We have all been seduced by the idea of money. Who does not love cash to make life comfortable and fly solo. There have been multiple books on how millionaires become so rich. An interesting book in this regard is ‘The Millionaire Next Door’ which summarizes how millionaire are able to collect money.
“The Millionaire Next Door” is written by “Thomas J Stanley & William D Danko. The book is a broad based survey on millionaires living in U.S . The book talks about the lifestyle of millionaires and how they achieved this status; It also sheds light on spending habits of the rich.
How Much Educated Are The MIillionaires
It is an interesting fact that education is not the benchmark for being rich. The book reveals that only 17% of millionaires attended private high school while 18% have master’s degree. Moreover, 8% of the millionaires have law degree, 6% have medical degree and only 6% are having Ph.D degree.
Nonetheless, this does not berate education. It just conveys us the idea that even if you are not educated enough, this should not block your road to financial independence.
Millionaire Men Vs Millionaire Women
The discourse about feminism seems to be right according to ‘The Millionaire Next Door’ as the book confirms that men make more wealth than women. There might be multiple reasons for this including gender pay gap, glass ceiling effect and patriarchy.
How Much Millionaires Inherit
Stanley’s book confirms that most of the millionaires are self made. According to the data available in the book, only 19% of the rich receive income from a trust fund or estate. Interestingly, fewer than 20% inherited 10% of the wealth from their ancestors .
We are all tuned to the idea of ‘rich ancestry’ but the book states that more than half of the millionaires never received as much as $1 in inheritance and that’s really mind bending. This illustrates the importance of using one’s own efforts to be successful.
The mindset shift about the millionaires is rooted in this fact that fewer than 10% of them believe they will receive inheritance.
You want to know the percentage of millionaires who did not receive inheritance?
The book says its 84%.
Delving deep into the book reveals that 80% American millionaires are first generation rich; this shows they were not born with a silver spoon in mouth. This shows that Bill gates was right when he said:
“If you’re born poor, it’s not your mistake. But if you die poor, it’s your mistake”.
Lifestyle of Millionaires
We consider millionaires to be extravagant all the time. The book says it is not true.
The statistics in this regard say that half of the millionaires purchase cloth for $399 which is not that big of an amount. While we are attracted to Prada, millionaires spend $140 on shoes.
Budgeting of Millionaires
We are tuned to the idea of millionaires being unaware of their expenses but ‘The Millionaire Next Door’ negates this as well.
Thomas J. Stanley and William D. Danko confirm from their findings that millionaires became so by budgeting and controlling expenses. The statistics in this regard are interesting according to which:
120 millionaires make budget against 100 who don’t.
The concept of budgeting is so valued by millionaires that 62.4% of the millionaires know how much they spent on food, shelter and clothing.
Plastic Money Usage by Millionaires
We feel rich by using credit cards but millionaires are different according to the 1996 book. American Express Platinum card is possessed by 6.2%, Diner’s Club by 3.4% and carte Blanche by 0.9% among total 385 credit cards.
The Summary: The Millionaire Next Door
An excerpt from the book says that the millionaires don’t look – like, dress like, eat like, act like – millionaires.
This confirms that we think millionaires to be spending all the time with disregard to budgeting but that is not the case. They were not educated, they did not inherit much but they made themselves up with persistent effort. This can also be the reason for them not to be splashing money all the time.