Reg Gupton posts a guest book review of the Millionaire Next Door

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

Review by Peter Butler

Oh no - not another “Get Rich Quick Book”, mercy!

I originally bought this book in a moment of weakness. I thought it promised juicy tittle-tattle about how overpaid sports stars blow their stash on state-of-the-art toys and fun. The book turned out to be nothing like that. It was far more interesting. Stanley and Danko are post graduate economists who have spent many years talking to and analyzing rich folks. That is real rich people. Not the ones wearing Calvin Klein as they drive their Lexus to the Country Club, but those who actually have two to ten big ones in the bank. They asked the genuine wealthy everything about their lives. What they do, what they wear, what they eat, where they live and how much time they spend on their monthly finances. The results surprised them and they surprise the reader too. They might turn many of your previous assumptions on their head. The people who look as if they are worth millions are the ones who are in weak financial shape, whereas the real millionaires barely deserve a second glance.

The authors show the value of great offense as well as great defense. Just like football, it is important to have both. Making a high salary (good offense) will not keep you rich unless you have a plan to keep it and build it (good defense). One interesting parameter that can change your life is the measurement of your unemployed survival period. This is a number that is extremely influential on the amount of stress in your life. Imagine that you are fired from your job. How many days, or weeks, or months can you survive before you default on your mortgage payments, your car loan and your credit cards? If the period is measured in days or even weeks you are likely to be a nervous wreck. If the period is a few months, you can be pretty calm. But if you can survive for a few years, you are as cool as a cucumber. It’s one of those ostrich-head-in-the-sand considerations that is not rocket science, but can make a big difference to your life if you put the odds in your own favor. If you feel that striving to get rich is a bit distasteful, think of it more as not being poor, and also not being stressed.

The book is full of observations such as this one. It doesn’t scold or preach but the message soon sinks in. At our house we think it is so useful, that we give copies to close friends, young family members leaving home for the first time, and friends getting married.

So not only does this book help you to get rich slow, it will also reduce your stress. And as an added bonus it gives you the confidence to sneer at drivers of brand new luxury cars while bumping along in your humble jalopy. Ooh delicious.

You can buy the book here: The Millionaire Next Door

Reg Gupton