The (Millennial) Millionaire Next Door
I just finished rereading perhaps my favorite non-fiction book of all time now, at least on money, which is the 1996 book by Thomas J. Stanley titled The Millionaire Next Door: The Surprising Secrets of America’s Wealthy. To be transparent on the claim of this being my favorite non-fiction book of all-time, will mention that virtually all I read is non-fiction, business-related books. So in that respect, this is the best book I’ve ever read in that particular category.
I actually believe this book should be required reading for everyone. It doesn’t teach you how to budget or save, it simply opens your eyes to the world of money, income and wealth, and how they are related yet so different. Wealth is not superficial or materialistic and practically impossible to measure on the surface from any individual. But wealth, not income, truly defines who is financial free. And the book is backed by 40+ years of academic research from Dr. Thomas J. Stanley and his staff. Dr. Stanley setup to find who the wealthy truly are and their behavior and actions that set them apart.
One of my favorite terms used in The Millionaire Next Door is PAWs or Prodigious Accumulator of Wealth. These are the individuals and families who are very frugal, live well below their means, save aggressively and are not susceptible to the latest social trends. As the name Prodigious Accumulator of Wealth suggests, PAWs are remarkable savers, not spenders, regardless of their age and income.
How to become a Prodigious Accumulator of Wealth?
I am a Millennial and obviously started this blog to spread the word about budgeting, money management, retirement planning, and overall personal finance best practices for my Millennial generation. Again, this book is required reading for all on my Millennial readers out there because the lessons are truly invaluable and will set you up for financial freedom.
If you want to be financially free one day and achieve million dollar plus wealth status, I strongly suggest you follow the guidelines Dr. Thomas J. Stanley clearly lays out in his book The Millionaire Next Door: The Surprising Secrets of America’s Wealthy. The plan and path is simple, but the execution is anything but.
- Spend less than you earn
- Avoid leading a “status” lifestyle (and keeping up with the Joneses)
- Take financial risk if it is worth the reward (be very calculating)
- Avoid debt and spending tomorrow’s cash today
- Pass on these principles to your children and heirs
Millennials can easily achieve wealth and financial freedom if you’re disciplined. The beauty is we Millennials have time and the power of compounding interest on our side. And you don’t have to earn a high income. While a high income helps, it is not the overall driver to your wealth accumulation. Your saving and spending habits determine just how wealthy you will be.