The Millionaire Next Door: The Surprising Secrets of America's Wealthy

Author: Thomas J. Stanley, William D. Danko
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About This Book

"Why aren't I as wealthy as I should be?" Many people ask this question of themselves all the time. Often they are hard-working, well educated middle- to high-income people. Why, then, are so few affluent.

For nearly two decades the answer has been found in the bestselling The Millionaire Next Door: The Surprising Secrets of America's Wealthy, reissued with a new foreword for the twenty-first century by Dr. Thomas J. Stanley. According to the authors, most people have it all wrong about how you become wealthy in America.

Wealth in America is more often the result of hard work, diligent savings, and living below your means than it is about inheritance, advance degrees, and even intelligence. The Millionaire Next Door identifies seven common traits that show up again and again among those who have accumulated wealth.

You will learn, for example, that millionaires bargain shop for used cars, pay a tiny fraction of their wealth in income tax, raise children who are often unaware of their family's wealth until they are adults, and, above all, reject the big-spending lifestyles most of us associate with rich people. In fact, you will learn that the flashy millionaires glamorized in the media represent only a tiny minority of America's rich. Most of the truly wealthy in this country don't live in Beverly Hills or on Park Avenue-they live next door.


by bennysomething   2022-01-19
Except that 80 percent of American millionaires are first generation affluent. Source:
by Secret_Work_Account   2021-12-10

I recommend reading "The Millionaire Next Door", it goes it to more detail about the spending/saving/investing habits of the ~~average~~ most millionaires in America. Living in a culture that prioritizes spending it's not surprising those who do the best financially go against the grain, and are also frowned upon.

by UserNotFoundError666   2021-12-10

>Maybe it’s networth that makes you feel better and not necessarily the income?

Think of it like this, who is truly wealthier in this scenario the person making $60k\year and saving $15K after taxes or the person making $200k\year and only saving $5k?

I would suggest you read "the millionaire next door" by Thomas Stanley it changed my entire outlook on money.

It seems like you have a lot of expenses right now and at your income level you should be able to easily cut back in certain area's in order to save over a million dollars in a few short years which will probably help to alleviate those feelings of "not feeling rich." If I was at that income level I would be living like I only made $75K\year and saving the rest and within 10 years would probably never have to work again. It seems lifestyle creep is what significantly delays building true wealth and could delay your retirement.

by btilly   2021-06-11
Per The Millionaire Next Door (see for the link), most wealthy are those who have a reasonable income but good financial discipline.

Which means that a shocking number of millionaires live in poor neighborhoods and have modest lifestyles.

Those aren't the super-wealthy, of course. But most wealthy people can't be identified by where they live.

by jseliger   2020-02-04
If you want a fine take on this subject, and one that is much better than the comments so far, read The Millionaire Next Door.
by celticmusic   2020-01-27
absolutely not. You do not need to display security to have it, that's a large part of what I meant when I said people like us value different things.

by snathanb   2019-11-17

There's a book tab at the top of the page.

Book list as recommended by our readers

Please find below a list of suggested books by the subscribers of our subreddit. If you have any suggestions / corrections / etc, please message the moderators.

As a side note, we highly suggest looking these books up in your local library, in the spirit of frugality :)


  • The Richest Man in Babylon
  • A Guide to the Good Life
  • In Praise of Idleness -- Free Online Link
  • How I found freedom in an Unfree World
  • The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing
  • Work Less, Live More


  • Your Money or Your Life
  • The Millionaire Next Door


  • The Bogleheads Guide to Investing
  • A Random Walk Down Wallstreet
  • If You Can: How Millenials Can Get Rich Slowly
  • The Four Pillars of Investing
  • The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
  • Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School -- Suggestion - Ignore Rule 9 regarding individual stock picking.
  • The Intelligent Investor -- Caution - Embark on individual stock ownership at your own risk.
  • The Simple Path to Wealth

Early Retirement

  • Get a Life: You Don't Need a Million to Retire Well
  • Early Retirement Extreme
  • Building Wealth And Being Happy: A Practical Guide To Financial Independence
by BranTheBuildar   2019-11-17

The majority of rich americans are either minimalist or thrifty.

And that is a key component in why they are rich.

People so rich that they can be flagrantly wasteful are exceedingly rare, and generally they don't stay rich.

by PinBot1138   2019-11-17

>The jets and all that other crap seem like a better value renting.

Huh? $3 million in total wealth isn't much, especially for that. Please, don't do that. I strongly recommend that you read The Millionaire Next Door: The Surprising Secrets of America's Wealthy. I know several that make that amount in less than 2 months, and you wouldn't know it, because they live frugally and humbly, including driving beat-up old minivans. Some of them do have nice shit (e.g. palace-sized mansions) but out in the street, they don't flex, and others live in small, modest homes in middle class neighborhoods. At best, they might have a Model 3, S, or X that they also use.


For the sake of argument and with some fuzzy math, if you put all $3 million into an index fund that's earning you 6%, that's $180,000/year. That is a lot of money for a 20 year old, and an obligatory Uncle Ben quote goes here. You're virtually set for life and can do anything that you want, and I'd probably use that time and money to go become a full time student in any number of mediums: Udacity, College, Trade School, Real Estate, etc. which would further your skill level for other interests, including but not limited to said rental houses. If you got licensed in trades, you'd be able to legally (well, from a liability angle - nothing is really stopping you from your own maintenance anyways) do your own repair work on your properties, which would save you even more money. I'm not saying that's the most logical option, but it's something to bear in mind.


To answer the relationship/cash aspect (and because I got f'd on this) you'd want a pre-nup, and as others have advised, a great attorney. Some of the relationship warning signs that I wish that I had known, and was covered in this forum yesterday. When it comes to getting serious about a relationship (and until then, if you're going to be active, use protection - child support and/or divorce rape should be a part of your threat vector) then you might want to ask an attorney about shifting assets around to where you're then an employee of yourself (e.g. form an LLC, hire yourself, and pay a meager wage, with the option for bonuses.)

by Safety_first_friends   2019-11-17

>>The jets and all that other crap seem like a better value renting. > >Huh? $3 million in total wealth isn't much, especially for that. Please, don't do that. I strongly recommend that you read The Millionaire Next Door: The Surprising Secrets of America's Wealthy.

Yeah, that bit made me laugh. $3m isn't even remotely close to private jet territory. Try $300m. Lol

Most people that receive a large windfall like this do not fare well OP. At all. Be extremely careful with this money and do not tell anybody. Check out the "Windfall" section in the /r/personalfinance wiki. Also check out /r/fire and /r/fatFIRE.

by twistedlimb   2019-08-24

you should read this- a lot of millionaires live a pretty modest life. part of "being rich" is all about being better than someone else. i don't mind everyone having a certain standard of living that most people would consider "millionaire" lifestyle of free healthcare, good housing, free higher education. that's too easy.

by 512165381   2019-08-24

I started i in the bottom 1%. Went to unit, worked in IT contracting, met the right people.

You need to realist the system that has been running for the past 30 years is against you. Its called "neoliberalism". Its the reason the middle class in Australia and the US are going nowhere, manufacturing has collapsed, and China/Russia/Brazil/India have boomed.

You need need to know how the system works and use it to you advantage. Australia is the tax deduction capital of the world.

by Communist_Pants   2019-08-24

Most millionaires drive sedans that are 8+ years old.

by skookumchuck   2019-05-26
> Nobody gets rich via income.

85% of American millionaires are self-made (i.e. first generation).

"The Millionaire Next Door"

by VestedValkyrie   2018-11-10

This explains it:

The Millionaire Next Door: The Surprising Secrets of America's Wealthy

Essentially: the super super wealthy are less than 1% of the population. Meanwhile much of the actual top 10-1% tend to be in jobs that go along with conspicuous consumption. Think lawyer, banker, accountant, doctor. They tend to feel that they have to maintain a certain type of lifestyle to be “respectable” in their profession.

There’s also a lot of people who work in tech, many of whom are young and may not save much because they want to “enjoy life” and aren’t necessarily thinking ahead. (Although they do tend to have stocks.)

by 512165381   2018-11-10

Buffet owns and manages businesses, not just investing in stocks. You become a business owner by either buying or starting your own business - think about that.

You will gain experience if you work in a large company, but for that you need qualifications. Maybe a business degree, accounting qualifications, MBA, or similar.

Try reading "The Millionaire Next Door ". You can learn how to become a millionaire but becoming a billionaire is another proposition.

The internet can not tell you what to do. You need to make your own decisions.

eg for me

by tRacer4201   2018-11-10

You're making claims and then confidently stating the burden of proof to prove otherwise is on people who disagree.

That's not how this works...

That's not how any of this works...

In general, responsible people with high net worth don't drive expensive, imported cars. People who tend to dive luxury automobiles are the folks who might have low or high income but basically little net worth, living paycheck to paycheck or not even that but surviving off welfare provided by wealthy parents or other relatives

Source: The Millionaire Next Door

by HipToBeQueer   2018-03-19

Similairly, it is the first generation(s) of imigrants who historically in America are very productive and start more businesses, while their children often don't inherit that trait at all, but instead already have the wealth they need because of their parents. Read about it in The millionaire Next Door (classic)

Feels like the wealth and riches are more a product of what makes a person productive and happy, but the wealth itself doesn't necessarily create more happiness when only inherited.

by wayahbaldy   2018-03-19

1) Start a successful small business
2) Work your ass off
3) Spend less than you make

by isthisfunforyou719   2018-03-19

The bit your missing is those on the FIRE path generally come in one of two version: the first group approach FIRE by driving down their living expenses extremely low. Examples approaches are living off-the-grid tiny houses and eating rice and beans. Another low-cost tactic is living in low cost of living places (COLA) and in the extreme means moving to poorer countries ("retirement hacking"), e.g. Mexico with it's good weather and your USD goes further. MMM (build all my own stuff) and Market Timer (living in a cheap country) are two examples. I have a feeling this group is actually the minority of the two, but I don't have any surveys. I've only met two this type IRL (well, living this way by choice).

The other type are high income earners who save a high percentages of their income. Bogleheads's survery and the little bit of self-reported data in the BH survey), this appears to be the more common path to FI. It certainly is easier to save lots when you earn a lot rather than try to squeeze every expense out of your life day in and day out for decades.