From The Millionaire Next Door

Two books, The Millionaire Next Door by Thomas J Stanley, Ph.D. and William D. Danko, Ph.D. and The Millionaire Mind, by Dr. Thomas J. Stanley provide surprising secrets and exquisite insights into the art and skill of becoming a millionaire.

In The Millionaire Next Door the authors found that for millionaires, wealth was more often the result of a lifestyle of hard work, perseverance, planning and most of all, self-discipline. They found that many people who live in expensive homes and drive luxury cars do not actually have much wealth. Many people who have a great deal of wealth do not even live in upscale neighborhoods. Many of the households in the United States with annual incomes in excess of $100,000 live from paycheck to paycheck. The authors made the point that, “Wealth is not the same as income." If you make a good income each year and spend it all, you are not getting wealthier. You are living high. Wealth is what you accumulate, not what you spend. On average the millionaires next door invest nearly 20% of their household income each year - most of them invested at least 15%.

Some other fascinating insights gained from The Millionaire Next Door about the prototypical American millionaire were that:

Only a minority of them drive the current model year automobile.

Only a minority lease their car.

Most of their wives are planners and meticulous budgeters.
As a group, they believe that education is extremely    important for themselves, their children and their grandchildren.

They spend heavily for the education of their offspring.

As a group, they feel that their daughters are financially handicapped in comparison to their sons who have the deck of economic cards stacked in their favor.

In summary, the prototypical American millionaires would classify themselves as “A Tightwad.”

In The Millionaire Mind, Dr. Stanley sorted out those who were "balance-sheet" millionaires and those who simply lived an affluent lifestyle while burdened with debt. Balance-sheet millionaires tended to own their homes without a mortgage, while those who merely lived a wealthy lifestyle carried jumbo loans. Millionaires with assets between $2 million and $5 million live, on average, in homes that are valued at $355,000 (based on the Internal Revenue Service database figures).

The millionaires in his survey tend to have started businesses, and have built their wealth by finding a profitable niche. They tend to love what they do and are motivated by building the business, not by building wealth. They live comfortable lifestyles, but are not wasteful. Most of the millionaires in the survey reported they buy expensive shoes, but almost all have them resoled. For the most part, they remain married to supportive and responsible spouses who run economically productive households -- from clipping coupons to buying household supplies in bulk. Millionaires spend less than they earn.

When it comes to investments, these millionaires look to the stock market primarily as a place to grow capital once their businesses have matured. They are not speculators in the markets, rarely visit a casino and almost never buy lottery tickets. Most of the millionaires were not at the tops of their classes in school, nor did they score the highest on their SATs. Many were only average students, or had been told by their teachers that they'd never succeed. As a result, they developed a determination and resilience that helped them in business, and they learned to compensate for lack of academic skill by learning leadership through other means, such as through sports. Millionaires think differently from the crowd, and they have a strong belief in themselves.

In both The Millionaire Next Door and The Millionaire Mind we find that persistence and dedication with a vision to coming out ahead in the long run are universal attributes of the millionaire.

Did You Know - from The Millionaire Next Door 

Prices Paid by Millionaires for Clothing and Accessories:
Suit of Clothing = $399.00
Pair of Shoes = $140.00
Wristwatch = $235.00

Millionaire Cars:
Spent for Latest Model Purchased = $24,800
Most Amount Ever Spent for Motor Vehicle = $29,00