Money
by Thomas Stanley and William Danko
What does a millionaire look like?
Picture a millionaire and you probably see a big house and a new German car. Thomas Stanley and William Danko spent years surveying Americans worth over a million dollars. Most looked nothing like that, and many of the people who did look like that owned very little.
Hear a sample · read by Laura
The authors borrow a Texan saying for people who look rich and aren't. A big income spent on a big house and smart cars looks like wealth from the street. Wealth is what you've kept, and the people with the most of it rarely show it.
Stanley and Danko's rule of thumb is to multiply your age by your household's yearly income before tax, then divide by ten. Worth twice that or more, you're a prodigious accumulator of wealth, a PAW. Worth half or less, you're an under accumulator, a UAW.
It's a chapter title, and the book's main finding. The millionaires lived well below their means, in ordinary houses, and knew what their households spent. Many ran unglamorous businesses, such as welding or pest control. Most had built the money themselves, and hadn't inherited it.
Another chapter title. Most of the millionaires surveyed drove ordinary, older cars, and few paid top prices for them. Heavy spending on cars, clothes and watches turned up far more often among high earners who weren't wealthy at all.
The authors' name for money that parents give their grown children, year after year. They found that adult children who received it tended to build less wealth than those who didn't. The gifts paid for spending, and made standing on their own harder.
Hidden rich
Most millionaires look ordinary. They live in modest homes and don't dress to impress.
Wealth formula
Multiply your age by your yearly income and divide by ten. That's roughly what you should be worth.
Big hat
Plenty of people with big houses and fancy cars have little saved. Big hat, no cattle.
Thrift
Real savers know where their money goes and care more about saving than looking rich.
Cars
Millionaires tend to buy sensible cars, often second-hand, and keep them for years.
One thing to try
Multiply your age by your household's yearly income before tax, and divide by ten. Then add up what you own and take away what you owe. Compare the two numbers, and write down one spending habit that keeps the second one down.
Knotd has the key ideas from 250+ non-fiction books, each in a few minutes, in plain words. The Millionaire Next Door comes with a Name That Idea round and a Spot the Trap case to make it stick.
Get the whole book on KnotdOpen in the appWhat does a millionaire look like? Picture a millionaire and you probably see a big house and a new German car. Thomas Stanley and William Danko spent years surveying Americans worth over a million dollars. Most looked nothing like that, and many of the people who did look like that owned very little.
Big hat, no cattle; What you should be worth; Frugal, frugal, frugal; You aren't what you drive; Economic outpatient care.
Multiply your age by your household's yearly income before tax, and divide by ten. Then add up what you own and take away what you owe. Compare the two numbers, and write down one spending habit that keeps the second one down.
Yes. Knotd has the key ideas from The Millionaire Next Door in a few minutes, in plain words, plus a Name That Idea round and a Spot the Trap case to test them. It's one of 250+ non-fiction books in the app.
