The Millionaire Next Door
Most of the wealthy people in America don’t have high-end lifestyles. Actually, it’s quite hard to tell whether they are wealthy because of their simple lives. Unlike the people who live in expensive homes and status lifestyles yet they are not wealthy. In the book, “The Millionaire Next Door”, it illustrates these two kinds of people and how the wealthy accumulate their capital. The authors describe that wealth is more than just having advanced degrees, intelligence, luck or inheritance that helps people to become wealthy (Stanley & Danko, 1996). Instead, it is mostly as a result of hard work, discipline, perseverance and proper planning.
The most surprising thing from the book is that the people with well-paying jobs and white collar professions devote their money to luxurious things or status items. They don’t invest and they are poor savers. On the contrary, the wealthy people are considered to be in the middle class. They do blue-collar jobs but they know how to take risks and invest (Stanley & Danko, 1996). They prefer owning only significant amounts of appreciable assets than buying and possessing many materials. This is how they generate income bit by bit and mostly they prefer being financially independent. They start investing at an early age and they channel out resources that enable them to accumulate wealth. Therefore, they are wise spenders since they know how to handle their finances.
This is quite interesting because the people, who admire living lavishly, just do so for show off. It is quite unfortunate because, with time, they become insecure in maintaining their luxurious lifestyles. They become broke and hopeless thus end up accumulating debts since they fail to establish a financial plan for them and their families. Therefore, the authors highlight the importance of spending less and leaving within one’s means and that is how the foundation of building wealth is started.
Stanley, T. J., & Danko, W. D. (1996). The Millionaire Next Door: The Surprising Secrets of America’s Wealthy (Atlanta, Ga. Longstreet Press, 16, 32.