Wednesday, June 3, 2009

The Millionaire Next Door - Thomas J. Stanley and William D. Danko

The Millionaire Next Door
Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D.
Pocket Books
Copyright Date: 1996

According to the cover of The Millionaire Next Door:
The incredible national bestseller that is changing people''s lives -- and increasing their net worth!


Who are the rich in this country? What do they do? Where do they shop? What do they drive? How do they invest? Where did their ancestors come from? How did they get rich? Can I ever become one of them?

Get the answers in The Millionaire Next Door, the never-before-told story about wealth in America. You''ll be surprised at what you find out....

This was highly recommended to my by several people I talked with, so, always being curious about ways to improve my financial standing, I decided to take a look.

Frankly, I found the book a bit disappointing. First of all, and I should have realized it from the start, the book is entirely focused around the United States. I'm Canadian, so a lot of what the authors are mentioning doesn't apply quite the same. Second, the book only has one small line for any strategy other than the one the authors are following in The Millionaire Next Door.

The theme of this book is to live below your means. It's more or less obvious, really that to save money, that's what you have to do. I found it got a bit repetitive though after the first couple of chapters.

I also would have liked more than a couple of lines mentioning the "Pay Yourself First" strategy, which is the one I grew up reading about in David Chilton's The Wealthy Barber and David Bach's Automatic Millionaire series.

There were some interesting points to use as food for thought though, such as some snippets about different investment/savings strategies and plenty of statistics (none of which left me feeling overly hopeful).

Also, being more than ten years old, some of the numbers in The Millionaire Next Door left me wondering. Repeatedly the authors quote prices for houses that just seem outrageously low, as being quite extravagant. Maybe it's just a regional thing though.

Overall, this was quite a quick read, but also rather depressing. I prefer the other two books I've mentioned, The Automatic Millionaire by David Bach and The Wealthy Barber by David Chilton, even though the numbers in the second are even more outdated than in The Millionaire Next Door, as both are quick, informative and also, rather fun at times.

I will just note here that I have no background in finance and these are just my opinions on the books I've read.

Other personal finance themed books I've reviewed:
The Automatic Millionaire Homeowner - David Bach
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