I finished reading “The Millionaire Next Door” earlier this week, and let the ideas set in for a few days before I started writing about it.
First, let me say that, yes, the ideas in the book are not really anything new, and the book was published in 1996.
I liked understanding the difference between being a high-income earner and being financially secure. Being a high-income earner often means that you have to put on a show of sorts and display your status in life. Not having a high-status job can actually be to your benefit, especially if you can save and invest well.
I appreciated being reminded of this, because my profession and my husband’s are not what anyone would consider high-status. Nobody will ever expect us to have a huge house or drive expensive cars. We don’t make enough to be taxed all that much. We are both happy to have jobs and work hard at them, and we are thankful we don’t live paycheck to paycheck.
I also liked understanding that someone can be an under-accumulator of wealth (UAW) or a prodigious accumulator of wealth (PAW), and that there is not a set dollar amount to be considered a PAW, but rather, it’s a formula. Right now, I am definitely a UAW, but I also spent seven years earning two degrees in order to do my job. I know that this investment of time and money was worth it because I am not an entrepreneurial type, and not a business person by far. I am more like the professor than the contractor. By age 40, I hope to have this turned around and be a PAW.
The reminder that goals in life do not have to be attached to owning material goods is a healthy one. I place a high value on time spent with family, education, seeing and learning new things when I travel, and none of these can ever be taken away from me if I file bankruptcy and my assets are liquidated. Though, I think I’d probably miss my XBox.
Overall, I’d say this book is worth a read. You can skim a lot of it, but I think the abundance of examples help drive home the authors’ many points about financial stability vs. appearances of wealth.