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The Millionaire Next Door
The Surprising Secrets of America’s Wealthy
- Read in 10 minutes
- Audio & text available
- Contains 6 key ideas
Drawing from personal interviews, The Millionaire Next Door (1996) reveals that many millionaires’ daily lives are a far cry from the stereotype of luxury cars, mansions and private jets. Yet this book also disproves the belief that becoming a millionaire is difficult – anyone can learn not only how to become rich but also stay rich.
Key idea 1 of 6
Many millionaires don’t live the high life. They budget wisely to maintain their affluence.
If you were a millionaire, you wouldn’t hesitate to wear Prada and drink Champagne every day for breakfast, right? But despite the stereotypes, many actual millionaires purchase fewer expensive items than you do – and they are happy doing so.
If you want to become a millionaire, you’ve got to learn to save responsibly at the moment when you first start to earn more money than you need to live on.
The majority of self-made millionaires have modest backgrounds and achieved great wealth by saving their monthly earnings and avoiding spending cash on stuff they didn’t need. This simple rule is one way you too could become a millionaire, without ever actually making a million dollars a year.
People become millionaires by controlling their budget and maintaining their affluence in the same way. They’re also practiced at thinking long term and planning for the future.
A survey of millionaires found that for every 100 millionaires who weren't budgeting and thinking about their financial future, there were 120 millionaires who certainly were.
Planning and structuring expenses is key if you want to become a millionaire. To start, set a goal, such as having a certain amount of cash tucked away for retirement. Then budget your expenses, living costs and investments.
Mrs. and Mr. Rule are millionaires, and their main goal is to be financially independent when they’re ready to retire. By this time, they want to have saved some $5 million.
To make this happen, the couple cleverly allocates their time and money so that they can continue to invest in their business while earning and saving money that can be used toward real estate purchases or home renovation projects.