The Millionaire Next Door, simply put, is an extensive examination of wealth and the wealthy in America told by Thomas J. Stanley and William D. Danko.
It takes its bearing from the fact that the millionaires of America aren’t just the ones we see on TV as Fortune 500 executives or renowned public figures. They are regular people who live… well, next door.
Call them the invisible rich.
Growing up, did you ever have a friend at school who seemed to be the same as you – the same school, lived in the same neighbourhood, and because of that, your parents became friends with theirs?
Then one Saturday, you go to their house for a visit and you realize, “Damn, they’re rich!” Big house with a pool and a vast backyard, housekeepers, family pictures in beach houses, and a collection of souvenirs from the 37 countries they have gone to for vacation over the years.
Yep! These are the people this book talks about. They are everyday people who have built wealth over the years through diligence, delayed gratification, and informed investments, and now have a good life for themselves and their families, well-prepared for retirement.
5 wealth-building facts
Here are 5 wealth-building facts about these millionaires next door, and tips you can take from them:
1. They pick the right career field
Earning potentials differ based on different fields, even amongst jobs that require similar education and training. The millionaire next door chooses a career path that has long-term earning potential.
It may not seem like much of a big deal, but I reckon that there are way too many things already to worry about. Making decisions to ensure that your job goes extinct in the near future is not one of them.
2. They live below their means
This is one of the tips I always preach, but it may sound different coming from Stanley and Danko. The millionaire next door is frugal and strategic in spending. Living below your means does not always have to be cutthroat – it can be painless once you get used to it.
Having automated savings and investment plans really helps with this. This way, a specified amount of money is deducted and saved for you securely, and you only get to spend what is left. With time you get used to it.
Create one now and start saving.
3. Avid planners? 100%
The millionaire next door is not a get-today-spend-tomorrow type of person. Planning is a key part of their strategy. From understanding their risk appetite to knowing how much they should set aside for emergencies, planning is second nature to them.
This is because life happens, and at any point, an unforeseen event can occur that takes one back to a financial square one. The millionaire’s mindset is to have backup and backup of the backup. That way, you’re always two steps ahead.
4. They started investing early
The returns they enjoy today are from investments made a long time ago. Return on investment does not happen in a day. Slow wealth is sustainable, and thanks to the gods of compounding, investing is a surefire way to becoming the millionaire next door.
The best time to start investing was yesterday, and the next best time is now. Not later. Now.
Learn more about Why Investing Early Is Important.
5. They don’t care for status symbols
I’ll paraphrase what Morgan Housel said in his book “Psychology of Money”: spending money to prove that you have money is the easiest way to have no money.
Read it again.
Remember that a status symbol is exactly that – a symbol. It doesn’t prove anything. Real wealth isn’t always visible in material possessions, which is the entire premise of this book.
So, basically…
There are more millionaires around you than you realize, and if you want to join them, you have to study them, understand their habits, adjust your mindset and take necessary action.
This book “The Millionaire Next Door” is more than just a narration of millionaire facts and habits. It’s an eye-opener that attaining wealth is possible, so you now have permission to start building generational wealth on your terms.
Start today. Start now.
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Good evening, can I get an explicit illustration of how much to invest, how much is the interest rate and for how many days or duration to earn such interest.
Thank you in anticipation of your response.
Ibrahim Muhammad T.
Hi Ibrahim,
You can invest any amount.
Mutual Funds work differently depending on the type you invest in, we have them categorized by risk level.
Please find out more here – http://cowrywise.com/mutual-funds
With conservative mutual funds, you earn based on annual interest. While with the other fund categories – moderate and aggressive – you earn based on capital gains.
There are no fixed interest rates as they change daily, depending on the performance of the market.
We advise you to invest for the long-term so that your investments can yield above-average returns over time.
I don’t recommend any one to invest in any mutual funds on Cowrywise because the interest rate is not even up to 1% it is extremely low. I invested 10000 naira and am getting 1naira everyday as ROI, So after 30days my total ROI would 30naira
is still better than keeping your money in the bank or how much do you think bank will give you?, this is not a quick rich scheme.
Hi Wilfred,
Thank you for your comment. However, this is inaccurate information.
Some funds were performing lower than usual due to market performance, however, not all funds were performing at 1%.
Some were much higher and please remember that we always advise thinking in the long-term.
Mutual Funds work differently depending on the type you invest in, we have them categorized by risk level.
If it’s a conservative fund, you earn based on interest. Interest rates for conservative funds are not fixed, it changes daily.
The other fund categories: moderate and aggressive earn based on capital gains which also changes daily.
This means that performance can be low today and high tomorrow.
If you’re investing for the long-term, more often than not, your investments will yield above-average returns despite the highs and lows of the market.
Good evening, please I need details of how I can invest and what is the interest rate. Also the duration of the investment.