Book Review of The Millionaire Next Door

The Millionaire Next Door by Thomas J. Stanley and William D. Danko was an interesting but dry. Even though it was not an engaging book, I found the main theme was a basic business rule, or at least an accounting rule. When there is a net profit (in the black) the company or person is doing well. When there is a net loss (in the red) the company or person is doing poorly. To gain wealth a person needs to be fiscally responsible and be in the black.

If I want to be a millionaire then that person will have to be able to invest, live within the person’s means, and be able to save. It took a while for me to get used to one word they used “frugal”. At first I thought they were only going to use the idea to be a millionaire one needed to save. But once I realized that what they really meant was that a person needed to have a net profit in life to strive, I really got the message.

It was well worth the dryness for me. The authors treated the subject matter with a clinical research approach; it was an academic lecture, with case studies and 20 years of research. They did add a few examples from their own experiences. I can only think of one real example. This style and format makes sense as the authors are two teachers and have spent time doing marketing research on millionaires for companies.

There were no amusing antidotes and at times I had to stop listening to the audio book because I was falling asleep! I wonder, how much more if I read the book? Even with all that, the message was clear and the authors proved the point with many examples and from 20 years of research of millionaires.

I thought of people I love who (if they could get past the dryness) would learn some valid points for this book. So I’d have to give the book a B+ although I probably would not listen to it again; nor try and read the book. The most valuable lessons the book reiterated were reinvest in myself, learn from my mistakes, and know my own portfolio. This was not new for me but with the different format it clarified some ideas in my mind. If I had to choose the most important message in the book, it would be the one that was the most frequently reiterated: have a net profit in your own personal finance.