Book Review: The Millionaire Next Door

PUBLISHED ON OCT 15, 2018

TL;DR: I just finished reading The Millionaire Next Door by Thomas J. Stanley and I thought it was very good.

This was a gift from my dad and, if I’m not mistaken, my dad must have picked up his own copy of this book during its first publication back in 1996 because I remember seeing it on his nightstand and bookshelf since I was incredibly young. After reading it myself, I know I will certainly be holding onto it and will probably buy a copy for each of my own kids when they reach a certain age.

What is the Gist of this Book?

This book attempts to change your perception of what a millionaire might look and act like. When you think “wealthy” what do you think of? Perhaps you picture a big house with a few luxury European cars in the garage. For a job you might think of a big-time Executive or a top-level attorney. This book throws those perceptions out the window:

  • Many of the millionaires interviewed in the book live well below their means.
    • They typically buy cars used and American-made (no expensive import taxes).
    • They live in modest homes, their neighbors are not usually affluent as well.
  • A lot of them are entrepreneurs and/or make modest but not extravagant income.
    • While a lot of them have a college education (usually bachelor level and not much further) a statistically significant number of them have no experience in higher education.

Who is this Book For?

If you’re looking for a book that provides granular financial advice like “purchase X stock” or “invest in Y accounts” then look for a different book. There are a few snippets throughout the book that resemble this kind of advice, but they are few and far in between.

I would say this book would have been very valuable when I was a young kid. I grew up in a fairly affluent area and, despite that, my dad lived by the tenets of this book. I remember envying my friends who got the new Xbox the day it came out, or got a brand new car for their 16th birthday (and for some, even got a new car after they crashed their old one). This book would have demonstrated to me that those kids are actually being set up for failure when they receive the harsh reality check that they cannot sustain that lifestyle and retire at a decent age.

Admittedly, the book is over 22 years old and it does show its age in some parts. For one thing, Stanley mentions near the end of the book that a smart investment would likely be electronic stores (tell that to RadioShack and Circuit City). The book also seems to advocate traditional family structures more than others; from my observation, a lot of the millionaire examples used in the book are grandfathers with wives who either did not work or did work until they reached motherhood.

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