In their world, PAWs are rich (even if they only have a net worth of $400k) and UAWs are poor even if they live the high life, subsidised by their parents or credit.
The key to being ‘rich’ (under their definition) is to live substantially below your means. They then compare the extremes, 'Prodigious Accumulators of Wealth' (PAWs) with ‘Under Accumulators of Wealth' (UAWs). Their ‘wealth equation’ - age*gross annual income /10 - allows the authors to calculate an 'expected net worth' for individuals and thus determine whether a person is an accumulator (net worth > than estimate) or a spender (net worth < than estimate). Thomas Stanley and William Danko set out a clear definition and analysis of what wealthy means, in their eyes. This does not mean that it is not a fascinating piece of work, though I imagine it will not appeal to everyone. The two authors have done vast amounts of thoughtful research into the spending patterns of affluent Americans, and the book often sounds like a market research report.
There is no hairy fairness, although I am a big fan of the self help section, it will give you an honest reflection on the types of wealthy people, their purchasing and investing strategies.Ī fascinating analysis of a rather niche topic You buy flashy things for yourself, but really it is for others. Was there a moment in the book that particularly moved you? My favourite line: Int: "What is your favourite charity to donate to?" Millionaire: "I am my favourite charity." Rich Dad, Poor Dad as it educates you on similar subjects such as Assets & Liabilities and sometimes our own enthusiasm to purchase the bigger, flasher things in life often hinder our opportunity to be financially free. What other book might you compare The Millionaire Next Door to, and why? I recommend this book, but don't expect it to tell you to buy a Bugatti, because it certainly will not! It is simple book which will help you with purchases, independence, saving, investing & mind-set around money. It's based upon real life examples, and true advice. My interpretation of this book is that it will help you identify what is good for you in the long-term, even in the mind-set and education of your children.
Yes, it's fundamental message is built on upon long-term financial success, recognising what millionaire really is and it is not a yacht. Would you listen to The Millionaire Next Door again? Why? Helps you realise long-term success for yourself
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