Book Summary: The Millionaire Next Door by Thomas J. Stanley

Quick Summary: The central message of this book is that the average millionaire is not all glitz and glamor from the silver screen. Many of them live far below their means, investing carefully, budgeting their resources, and using them wisely. You too can become a millionaire if you follow these basic rules regularly.

The Millionaire Next Door reminds you that you too can follow in the footsteps of many millionaires if you are dedicated and smart enough to manage your money well.

In this book, you’ll learn why the man who drives a Bentley actually makes less money than you; when you can start investing money; and why lazy kids get the biggest piece of their millionaire parents’ pie.

You don’t have to read the whole book if you don’t have time. This summary will provide you with an overview of everything you can learn from this book.

Without further ado, let’s get started.

Key Takeaways

  • Many millionaires do not enjoy a life in luxury. To retain their wealth, they budget carefully.
  • True millionaires place a high value on financial security than on noticeable status
  • Millionaires know how to invest their money and where to put it. Invest in something you are already familiar with.
  • Many millionaires, even though it may be a hindrance, share their money with their kids.
  • The children who are the most dependent on their parents get the greatest portion of the family inheritance.

The Millionaire Next Door Book Summary


Rich people are ostentatious. Their lives are glamorous ones, with private jets and luxury cars, hidden away in enormous mansions in Hollywood’s exclusive hills.

Is all of that fantasy? Truth is far from the bling and bright lights. In America, many millionaires enjoy what most people would consider a normal lifestyle. Interestingly, however, it was because they lived modestly that they became millionaires.

The author of this book shows you that if you plan your finances correctly and are dedicated, you, too, can follow in the footsteps of many successful millionaires.

Lesson 1: The lives of many millionaires are not glamorous. To remain wealthy, they budget wisely.

If you were a millionaire, you would wear Prada and drink Champagne every day for breakfast, right? Many real millionaires do not purchase as many expensive items as you do – and they are satisfied with this.

You need to learn to save responsibly when you first begin earning more than you need to live on if you want to become a millionaire.

Many self-made millionaires have modest backgrounds and have built wealth by saving their earnings and not spending money on unnecessary items. Using this simple rule, you can also become a millionaire, even if you don’t make a million dollars per year.

Affluence and budget control allows people to become millionaires. They’re also very good at predicting the future and planning for it.

In a survey of millionaires, 120 millionaires out of 100 were thinking about their financial future and budgeting.

A millionaire’s success depends on planning and structuring expenses. Invest in retirement by setting a goal, such as saving a certain amount of money. Then plan your expenses as well as your investment goals.

Mrs. and Mr. Rule are both millionaires, and they aim to retire financially independent. They intend to save $5 million by this time.

The couple makes this happen by strategically allocating their time and money in a way that allows them to invest in their business and earn and save funds that can be used for real estate purchases and home renovations.

Lesson 2: Millionaires prioritize financial independence over social standing.

Millionaires in real life are more concerned about financial independence than accumulating Rolls-Royce luxury cars.

The ability to manage finances independently plays a critical role in well-being. Among people of the same income bracket, people who are financially independent are happier.

How do you become financially independent? When you retire, you should be able to continue living the way you do now and to survive a future financial crisis.

Those who are financially secure are clear about future goals, which enables them to organize their household budget according to their priorities.

Let’s review the Rule family again. Mrs. Rule is happy and financially comfortable. Even if she is injured physically, she will never be dependent on anyone financially. Her grandchildren are even in a position to put money away for college one day, something she hopes for them.

A prototypical millionaire in the United States is often pictured as a big-hat-no-cattle person – someone who looks like a rancher but doesn’t own any cattle. Their car is usually a luxury model, but they make an average wage. It is difficult for them to accumulate wealth even if they earn a decent income.

These millionaires are not as rich as you might expect. In order to calculate the expected wealth of a person, multiply the person’s age by the household income before taxes divided by ten.

Mr. Friend, for example, earned $221,000 a year. Mr. Friend, who is 48 years old, should have a net worth of $1,060,800 if he multiplies 48 by 221,000 and then divides by ten.

Friend’s net worth is below $260,000 because he squandered his money on luxury goods. He is not a millionaire! In fact, he is a big-hat-no-cattle type, also known as an underaccumulator of wealth.

His value isn’t as high as it should be.

Lesson 3: Money is spent wisely by millionaires. They invest in what they know!

How do millionaires decide what to invest in? Smart millionaires know that spending money on medical care for their families and investing in ways to make a business more productive is the way to go.

These millionaires may be stingy in other ways, but when it comes to investing, getting tax advice, or paying for medical care for themselves and their families, price is not an issue.

The same goes for the products and services they buy to improve their businesses, such as additional office space or computer software.

Consider Mr. South, a millionaire. According to him, a Rolls Royce would be unattractive in his low-middle-class neighborhood because it would draw too much attention. To him, paying for his grandchildren’s dental care is a far better use of his money.

Spending smartly also means planning smartly. Millionaires devote more time to planning investments, and as a result, they reap more benefits from them than those who do not.

Furthermore, if you’re considering investing in specific companies to increase your wealth, you’ll need a strategy as well as some expertise. If you have considerable knowledge in at least one area, you can leverage this to your advantage when investing.

In Mrs. Smith’s case, she is an auctioneer with a focus on commercial real estate. Which industry would be the best fit for her? Commercial real estate.

However, Mr. Long is an expert in antique furniture. Would it be wise for him to invest in high-tech securities? He should probably stick to what he knows.

Lesson 4: Millionaires often share their wealth with their children, even if it hinders them in the long run.

What about the children of millionaires? We’ve seen how millionaires live.

Many millionaire parents don’t provide much financial support to their children.

Many millionaires are thrifty, but they pay a great deal for economic outpatient care. Thus, they are able to provide their children with monthly cash gifts, pay for medical treatments and education, and so on.

However, the more money affluent parents’ children receive, the less they save, and the reverse is true as well.

Some millionaires cause their adult children to become financially dependent by supporting them financially and hamper their ability to budget intelligently.

Did you know that 46% of wealthy Americans give at least $15,000 in gifts or cash each year to their adult children?

As an example, Mary receives $15,000 annually from her parents since she is married. They live in a great neighborhood, own expensive cars, belong to a country club, and are involved in numerous non-profits.

Even though they look like millionaires from the outside, they have never earned more than $60,000.

Your children’s purchasing behaviors are also influenced by the amount of money you spend and save. Children who emulate their parents’ financial habits learn the do’s and don’ts to invest and purchase.

Spend wisely and invest wisely to teach your children!

John, for example, is an under-accumulator of wealth (UAW). His parents used to shop on Saturdays every week so he has a habit of buying designer clothes whenever he receives a paycheck. John has a similar behavior as his parents.

Lesson 5: The children who are most financially dependent receive the most inheritance.

Who will inherit your money after you die? A lot of millionaires claim their children will inherit it equally. In reality, some inherit it more than others.

One such group is housewives. Millionaires and affluent parents recognize that women earn less than men, so they pass on more money to their daughters. Particularly housewives who were “daddy’s girl” growing up or didn’t finish college. It is much more likely that they will receive a substantial inheritance.

Alice has always been her father’s favorite. When her father found out she was marrying someone who earned only a modest income and quit school to take care of her two daughters, he began an economic outpatient program to prevent her from living in a house that didn’t fit his upper-class image.

The majority of cash gifts and inheritances go to non-working adult children, as well as women who stay at home.

Millionaire’s children are often unemployed or “professional students” who have never worked, choosing to spend their entire lives studying instead. They are considered to need more financial support than their more independent siblings.

Many cash gifts come from over-funded college savings accounts, which were no longer needed when a student quits school.

Paul and Peter are brothers and the children of a millionaire couple. As Paul became an entrepreneur and moved far from home, he became financially independent and refused cash from his parents.

While Peter graduated from college and wasn’t looking for a full-time job, he returned to his parents’ house after college. As a result, his parents now give him cash for housing, food, clothing, and transportation.

Therefore, it is not surprising that the financially dependent Peter received an inheritance after their parents died.

Final Summary

Millionaires aren’t just Hollywood stars. Saving and budgeting money diligently and spending it intelligently is how many people live below their means. You too can become a millionaire if you follow these standards consistently.

One piece of advice you should take to heart: Money looks better in a bank account than in yours! Whether you get a bonus or a raise in the future, fight the urge to buy a shiny new product or a fashionable piece of clothing. Save the capital and be amazed at how quickly it grows in your savings account.

More reading tips: T. Harv Eker’s Secrets of the Millionaire Mind. Secrets of the Millionaire Mind reveals how people naturally form static behaviors and behavioral habits in their approach to money that they learned from their parents.

It also shows how these attitudes and patterns can determine potential success. It outlines the primary drive norms and thought processes that millionaires follow and that someone who wants to become wealthy should follow.

About The Author

Thomas J. Stanley is a researcher and author of award-winning books on the wealthy, such as Millionaire Women Next Door, Marketing to the Affluent, and Selling to the Affluent.

Professor William D. Danko teaches marketing at the School of Business at the State University of New York at Albany.


“If your goal is to become financially secure, you’ll likely attain it…. But if your motive is to make money to spend money on the good life,… you’re never gonna make it.”


“Have you ever noticed those people whom you see jogging day after day? They are the ones who seem not to need to jog. But that’s why they are fit. Those who are wealthy work at staying financially fit. But those who are not financially fit do little to change their status.”


“Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.”


“One of the reasons that millionaires are economically successful is that they think differently.”


“Most people will never become wealthy in one generation if they are married to people who are wasteful. A couple cannot accumulate wealth if one of its members is a hyperconsumer.”

View our larger collection of the best Millionaire Next Door quotes.

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