Click here for more details.įool contributor Jim Mueller isn't a millionaire - yet. Trait number eight might have been: They read Motley Fool GreenLight. (After all, it's never too early to begin following the "live below your means advice," is it?) This book provides many insights as to what works and what doesn't, with data obtained from your neighbors. If you haven't picked up a copy of the book and read it, and if you have dreams of becoming wealthy yourself, consider checking a copy out of the library. You may look like you're wealthy, but, as they say, looks can be deceiving.
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ew could have ever supported a high-consumption lifestyle and become millionaires in the same lifetime." In other words, buying lots of frills, such as jewelry from Blue Nile (NASDAQ:NILE) or the latest large screen HD-TV from Circuit City, just because you have a large salary is not exactly the way to become wealthy. In discussing this topic and how it pertains to millionaires, the authors write, "Being frugal is the cornerstone of wealth building. However, I think the chapter that contains the most important advice is the one on living below your means. For instance, their data shows that people who routinely receive financial gifts from their parents every year are favorite customers of credit card companies like MasterCard (NYSE:MA), using credit heavily. Those people that do receive such help tend to be UAWs and not wealthy at all. 4 above, the authors point out that most millionaires did not receive substantial financial help from their parents. In the chapter devoted to what they call economic outpatient care, No. Only 2.7% drive the much flashier - and more expensive - Jaguar (coincidentally, also manufactured by Ford). The most popular are those manufactured by Ford (NYSE:F), such as the F-150 truck. 3 in the above list), they point out that most millionaires - more than 57% - drive American-made cars. For instance, in the chapter devoted to not keeping up with the Joneses (No.
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Stanley and Danko then devote the rest of the book, one chapter each, to a deeper exploration of each trait. They work in the right jobs, often for themselves.
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They target opportunities that benefit from large amounts of spending.ħ. What the authors did was take those similarities and boil them down to a list of seven traits that most millionaires share. While the average biography might not fit every single millionaire, many of them do share similarities. They weave the idea of PAW versus UAW throughout the rest of the book. It stands to reason, and their research bears it out, that most millionaires belong to the former category and not the latter. The authors then introduce the concepts of PAWs, or prodigious accumulators of wealth, and UAWs, or under-accumulators of wealth. They actually spent two or three hours being interviewed by the authors for a measly $250 or less. They are assiduous investors but rarely sell what they are invested in. According to their research, millionaires are usually well-educated (college or better), drive older cars, and are often self-employed. Stanley and Danko begin the book with a biography of the average millionaire. What the authors show, with results from surveys and twenty years of research, is that the path to becoming wealthy usually involves "hard work, perseverance, planning, and, most of all, self-discipline." Well, that puts it into the reach of most of us! (Actually, I was holding out hope for finding the Boardwalk game piece from McDonalds' (NYSE:MCD) Monopoly game.) After all, if you earn $250,000 per year, of course you're wealthy! But what if you spend $255,000 per year? Oops. Writing that seems almost heretical, somehow.
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In The Millionaire Next Door, authors Thomas Stanley and William Danko have turned a career of studying how people become and stay rich into a best-selling book.Ĭontrary to popular conception and shows like Lifestyles of the Rich and Famous, those who earn large salaries are not necessarily wealthy, while those who earn modest salaries can become quite wealthy. They're just not as flashy as you might have thought. They could be your neighbor or the dentist you go to twice a year. Jim is a Senior Analyst for Stock Advisor, Motley Fool Options, and Supernova.