The Millionaire Next Door is a book written by Thomas J. Stanley and was published in 1996. It has sold over 3 million copies to date. This book will show you how to develop basic spending and saving habits. It will leave you with more money in the bank than the majority of people make in a lifetime. You will be avoiding costly mistakes on your journey to financial freedom.
According to Stanley, it’s not difficult to become a millionaire. It’s just a matter of careful planning. And also living within your means, and avoiding a few costly mistakes.
You can improve your chances of ending up with a million dollars by following these rules.
From the minute you begin earning more than you require to live, you must save responsibly.
Most people believe that earning at least $1 million per year for a few years is the only way to become a millionaire. Even if you’re one of the world’s wealthiest people, taxes will gobble up nearly half of your annual income. After living expenses, a mortgage, and a few trips, you could only have $200,000 left in your bank account. That is if you are lucky.
To generate wealth, all you need is good budgeting and a thrifty lifestyle. Around 55% of all millionaires attribute their riches to being careful with their money. They were also disciplined in saving.
Use this easy equation to see whether you’re not making the most of your money.
Stanley has come up with a simple formula to calculate your expected wealth:
Multiply your age with your pre-tax annual income and divide by 10.
This figure, whatever it is, represents how wealthy you could be right now. That is if you’ve already developed good spending habits. Over time, try to get closer to your predicted wealth. You can do that by avoiding overspending rather than saving excessively.
Don’t fall for economic outpatient care to see your bank account go to seven figures.
Do you know how children of wealthy parents struggle with money? And how they never have to worry about spending?
That is the goal of economic outpatient care (EOC). Most affluent parents support their children with their hard-earned money. And they mean well. But it really harms their capacity to manage money.
Almost half of all wealthy Americans fund their children and grandchildren with more than $15k per year. It allows them to live the lifestyles they desire while not being able to pay them.
If your parents are wealthy, don’t waste their money; at the very least, invest it properly! If you are a wealthy parent, don’t spoil your children; it won’t benefit them.
About the Author
Image Source: Author Thomas Stanley…
- Thomas J. Stanley (1944 – February 28, 2015) was an American writer and business theorist. He was the author and co-author of several award-winning books on America’s wealthy. That includes the New York Times’ bestsellers The Millionaire Next Door and The Millionaire Mind.
- He served as the chief advisor to Data Points, a company founded based on his research and data.
- He received a doctorate in business administration from the University of Georgia.
- He was on the faculty of the University at Albany, State University of New York. He taught marketing at the University of Tennessee, University of Georgia and Georgia State University. At Georgia State University, he was named Omicron Delta Kappa’s Outstanding Professor.
- Stanley spent most of his career studying how the financially successful Americans in a wide range of professions and with a varying level of income acquired their wealth on their own.
- In 2015 he was killed by a drunk driver at the age of 71.
- During his last days, he was working on a book with his daughter. She is an industrial psychologist, who later finished it. The book is called The Next Millionaire Next Door: Enduring Strategies for Building Wealth. It attributes authorship to Thomas J. Stanley and his daughter, Sarah Stanley Fallaw.
Source: Thomas J. Stanley From Wikipedia, The Free Encyclopedia
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Books by the Author
- Marketing to the Affluent, McGraw-Hill, 1988, ISBN 0-07-061047-9
- Selling to the Affluent, McGraw-Hill, 1991, ISBN 0-07-061049-5
- Networking with the Affluent and Their Advisors, McGraw-Hill, 1993, ISBN 0-07-061048-7
- The Millionaire Next Door, Longstreet Press, 1996, ISBN 978-1-56352-330-4
- The Millionaire Mind, Andrews McMeel Publishing, LLC, 2000 ISBN 0-7407-1858-4
- Millionaire Women Next Door, Andrews McMeel Publishing, LLC, 2004, ISBN 0-7407-4532-8
- Stop Acting Rich: And Start Living Like A Real Millionaire, John Wiley & Sons, Inc, 2009, ISBN 0-470-48255-9