There’s many more lessons in the book but I wanted to mention some of the biggest takeaways for me. One of the key takeaways of this book for me is many millionaires attributed their dedication to financial planning as a requirement of doing business.īecause their business finances and personal finances are so closely intertwined, they really have no choice but to consistently examine their finances in order to survive - and thrive. Not everyone that gets rich owns their own businesses.īut in The Millionaire Next Door, they discovered a lot of folks who ran their own service businesses such as landscapers, plumbers, electricians, commercial cleaners and so on. They own their own business or work for themselves. Each week, each month, each year, they plan their investments.”Ħ. In their survey of 854 middle-income workers, the authors found a strong correlation between investment planning and wealth accumulation citing “Most prodigious accumulators of wealth have a regimented planning schedule. You don’t have to earn a big six-figure salary to accumulate wealth, as long as you plan for it. The wealthy spend a lot of time budgeting, goal setting and managing their portfolios.Īccording to Danko and Stanley, the wealthy spend nearly twice as many hours per month managing their finances as those without wealth. They spend a lot of time managing their money. They then work from the remaining funds.īut the majority do take the time to budget, even if they don’t want to, because the know the long-term benefits first-hand.ĥ. The majority of millionaires stick to a budget.Įven among those who don’t budget, they pay themselves first with money directly to their savings and investment accounts. It means you are turning small contributions into large sums over time. In its simplest form, that’s really all wealth is earning more than you spend and investing the difference - consistently.Ĭonsistently investing means you are fully capitalizing on compounding interest. But clearly this is an area the middle class can improve inĬompare that negative savings rate to that of the average millionaire, who invests nearly 20% of their income. Now, we all know saving money to acquire wealth is not a secret. Which brings us back to your original question What are the secrets only the wealthy now and the middle class is unaware of?
The savings rate has improved but is still only 5% currently. In America, our average household savings rate dipped into the negative in 2005, for the first time since the Great Depression. They buy it with cash, or make payments until they own it, and ultimately hold on to the car for at least a decade.įorbes backs this up, stating 61% of those earning at least $250,000 a year are driving Honda, Toyota, Acura and Volkswagens. If you add up all the money you’ve spent on cars over the years it can be really eye-opening.Įven if you’re young, the amount you’ve spent on cars compared to how much money you’ve earned is usually pretty high.Īccording to their survey results, most real millionaires buy a nice car, like an Acura or Lexus. The authors point out that cars are the second biggest material expense in our lifetime. Some are living paycheck to paycheck, heavily in debt with little or no savings.Ĭonversely, real millionaires usually live in middle class neighborhoods, drive cars they own outright, and don’t spend extravagantly on material things.Ģ. They spend more than they can afford on symbols of wealth but have modest portfolios. People who look rich may not actually be rich. The wealthy don’t always look wealthy and vice-versa. The authors surveyed thousands of real millionaires and their answers revealed many surprising lessons, such as:ġ.
The Millionaire Next Door: The Surprising Secrets of America’s Wealthy You know that plumber who lives on your street and drives the beat up pickup truck? He’s much more likely to be a millionaire than the executive next door driving the BMW.ĭon’t believe me? Well that was a common theme found in The Millionaire Next Door:The Surprising Secrets of America’s Wealthy by William Danko and Thomas Stanley.
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