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Showing 1-10 of 1,370 reviews(Verified Purchases). See all 2,614 reviews
on June 3, 2017
This book was not at all what I was expecting, but contains some good advice that many would benefit from. For some background, my wife and I are relatively young and have career jobs. I bought this book for information on making the most of any extra income, learning more about investing strategies, options for generating passive income, and improving my personal finances. I did learn a few things, but not on these topics (maybe a bit on the last point). The book primarily focuses on interesting finds and anecdotes from the authors' years of research on millionaires in America.

The book is divided into eight chapters:
1. Meet the Millionaire Next Door
2. Frugal Frugal Frugal
3. Time, Energy, and Money
4. You Aren't What You Drive
5. Economic Outpatient Care
6. Affirmative Action, Family Style
7. Find Your Niche
8. Jobs: Millionaire vs. Heirs

The author essentially splits everyone into two categories: Underaccumulators of Wealth (UAWs) and Prodigious Accumulators of Wealth (PAWs). UAWs have a low net worth relative to income, and the opposite for PAWs and uses these terms throughout the book.

His primary argument is that PAWs get to be wealthy by living well below their means - these are people who do not look like millionaires, they live in modest neighborhoods, drive domestic sedans, wear a Timex, and usually have a blue-collar job that does not come with an expensive lifestyle associated and as a result can accumulate a sizeable nest egg. On the other hand, UAWs are typically well-educated professionals with high paying and high profile jobs (doctors, attorneys), but due to societal pressures associated with their social standing are forced to squander all their money living in luxury neighborhoods, driving German cars, and sending their kids to private schools. Their expensive lifestyle means that they spend most of their income and as a result have a low net worth, despite outward appearances.

I agree that this is good advice for just about anyone: live below your means and prioritize financial security over social standing. Growing up in a single-income family living in a modest middle class neighborhood, I'm quite used to the live-below-your-means philosophy and I think it gave me at least some sense of good financial discipline. If my parents are any indication, it works great.

Where the authors really lost my interest is that the rest of the book is chock full of anecdotes and some rather uninformative statistics to drive a few other points home. While some of these are good points and undoubtedly useful, they always seem to come with caveats or don't draw any real conclusion, which I found frustrating. Most of the points could have been made succinctly in about 1/10 the amount of page space the authors dedicate to them. These include:

- Most millionaires in America are self employed business owners, because they run their personal finances like their business finances. However, going into business for yourself is very risky so we don't really recommend that as a viable way to get rich.

- Very few millionaires have ever spent much money on a nice suit, pair of shoes, or luxury watch. They usually live in modest neighborhoods or rural areas where the cost of living and social pressures of consumerism are lower.

- First generation millionaires (often immigrants) tend to be succeeded by children with financial struggles, since the parent's desire to "give them a better life" pushes them into careers where they become UAWs, and their upbringing in our consumerist culture impedes their ability to live frugally. But even if it turns them into UAWs, encourage them to go to college and aspire to a while-collar professional job.

- Parents giving money to their children develops and reinforces poor financial habits. This money is almost always immediately spent, and these children generally have no savings since they are looking to their parents as their safety net and counting on an inheritance. Doing things like buying children a house in an upscale neighborhood or sending grandkids to a private school actually makes the children worse off, since they have to spend more to maintain the associated lifestyle.

- The authors spend an inordinate amount of time and space comparing different careers, which I found next to useless since I'm very happy with my chosen career (Engineer) and have no intention of changing. They continually deride pretty much every professional job you can think of, and simultaneously praises how great working for yourself or owning a business is while going on about how difficult and risky it is to actually own a successful business. The author does not recommend changing careers, but again, this is more of a discussion of what their research has shown than any sort of "how to" advice.

- Car buyers fall into four categories: whether you buy new or used, and whether you buy from the same place or shop around. The authors devote an entire chapter to this while only coming to the following conclusions: no method of buying a car is the clear winner, but if you own a business you may benefit from your connections with the owners of car dealerships; and most millionaires drive unassuming domestic (and to a lesser extent, Japanese) cars purchased new or lightly used.

A final note - curiously, I found no mention of anything real-estate related, which to me is highly unusual in any sort of book about building wealth. The only investment advice found here is in the final chapter and could be summarized as "invest in what you know." That is, if you work in a certain sector, your knowledge of the industry will help you make good investment decisions. Not sure how I feel about this one. For example: not working in technology doesn't mean blue-chip tech stocks are a bad investment. Take it with a grain of salt.

One last complaint: most of the financial figures are presented in mid-1990s dollars. I found it frustrating to have to mentally convert to today's dollars to get a relative sense. The authors took the time to update the preface in 2010, it would have been nice to see a revision to the figures quoted throughout the book. (For reference, one 1996 dollar is worth about 1.6 dollars in 2017).

In summary, I was surprised about the amount of praise heaped on this book. I would hardly categorize it as a self-help book, it's more a retrospective on the authors' research and a collection of anecdotes and interesting conclusions about the countless Americans leading unglamorous lives while accumulating appreciable amounts of wealth. It's a quick read and I made it through the whole book on a 5-hour flight with time to spare. I would only recommend this book as an interesting overview of some good financial habits, or as an eye-opener for those with luxurious financial tendencies who struggle to save money despite their income level. However, for those who have already developed some discipline and are looking for detailed strategies and advice on personal finance and building wealth via investments and generating passive income, look elsewhere.
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on May 1, 2016
This is such an inspiring read because it shows almost anyone can become a millionaire if you live below your means and invest well. I love that the majority of millionaires are people you'd never suspect because they don't live flashy lives in big houses with high-status toys abounding. If you make $200,000 a year, but spend $220,000, you're in trouble. But if you make $50,000 a year and live on $35,000, investing the rest, over time you're going to be in great shape.

I grew up in a super-affluent suburb. My friends' lived in big houses and mansions with luxury cars and country club memberships. We lived in one of the smallest houses in the suburb. My mom was so frugal. I thought it was such a drag!! But when she died (too young), she'd saved enough so that my dad, who lived another 30-some years, was comfortable in retirement. I wonder now if any of my high school friends' parents were actually living on the edge in trying to keep up with the Joneses.

Years ago, I used to charge like crazy. Now I save like crazy, just like my mom.
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on August 25, 2017
At first blush this book is how to make you a millionaire. However under the surface, through interviews, Stanley shows you how to accumulate that 1M dollars. In a nutshell, this book is more about behavioural finance than about which securities to pick. A worthwhile read to get anyone started towards saving for that converted 1M dollars.
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on September 14, 2016
This is one of my all-time favorite books. I have read quite a few personal finance books and this is by far my favorite one. Dr. Stanley through actual facts and numbers dispels all of the misconceptions that we have about who the average wealthy person in the US is and how they got there. Many popular personal finance books are based on some anecdotal advice about "doing what I did to get rich". The problem with most of those books is that the paths that they personally took largely aren't replicable by the average person and suffer from extreme survivorship bias. This book focuses on a lot of habits and attitudes that anyone can implement. Highly recommended.
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on March 2, 2017
Very good read. We shared it with our children who are too often influenced by mainstream media where everyone wears a Rolex and flies on a private jet to their personal island. Sharing the highlights of this book gives them a bit of reality of what true wealth looks like and what it takes to accumulate it.
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on August 9, 2014
This should be assigned reading in every high school in the country. It would help eliminate the crisis in people's personal finances we see in today's society. Yet this book is just as much for the old than the young.

Rather than preach opinion or philosophy of the rich, this book brilliantly lays out through research of how the wealthy live, spend and save. It's amazing to see how simple the habits are of the wealthy separating them from the poor. It really shows how easy it is to become wealthy if you can change your habits, but I guess it's not so easy for most to do.

One of the most fascinating parts of the book I think is when they talk about high income earners (doctors, lawyers, etc.) and their tendency to not be worth a lot in comparison to their income. With so much money coming in they tend to spend most of it...houses, cars, boats, vacas, etc, with expectations to just make the same amount the next year. While people with much lower incomes in many cases show more wealth due to living below their means while their saving and investing habits are much better. It really debunks the common assumption of high income always equals more wealth.

If you're pursuing to become wealthy or better your families future, you'll wish you have read this book a long time ago, a must read!
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on September 17, 2017
This book is phenomenal and will make you wealthy if you follow the contents.... It is a research study of who does well in life by ethnicity.
A must read for anyone trying to improve his or her finances...
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on August 22, 2017
Chapters don't flow as well as I would've thought given the amount of time and research the authors say they it took to put the book together but nonetheless, the information is priceless. My biggest take away was the mindset and behaviors wealthy people exhibit on a daily basis that allow them to live the way that they do. About to read it a second time as the first was more of quick read. Highly recommend for anyone looking to challenge their thinking about money!
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on December 29, 2014
This book is the result of an 11 year study by the authors on who is the typical millionaire in the US.

It's surprising who is, and it's even more surprising how they managed to get there.


Though, for me it's not surprising, I think it's more surprising for everyone who ever reads it, and realizes that they could be a millionaire too, if they exercise discipline. If they build a strong base of it, if they learn to live it, if they know how to act on it.

Discipline is what got all of their subjects to where they are, not inheriting wealth, not fall upon it, not buying it on stock market.

They earned it the hard way, and learned to hold onto it in the best way.

Make a decision in your own life, and learn to love the life you have. Add in the lessons learned from these people, and while you may not become a millionaire immediately, you will be well on your way to becoming one.
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on March 2, 2017
This is a must read classic for those who's decisions and lives are reality based. If you're looking for bling, fluff or hype, don't bother reading this book, it's only for those who can take reality as it is. Dr Stanley used a scientific approach to study the lives of actual millionaires and then shares all his insights with the reader. There's nothing else like this book except for perhaps, the author's other books.
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