The Millionaire Next Door

The Millionaire Next Door just recently released a new edition, and I was sent a review copy. Instead of just giving you an overview of the book I want to take out the specific themes that we all need to be reminded of.

If you want a comprehensive review take a look at these:

#1 Not All Millionaires Act Wealthy

The book goes into a ton of statistics. A few really interesting ones:

  • Most millionaire’s surveyed don’t drive nice cars. The most common car driven by a millionaire is a Ford.
  • 80% of millionaire’s are first generation rich (meaning they didn’t inherit their wealth)

They believe that financial freedom in terms of having more choices is more important than a higher social status.

 

#2 Not All High Income Earners are Millionaires

I know from experience that earning good money doesn’t mean you are on your way to a million. Specifically a lot of evidence in the book (as well as interviews I have done personally) show that millionaire’s are excellent with personal finance.

They understand that you cannot spend more than you make. While that is an easy rule that most of us know, many don’t follow it. Whether it’s for the car breaking or to go on vacation irresponsibility with your personal finance will never make you wealthy no matter how much money you make.

Sometimes when I see a really nice house or a nice car I step back and ask, I wonder how much debt they might be in? Things look so nice on the surface but you never know what the truth is.

Many high income earners are just like low income earners in debt, trying to figure out personal finances before it’s too late.

 

To Buy the Book?

I would highly recommend the book for someone who, like me, loves data. My husband thinks I am crazy because when you look through the book all you see are charts and graphs and percentages.

Just as Trent from the Simple Dollar explains in his review, this book has an age bias. It’s calculations are not meant for a younger generation who hasn’t been earning at their maximum potential for awhile. So if you are younger disregard some of the calculations for what your net worth should be.

If you are really interested in the facts and data of a typical millionaire then buy this book. If you are looking for inspiration about becoming a millionaire and what traits made them successful I would recommend The Millionaire Mind by the same author.

12 Comments - Leave a comment!
  • http://www.everydaybright.com Jen Gresham

    Jamie,

    I sometimes hear that being a millionaire just ain’t what it used to be. That is, we’ve been talking about millionaires for a long time, but our goal hasn’t changed with inflation. What’s your take on that? Do we need to be shooting for 5 million instead of a measly one? :)

    So true about high income earners being in as much debt as low income earners. It may be the best explanation of why income alone won’t make you happy (or stuff, for that matter). It’s shocking really how pervasive it is. The data does sound juicy.

    Thanks for the review!

    • http://17000-days.com Cara Stein

      If we need some empirical evidence, I volunteer to be the guinea pig ant try making it on “only” one million! ;)

    • http://eventualmillionaire.com/blog Jaime

      My goal of a million comes closer every year with inflation! Unfortunately it’s just worth less. I wrote a post about it last year.
      The year I was born (’82) if you were a millionaire you would essentially have 2.3 million in today’s dollars.

      After talking to a lot of millionaires too, they think that one million isn’t much anymore. You need about 3 million today to consider yourself a “millionaire”. Funny huh?

  • http://nathanhangen.com Nathan

    Ford? Wow. I’m curious where in the chart from millionaire to billionaire the trends shift from Ford to Bentley. Would be interesting :)

    • http://eventualmillionaire.com/blog Jaime

      Yeah it would. In talking with the 10 or so I’ve interviewed it seems most of them over 5 million have the nicer cars. The ones closer to the one million mark are just like you and me ;) Set your goals higher everyone! Maybe I should rename the site to eventual billionaire? ;)

      • http://nathanhangen.com Nathan

        I think you should :) Aim high!

        I just motivated myself with new (slightly used) vehicle purchase. Driving a Ford sounds ghastly to me!

        Anyway, great work on the podcast Jaime, you’re doing amazing work.

  • http://www.krantcents.com krantcents

    I enjoyed the “Millionaire Next Door” as well. It removes some myths for most people about millionaires.

  • http://www.fabulouslybroke.com FB @ FabulouslyBroke.com

    They also don’t take into account freelancers whose income varies from year to year :)

  • http://www.financialsamurai.com Financial Samurai

    There’s actually a new code amongst my peers, and that is to do everything possible to hide our wealth and look as poor as possible. I’ll be highlighting a post in the future, that maybe you’ll appreciate.

    In fact, I’ve come up with a book idea on this! Whoo hoo!

    Best, Sam

    • http://eventualmillionaire.com/blog Jaime

      I’d love to talk more about this- recently I was talking with a millionaire and they had the issue of coming on my podcast because they don’t want anyone to know. Tell me more why you feel you need to be secretive?

      (and I know crazy people might be one reason, since being on Yahoo again I’ve had crazy people come out of the woodwork, but still I don’t think I’d keep everything secretive)

    • http://eventualmillionaire.com/blog Jaime

      This is really interesting Sam. I can’t wait to read your post. I’ve spoken to a few millionaires so far that don’t want to say they are millionaires. Even if it’s public knowledge that they sold a company for tens of millions. Why oh why? I want awesome people for my podcast! Maybe I should change the title to “Really Successful People that aren’t necessarily millionaires!”

  • http://increasingworkplaceproductivity.net Increasing Workplace Productivity with Bojan

    I am not a fan of charts and graphs, so thanks for your useful suggestion.

    Hows your blog growing up? Great job with whole lot of those interviews!