How to Become the Millionaire Next Door

Ever been rich? Wish you were? Why? Does money buy happiness? I've been both dirt poor and "very comfortable," and I'll tell you that "very comfortable" beats dirt poor every time. At least being "very comfortable," you don't have the bill collector calling you both at home and at work. You don't worry where your next gallon of gasoline is coming from. I'm not a millionaire yet, but there is always hope.

How does one become a millionaire, you might ask? Do you buy the latest sports car or SUV, to show the neighborhood what a great breadwinner you are? Do you wear $1,000 suits or buy $1,000 watches? When this book was written in 1996, the average millionaire spent less than $399 for a suit, and was driving a car that cost an average of $24,000. He didn't buy a new car every year, but 25% have not purchased a new car in the past four years. A new car doesn't always mean the latest model car, but perhaps a car that has already depreciated substantially. (I've noticed that the authors have chosen to use the male gender in speaking of millionaires rather than the female gender.)

Is your spouse "squeaky" with a buck? Those with spouses who are "squeakier" than they are, have a better chance at becoming a millionaire. My husband and I are both "squeaky" about different things. I like my computer and gardening, he likes eating out. We both enjoy traveling -- at a discount.

Both my brother and sister in law are tight with a buck, yet live in a nice, yet modest home. I visited my brother and used his MAC computer. It drove me NUTS when I could read the downloaded text quicker than it could download it. It isn't that he couldn't afford to buy a new one. He paid cash for his Chrysler New Yorker. He just chose to be squeaky with a buck. He routinely shelters his assets by giving to his children and grandchildren. Better they get it now, than the government after his passing.

A gal my mom knew, was thought to be a millionaire. She owned a series of apartments in Long Beach, California, thought to be valued at $50,000 in the 1950s. Who knows how much they would be worth now? Her home was modest, yet had an in-ground swimming pool. She owned a stick shift Ford, that ground gears each time she shifted. She had a room, dedicated to buying gifts for others, items that she found on sale. She just waited for the occasion to present itself, and she had a built in present. She was interested in my mom's estate when I dissolved it. She asked how much I wanted for a nutcracker. I told her "25 cents." She told me I was asking too much, and refused to buy it.

The authors divide folks into PAWs (Prestigious Accumulators of Wealth)and UAWs (Under Accumulators of Wealth). They constantly compare and contrast these two types of people and their lifestyles throughout the book. Thomas Stanley and William Danko, both Ph.D.s consider UAWs as folks who wear a big hat, and have few cattle. PAWs on the other hand, have a lot of cattle, with a small hat. Which would you rather have, a big hat, or a lot of cattle?

Self employed immigrants have a better chance of becoming millionaires. They tend to be frugal, and pull themselves up by their own bootstraps. Few have had substantial inheritances. Millionaires usually have not gone to private school, yet send their children there, as they value a good education.

I was aghast when I discovered that of the top 20 high income producing occupations, women earned approximately one half the income of their male counterparts. Occupations such as physicians, lawyers, dentists, etc. WHY this is so, I'm not sure. It did mention that woman are more than 4 times more likely to leave the workplace.

A recent 60 Minutes show indicated that the higher a woman's income, the less likely she was to become married. Perhaps a man gauges his masculinity by his ability to out earn his spouse?

Basically, what I learned from this book, was in order to Prestigiously Accumulate Wealth, one needs to artificially short their income. Have you ever heard of the phrase, "Pay yourself first?" That is what I do each and every pay day. I started this practice when I was 13 years old, working in a car wash. I earned $13 per weekend, washing car windows. I kept $3 and banked $10. By the time I got married, I had over $500 in the bank. The numbers don't quite add up, you say, or I got married at an early age? Remember my previous review, about my choice of a first husband. He was DEFINITELY less frugal than I, although some of my savings went to buy an electric typewriter. (I paid my mom the cash, and she put the purchase on her credit card. She was broke.) Also I made the down payment on my mom's car. (I don't think I ever got paid back, monetarily, anyway.) I also purchased my own clothes.

I continue the practice of paying myself first to some extent today. About 30% of my income is put within four modes of "saving." One is a mandatory retirement program through my employer. (Not Social Security) In addition to that, I put a certain percent in my 414H, an optional, nontaxed retirement program, as well as a taxable mutual fund. Our 2000 taxes hit us so hard, I was determined not to let that happen again, and had additional taxes taken out of my check in 2001. With that "savings" my husband I were able to purchase new gutters and flooring for our home, as well as put a certain amount in savings for the new furnace we learned we will soon be needing. I have also been known to make double payments on such items as the principle on our mortgage and car loans, substantially decreasing the interest paid.

The book is fairly easy to read, with about 20 tables, indicating such things as comparing and contrasting what PAWs and UAWs worry about, the average cost of a millionaire's new car, top professions and what each gender earns, value of estates by states, and various information you may have always wondered about. Oh, yes, and millionaires seek consultation with a Certified Public Accountant, on ways to shelter their money, and invest their assets. I guess I won't be a millionaire after all.

Speaking of investing money, I thought it humorous that when one man was cold canvassed by "financial advisers" he told them he wanted their last three year's tax returns along with a list of the stocks they bought, sold and held. Not one financial adviser obliged. And this was BEFORE the tech wreck!

There are 258 pages in this book. Epinions has it incorrectly titled, (again!)the correct title SHOULD BE, "The Millionaire Next Door - The Surprising Secrets of America's Wealthy." This can clearly be read on the photo of the book Epinions displays.

Chapters include:
1) Meet the Millionaire Next Door - 20 pages - profile of a millionaire

2) Frugal, Frugal, Frugal - 44 pages - be tight with a buck

3) Time, Energy and Money - 38 pages - how much time, and energy do you spend trying to increase your wealth?

4) You Aren't What You Drive - 32 pages - how the wealthy choose their transportation

5) Economic Outpatient Care - 24 pages - do you provide for your adult children?

6) Affirmative Action, Family Style - 36 pages - how your money affects your kids

7) Find Your Niche - 16 pages - the best way for you to attract others' money and build your nest egg

8) Jobs: Millionaires versus Heirs - 18 pages - to what line of business most millionaires tend to congregate

Appendi - ? include:
1) How We Find Millionaires

2) 1996 Motor Vehicles: Estimated Price per Pound (I find no relevance here)

3)Businesses/Occupations of Self-Employed Millionaires

When tables mention years, they tend to state "1990" data.