The term "the millionaire next door" comes from the book The Millionaire Next Door: The Surprising Secrets of American’s Wealthy by Thomas J. Stanley and William D. Danko.
The book is based on the work of the two researches who interviewed millionaires to find out how they got rich and how they stayed that way.
The authors discovered that rich people are no different than everyday people, and in many cases, they don’t even separate themselves from the rest of the population.
This book eliminated the myth that rich people live extravagant lives.
If you want to become a millionaire, a good place to start would be to see how many of these millionaire traits you have…
The Next Millionaire?
I have always found the book The Millionaire Next Door to be intriguing, and lately I’ve become serious about living up to the ideals of the millionaire next door.
After all, they say if you take on the habits of something you want, you will bring it to fruition.
The funny thing, however, is that acting like the millionaire next door means adjusting my habits to be even more frugal and careful with money than I already am!
Millionaires don’t place importance on things like clothing and status symbols. According to a New York Times article, our view of what a millionaire looks like may be warped. In fact it is more likely that the person handling their money would be the person mistaken for a millionaire.
Millionaire Profile #1
According to the book, the typical millionaire…
- is about 57 years of age
- earns most of the family’s income
- is self-employed
- is involved in dull to normal businesses
- has an average household net worth of $3.7 million
- wife is a teacher
- stays in the same home for long periods of time
- tends to live in middle income neighborhoods
- lives well below their means
Most importantly, a millionaire has chosen to trade wealth for outward appearances of wealth.
Millionaire Profile #2
Here’s another interesting profile of a real millionaire next door. In this case, the neighbor is described as:
- A 71-year-old retired shop teacher
- Who lives in a modest ranch house on half an acre
- It’s the same house he’s had for over 40 years
- He has an old barn filled with salvaged lumber, outdated appliances, and who knows what else.
- He drives a junkie 25-year-old station wagon.
- He travels to New Zealand to help friends with a dairy farm, he fishes in Alaska, and he also rents his home out to boarders.
- He makes his own storm windows out of plastic
- He’s worth well over a million dollars.
- His most sage advice is never buy anything you don’t need. (I gather he means really really need.)
Would A Millionaire Do That?
Check out this list of 20 things the millionaire next door does not do.
Included on the list are:
- Renting — because millionaires think for the long term and owning something is always more cost-effective than renting it.
- Working for every dollar they make — because they know how to make a passive income stream that grows over time.
- Paying someone to mow the lawn — because it is good exercise and does a body good.
- Carrying a monthly credit card balance — because they don’t buy “stuff” right now that they cannot afford to pay for in cash right now.
More Interesting Things About Millionaires
I have been a certified tightwad striving for financial freedom since I became pregnant with my first child — and I decided to find a way to stay home with him full-time. I enjoy sharing my personal experiences in my journey back to financial health and planning for a future — which will include sending 2 kids to college and early retirement.