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Millionaire Next Door Book Summary



Is it true that most millionaires live a lavish lifestyle? with private jets, luxury cars, and large mansions. Or is it all fantasy? The truth is far from this. Most millionaires in America actually live what others would consider to be normal lives. What's more interesting, is that living modestly is what made them a millionaire in the first place. In this book called, The Millionaire Next Door, Thomas Stanley gives us very helpful insights into how typical millionaires live their lives. In this summary, I share with you three key lessons that we can learn from millionaires that can help us join their club.



The key lesson #1: Many millionaires don't live the high life.


If you were a millionaire, you wouldn't hesitate to wear Rolex and buy luxury cars. Right? But despite the stereotype, many actual millionaires buy fewer expensive items and they are happy doing so. If you want to become a millionaire, you should start saving more. Most of the self-made millionaires became rich by saving their monthly earning and not wasting it on stuff that they didn't actually need. This is a very simple rule that you can also use to become a millionaire without actually making a million dollars a year. Millionaires spend a lot of their time on budgeting and long term planning. A survey of millionaires found that for every hundred millionaires who weren't budgeting and thinking about their financial future, there are 120 millionaires who certainly were. Budgeting is key if you want to become a millionaire. To start, set a goal, first put some money aside for investment and then budget your living costs.


The key lesson #2: True millionaires focus more on financial independence rather than social status.


Many real millionaires are more interested in financial independence than owning a luxury car. Financial independence plays an important role in well-being and happiness. But what does it mean to be financially independent? If you can continue the lifestyle you have for at least three years without having to work, then you are financially independent. Many people can picture the common millionaire, the big hat no cattle type. A person who looks like a rich rancher but doesn't actually own any cattle. They drive luxury cars but earn average incomes. And even if they earn a decent income they struggle to accumulate wealth. In other words, these millionaires don't have as much money as you'd expect because they focus on social status to just look rich.


The key lesson #3: Millionaires invest in what they know.


How do millionaires choose what to invest in? For example, Mr. Smith is an auctioneer who specializes in commercial real estate. which industries should he invest in? Commercial real estate, of course. Because he knows that he should stick to what he knows best. Millionaires also spend a great amount of time planning investments and often reap more benefits from them than those who neglect to plan. And, although these millionaires are often frugal in other respects, price is not an issue to budgeting investment services, getting tax advice, or spending on medical care. They buy products and services that improve their businesses and invest in specific businesses that have some expertise.


So to summarize, the typical millionaire isn’t who we've seen on TV shows. Many live well below their means saving and budgeting money diligently and spending it intelligently. If you follow these simple rules, you too could become a millionaire.




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