high net worth neighborhoods.With all this said, I am not disagreeing with any of the tenants of wealth accumulation they advocate I follow them myself, and highly, highly recommend them So I reluctantly recommend people read the book just to glean that bit, but with hesitance because I understand they will have to sort through boring charts, stereotyping, and bad writing to get advice Readers would be better off reading a Ramsey book, which is captivating and not doesn t drown out the message with boring stats There is some good insight in here live below your means, don t spend 10 years in advanced education with hundreds of thousands of dollars in student loans to hold you back, invest your money at an early age, don t cripple your children by making them economically dependent, teach your children to fish, don t get caught up with keeping up with Joneses, work hard, plan, pick a compatible spouse, use a budget, track your spending, etc All of this is great advice According to.05% of the millionaires in America According to this book, there are two kinds of people under accumulators of wealth UAWs , who spend everything they earn as soon as they get it to say nothing of credit cards and prodigious accumulators of wealth PAWs , people who live frugally, save, invest, and end up becoming millionaires So when you see someone who lives in a fancy house and drives a fancy car, chances are, he s not a millionaire He may be a high earner, but he s also a big spender, so he s a UAW A real millionaire According to this book, there are two kinds of people under accumulators of wealth UAWs , who spend everything they earn as soon as they get it to say nothing of credit cards and prodigious accumulators of wealth PAWs , people who live frugally, save, invest, and end up becoming millionaires So when you see someone who lives in a fancy house and drives a fancy car, chances are, he s not a millionaire He may be a high earner, but he s also a big spender, so he s a UAW A real millionaire lives humbly and isn t into consumption He might even live right next door Now that s an inspiring idea, one that made me go into this book with some hope of getting rich someday, but I didn t have to read very far to realize that I m in a hopeless UAW rut That made reading it a pretty unpleasant look in the mirror, especially since I believe that what the authors are saying is completely true I ve seen it first hand I ve worked for two estate planning attorneys and a bankruptcy attorney I ve seen both sides.For me, the most painful, shame inducing part of the book was the analysis of parental outpatient economic care I guess it s not really news, but parents who bestow too much of their wealth too easily on their children end up providing for them even in their forties and fifties This was the longest section of the book, and I found it a bit repetitive, but then again, perhaps that s part of my shame reaction Aside from this emotional reaction, I have a few technical criticisms I didn t finish the chapter called You Are Not What You Drive, since cars just don t interest me that much And though the book was full of charts with stats showing the authors research, I stopped looking at these about halfway through the book On the flip side, I would have liked to readabout why the millionaires chose the businesses they did The authors did give some advice on lucrative careers estate planner was number one , but I would have likedAll of that might have induced me to give the book a rating of 2, but I don t think that s fair Just because the book was mostly a downer for me doesn t mean it isn t worth reading It really has gotten me to lookclosely at my spending I just fear that as the book itself warns, crash budgeting can be like crash dieting Will the effect really last There s a lot to say about this book, both positive and negative It had some great ideas in it, some which are possibly quite revelatory for some people, and some really useful information which I would love to ensure certain people I know read However, it was also a very dry read, somewhat repetitive and dwelled on some things I didn t think were all that fascinating like what sorts of cars millionaires drive It also had a lot of charts, which is fun from a stats perspective and lends cred There s a lot to say about this book, both positive and negative It had some great ideas in it, some which are possibly quite revelatory for some people, and some really useful information which I would love to ensure certain people I know read However, it was also a very dry read, somewhat repetitive and dwelled on some things I didn t think were all that fascinating like what sorts of cars millionaires drive It also had a lot of charts, which is fun from a stats perspective and lends credibility, but it s a bit too much irrelevant info to take in I honestly didn t care what sort of ancestry millionaires had or what cars they drove, but I saw that the authors were doing the Mythbusters thing and making sure people didn t believe in completely false things I felt they spent an incredible amount of this book talking about what happens to the kids of the rich However, this can be used as a great parental tool to ensure parents teach their kids the right money tactics, whether starting rich or not It also ends with sensible career ideas to suggest to kids which make a lot of sense with the reasoning.In essence, the lessons from the book are to remain frugal, save money and to ensure you keep your money wherever possible Employ good financial and legal help to ensure you save on taxes, invest wisely and whatnot Anyway, if you re frugal and live below your means you re on the right path Then increase your income without changing your habits and be sure to invest the rest well and you ll be fine Main message is Be Frugal, invest One driving a Benz is quite likely less worth than one driving a Ford F150 since the Benz owner has already spent money Max price paid by 75% millionaires for Suit 600, Shoes 200, watch 235 50% JCPenney has toughest quality control amongst all stores Millionaires wives are all frugal too They save coupons etc 1 All have annual household budget2 All have accountant3 All have investments in stocks, real estate, business etc4 Shopping method Main message is Be Frugal, invest One driving a Benz is quite likely less worth than one driving a Ford F150 since the Benz owner has already spent money Max price paid by 75% millionaires for Suit 600, Shoes 200, watch 235 50% JCPenney has toughest quality control amongst all stores Millionaires wives are all frugal too They save coupons etc 1 All have annual household budget2 All have accountant3 All have investments in stocks, real estate, business etc4 Shopping method and principles i.e car purchase VIMP It takes only one fancy item to start the snowball effect i.e Rolls Royce as a gift was denied by a millionaire because all his accessories, clothes etc things would needed an upgrade to match that status symbol Millionaires don t care about status symbols The author calls them artifacts They own, Ford F150 , Cadillac, Lincoln Town cars, Jeep, Lexus, Mercedes,, Oldsmobile, Chevy, Toyota, Buick, Nissan, Volvo, Chrysler, Jaguar They tend to go forweight per dollar criteria subconciously comforts, reliability, safety The book gives distribution of folks per their ancesterial origin, job function, inheritance Frugal millionaires have less worries in general Doctors Lawyers typically earn a lot and spend a lot The book could have been a little less lengthy however, good thing is that it has come out of a thorough statistics from numerous interviews of millionaires Household net worth Household Income Investments expenses Typically, one tries to maximize income but also increases expenses to either show off or to be at par with the society or because one thinks that spending enjoying It takes only one high class item to start the snow ball effect Worth of a person should be Age 10 Annual earnings before taxes no investment i.e for a 30 year old making 100k year, his worth should be 300k orIf you are rich, your kids could have less net worth if you get into a teaching of spending or supporting them financially The question that remains unanswered for me is What to do with all the money when I save say a few millions I don t end up spending it due to my habit, If I start spending, I am doing so when I am old and can supposedly enjoy less If there is a recession or major financial problem heart transplant , then I havechances of survival assuming US doesn t adapt good strategies of Europe and Canada about healthcare Once I die, Govt takes most for doing nothing It talks about what one should do with all the money main part is to donate and distribute and how I shall read it when I am older or a millionaire, whichever happens first The issues with financially helping out kids and continuing the help when they are adults is well listed Economic Outpatient Care We weaken the weak by helping him financially 1 Never tell children that their parents are wealthy.2 Teach discipline and frugality3 Don t let them realize that you are affluent until after they have established a mature, disciplined, and adult life style and profession 4 Minimize discussions of the items that each child and grandchild will inherit or receive as gifts5 Never give cash or other significant gifts to your adult children as part of a negotiation strategy.6 Stay out of your adult children s family matters7 Don t try to compete with your children8 Always remember that you children are individuals9 Emphasize your children s achievements, no matter how small, not their or your symbols of success 10 Tell your children that there are a lot of thingsvaluable than moneyI, however, would rather have that questions hanging over me than having worries of how to sponsor my brother s kids education while carrying a 500 Nokia phone and driving a 8 cylinder fancy sports car This was a great audio and text book yes, I got both versions I especially enjoyed the chapter that had Working for the Tax Man and The Martin Method 95% of the millionaires own stocks most have 20% orof their wealth in publicly traded stocks.Build a good money team accountant, attorney, financial advisor, and you and spouse.Looking to build your money team Ask your CPA If you do not have CPA get one.Be frugal, know your financial picture, and have goals with your money This was a great audio and text book yes, I got both versions I especially enjoyed the chapter that had Working for the Tax Man and The Martin Method 95% of the millionaires own stocks most have 20% orof their wealth in publicly traded stocks.Build a good money team accountant, attorney, financial advisor, and you and spouse.Looking to build your money team Ask your CPA If you do not have CPA get one.Be frugal, know your financial picture, and have goals with your money.The good millionaires know how much their costs are in life how much they spend shopping, traveling, etc.You heard of emergency fund, car fund, retirement fund, etc well I am adding the Go to Hell Fund The typical millionaire has a Go to Hell Fund which allows them to quit their job and not work for like 10 years orSo when you quit your job or get fired, you can say to your employer go to hell and walk out the door and not worry about working.I like this part in the book about UAWs and PAWs You got three categories to millionaires.UAW Under Accumulator of Wealth 1 2 of AAW AAW Average Accumulator of Wealth PAW Prodigious Accumulator of Wealth 2 AAW To figure out what category you are in do the following formula Age 10 x IncomeExample Age 30, Income 45,00030 10 45000 135,000This person should have net worth of 135K.UAW 67,500AAW 135,000PAW 270,000To figure out your actual net worth do the following formula Assets LiabilitiesExample Age 30, Income 45,000, Credit Card Debt 12,0000, Car Loan 20,00045000 12000 20000 13,000This person has Net Worth of 13K Getting rich is most often done by being frugal, not by making outrageous, Trump like gambits The last 10 years or so have been marked by periods of investment euphoria tech housing , followed by terrible hangovers that have destroyed the wealth of millions within a few years or even months The latest bubble George Soros actually thinks 2 bubbles popped simultaneously last year the housing bubble and the 20 year credit bubble could potentially be muchdevastating than the tech bub Getting rich is most often done by being frugal, not by making outrageous, Trump like gambits The last 10 years or so have been marked by periods of investment euphoria tech housing , followed by terrible hangovers that have destroyed the wealth of millions within a few years or even months The latest bubble George Soros actually thinks 2 bubbles popped simultaneously last year the housing bubble and the 20 year credit bubble could potentially be muchdevastating than the tech bubble, because the bubble was based on leverage and credit, and so participants often risked everything they owned and, and a mere 20% decline in home prices wiped away their entire wealth, and left them without the means to even pay the mortgage once it reset There have been many foreclosures in the past year Look for , and soon a flood of bankruptcies Bankruptcies will be especially devastating because of recent legislation modifying bankruptcy laws.It should be noted that there are many so called self help finance books out there that are very dangerous for the common man, among them the Rich Dad series They encourage normal people, uneducated in finance, to make such risky leveraged investments like buying second homes with no money down Such books and advice should be avoided like the plague Robert Kiyosaki Rich Dad author has absolutely no shame in not only misrepresenting himself and his so called Rich Dad a figment of his imagination , but tickling man s inclination to gamble Except that when people lose playing his game, they can lose literally everything.Turning attention to the actual book being reviewed, a large part of the book is devoted to profiling the typical millionaire Some common qualities are a Most millionaires are married couples, never divorced This should make sense for several reasons First, there are no alimony child support bills to weigh down expenses Second, married people tend to beemotionally stable, and thus are less prone to spending sprees or other extravagance Third, married people don t feel they need fancy things to impress others Although children do indeed cost a lot of money, the reality of parenthood encourages people to change their goals to befar sighted, which usually encourages saving.b Most millionaires aren t extravagant, nor do they have a desire to live like rock stars Money provides security to them and their family, and often their tastes and needs are as simple as the rest of ours I remember the story of the husband in the book who, after selling his business for millions of dollars, gave his wife a check for a large chunk of that money while she was clipping coupons at the kitchen table She said Oh thanks honey, that s very nice of you, and went right on clipping coupons c It is true that a disproportionate number of millionaires are business owners This makes sense though although most businesses fail, the ones that succeed are bound to rise in value it costs muchto buy a successful business than to start a new one So the sale of a successful business is often likely to generate a one time windfall that blue white collars are unlikely to experience The main point of this section was to point out that certain cultures I think Irish and certain sections of Eastern Europe encourage members to open businesses and make their own way That is reflected in the statistics.I like this book because it brings together common sense with hard data to present a convincing argument that the best way to attain wealth is to a save, b be frugal tame your desires, c work hard, d become a self starter, and e get married and don t divorce Common sense all of them, and all of which have happy side effects beyond the monetary ones


About the Author: Thomas J. Stanley

Dr Stanley wrote The Millionaire Next Door and The Millionaire Mind These books spentthan 170 weeks combined on the New York Times Best Sellers list His Millionaire Women Next Door was selected as a finalist for the business book of the year by the Independent Publishers Association and was on several business best sellers lists Dr Stanley s first three books, Marketing to the Affluent, Selling to the Affluent, and Networking with the Affluent and Their Advisors, were all designated as outstanding business books In total,than three million copies of Dr Stanley s books have been sold worldwide.Dr Stanley authoredthan 40 published articles which deal with the affluent in America Dr Stanley appeared as a featured guest numerous times on The Today Show, 20 20, and The Oprah Winfrey Show His work has been cited in the national media, including The Wall Street Journal, The New York Times, Forbes, Fortune, Time, Money Magazine, U.S News and World Report, and USA Today.Dr Stanley served as chairman of the Affluent Market Institute through which he has developed research based marketing and selling strategies for identifying, attracting and retaining wealthy clients He served as the chief advisor for DataPoints, a technology and research company based on his research and work, from 2013 to 2015 Dr Stanley received his doctorate in business administration from The University of Georgia He was a university professor for 20 years, leaving to pursue a career in research and writing about America s millionaires At Georgia State University he was named Omicron Delta Kappa s Outstanding Professor.


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