“The Millionaire Next Door” by William Danko and Thomas Stanley

  1. Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.
  2. Seven common denominators among those who successfully build wealth. They live well below their means. They allocate their time, energy, and money efficiently, in ways conducive to building wealth. They believe that financial independence is more important than displaying high social status. Their parents did not provide economic outpatient care. Their adult children are economically self-sufficient. They are proficient in targeting market opportunities. They chose the right occupation.
  3. Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be.
  4. It is easier to purchase products that denote superiority than to be actually superior in economic achievement.
  5. Small expenses become big expenses over time.
  6. People accumulate significant wealth by minimizing their realized/taxable income and maximizing their unrealized/nontaxable income.
  7. What you probably don’t know is that your neighbor in the $300,000 house next to yours bought his house only after he became wealthy. You bought yours in anticipation of becoming wealthy. That day may never come.
  8. Many professionals have told us that they must look successful to convince their customers/clients that they are.
  9. It is very difficult for a married couple to accumulate wealth if one is a spendthrift. A household divided in its financial orientation is unlikely to accumulate significant wealth.
  10. What is expected of children who are exposed to a household environment predicated upon very high consumption, few—if any—economic constraints, little planning or budgeting, no discipline, and pandering to every product-related desire?
  11. Berl and Susan were successful because their parents gave them something other than money. Each was the product of a disciplined home life.
  12. Whatever your income, always live below your means.
  13. In addition to an education, create an environment that honors independent thoughts and deeds, cherishes individual achievements, and rewards responsibility and leadership. Yes, the best things in life are often free.
  14. If you are wealthy and want your children to become happy and independent adults, minimize discussions and behavior that center on the topic of receiving other people’s money.
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