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Recommendation: “The Millionaire Next Door” by Thomas J. Stanley and William Di Danko

Author: Itay Gal
The Millionaire Next Door

The main assumption facing readers of Stanley and Danko’s wonderful book, which later became a kind of “beginner’s guide” to the millionaire, is that the modern perception of a rich man as we are used to seeing on television and to a social extent is completely wrong. Did you know that most millionaires never spend more than $800 for a watch? A tenth of them never spent more than 200 shekels on it!

When we imagine millionaires, we think of celebrities, entrepreneurs, tech industry people and, more recently, young hedonists on Instagram. Stanley and Danko teach us time and time again that this perception is light years away from reality. In this book, the authors present us with a study they conducted over two decades in which you questioned large groups of millionaires across the United States. Surveys, database analyses and focus groups were carried out to study the ways in which these wealthy people built and maintained their vast wealth. Surprisingly, most millionaires in the U.S. seem to have built their fortunes thanks to traits like aggressive savings, modesty, and sophisticated time management.

By gathering the information, the writers try to extract a profile of the average millionaire. Stanley and Danko laid out the chapters of the book according to the seven traits that they were able to isolate. These traits define modern millionaires, or as they call them, “successful hoarders” (PAWs):

  1. Living their lives modestly far below their means
  2. Manage their time and capital more efficiently
  3. Do not tend to purchase luxury cars
  4. Never enjoyed financial subsidies by their parents and family
  5. Their adult children show financial independence
  6. They are good at finding profitable opportunities
  7. They choose a successful career

The book teaches us and even gives us hope that by maintaining a standard of living below our means, frugality, and wise economic planning, any average person can certainly achieve respectable personal wealth and financial independence. The book is a huge critique of mainstream financial consciousness and encourages people to create a long-term economic plan and stick to it.

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