aashtech's Full Review: Thomas J. Stanley and William D. Danko - The Milli...
Choose wealth The Millionaire Next Door takes a studiously professorial look at American millionaires. Most of us equate millionaires with celebrities and lavish lifestyles while, in fact, most of them live in the same neighborhoods as you do.
This book is packed with statistics that elaborately dissect the accumulation of wealth, scientifically rendering the specimen completely. This is both a pro and a con.
The pro side of the equation is in the thorough study. Credibility is high. The information presented is informative and very illustrative. The con side, however, is that the delivery is tedious and repetitive.
I met one of the authors and Dr. Danko is a pleasant speaker--engaging, but not challenging. The opposite claim can be made of this book, however, as it is challenging and requires effort to wade through all of it without dosing off.
At its best you get a clear picture of how the simple choices we all make separate us between wealth and (let's just call it) non-wealth.
Pay Me Now, or Pay Me Later
One of the examples offered of a choice for or against wealth (the same choice for or against health, by the way) is in the area of cigarette smoking. The authors offer an illustrative example (which is very common) of two people, husband and wife, with no money to invest. They do, however, consume cigarettes at a rate of three-packs per day between them. This correlates to 1,095 packs per year for forty-six years--a healthy sum of $33,190--more than they paid for their house! A small amount every day that devoured a large amount over time. What would have happened if they had simply invested this amount on a regular basis into a simple indexed mutual fund? They would have amassed nearly $100,000. What would have happened if, instead of smoking cigarettes they chose to invest in Philip Morris stock instead? Their tobacco portfolio would have expanded to over $2 million! But all they saw every day was pocket change traded in for a habit neither could quit until it killed them.
Many of us make similar choices. This morning I spoke to a Financial Planner who often runs up against people who can't afford his $650 planning fee. That's high, but this gentleman was a tax attorney before going into planning. He adds talent to whatever your goals are. At any rate, he opens the session with a questionnaire to understand the clients better and finds that the average person spends $90 per month for cable TV. Do the math and you will see that you could do your financial plan with a talented professional and still have enough left over for basic cable. Better still, invest that $650 in personal training. (Ahem. I'll just step away from the soap box..)
Millionaires are frugal.
That may not be sexy or glamorous, but it is a fact. The typical millionaire accumulates his wealth in his own lifetime. I am generally scrupulous about neutering gender, but the facts simply bear out that most of these millionaires are men. Remember, they made their fortunes over years of slow, steady accumulation. Most of these years, especially the most important early ones, were reluctant in welcoming women to the table. So, the facts are sexist. The average millionaire, with a median net worth of $1.6 million, is male, fifty-seven years old, with three children. They live in a $320,000 home and have done so for twenty years. They wear inexpensive suits and generally run their own business in what can be termed as dull-normal occupations (plumbing, welding, mobile home park ownership, etc.) The cars they drive were purchased used, typically three-years old, and kept running for years.
To continue with the sexist component, most of these realists consider that the world has not changed all that much in the realm of opportunity for their daughters. So they are comfortable sharing more of their wealth with their daughters. Don't be too concerned, though, as these people have raised their children to be self-sufficient. In fact, a large portion of the book discusses the impact of Economic Outpatient Care, or the unfortunate experience of second-generation children relying on their parent's largesse. Examples include people who buy bigger homes than they can afford by using the parent's money for the down payment. This puts them in a neighborhood they can't afford to stay in, so more injections are needed to keep the lifestyle up. Eventually, the parent's estate will be diminished, reducing the inheritance. (Tax experts may argue the details, but the author's are making the case for children not learning the lessons that made the parents wealthy. They can't teach their children and the cycle only lasts for one generation.)
The book displays 32 different tables, covering ancestry, buying habits, and budgeting acumen, along with various predictions and rankings in other areas. Each table is backed with both empirical data and anecdotal evidence.
Ultimately, once you read the book and digest the information, you will realize that very little separates the few that become millionaires from the masses that do not beyond comprehension (understanding that it is possible and deciding how;) diligence; and time. The time you spend reading this book may prove to be a very valuable investment.
What you might find missing is an explanation or road map of your path to riches. There are a number of good titles in this arena, including:
Robert Kiyosaki's Rich Dar, Poor Dad
Robert Kiyosaki's Cashflow Quadrant
Robert Allen's The One Minute Millionaire
Just the facts
Publication year: 1996
ISBN: 0-7434-2037-3
Section: Non-Fiction, Business and Economics
Authors William D. Danko, Ph.D., is associate professor and chair of marketing at the University at Albany, State University of New York. His publications have appeared in the Journal of Consumer Research, Journal of Business Research, Journal of Advertising Research, and other leading journals. In 1973, Dr. Danko assisted Thomas J. Stanley with his first study of the affluent. Since then, he has collaborated with Dr. Stanley on numerous academic and consulting studies. Dr. Danko lives in upstate New York.
Thomas J. Stanley, Ph.D., is an author, lecturer, and researcher who has studied the affluent since 1973. His work is frequently cited in the national media. He is the author of Marketing to the Affluent, a best-selling book selected as one of ten outstanding business books in America by the editors of Best of Business Quarterly. Dr. Stanley was formerly a professor of marketing at Georgia State University, where he was named Omicron Delta Kappa Outstanding Professor, and was on the faculty of the University at Albany, State University of New York. He lives in Atlanta.
In The Millionaire Next Door, read by Cotter Smith, Stanley (Marketing to the Affluent) and Danko (marketing, SUNY at Albany) summarize findings from ...More at Bostic Media
The textbook, Millionaire Next Door : The Surprising Secrets of America's Wealthy, by Thomas J. Stanley and William D. Danko, available in Hardback. ...More at Textbooks.com
Epinions.com periodically updates pricing and product information from third-party sources, so some information may be slightly out-of-date. You should confirm all information before relying on it.
- Add to My Yahoo!: 
- Add to Google Homepage: 
© 1999-2009 Shopping.com, Inc.