The Millionaire Next Door: The Surprising Secrets of America's Wealthy

Rating:
Summary: Should be required reading
Review: This look into America's wealthy is enlightening and motivating in ways I did not anticipate. The authors point out that your neighbor who drives a Lexus and lives in a large home in a high priced neighborhood is likely to be house poor and as poor a manager of money as someone who can't afford to buy a home.

This book stresses the importance of frugality and instilling strong money management in your children instead of providing high priced items and homes for them. More importantly, it stresses that it is possible to change the way you spend and save money and that you can change your economic future.

This book gives hope to the everyday person and illustrates that it is not essential to make over six figures in order to retire as a wealthy person. The little guy can make it and retire a millionaire. This book should be required reading for every college student and young adult.

Rating:
Summary: The Capitalist Exploiter Leech Next Door
Review: I travel a great deal as an academician, and am constantly fascinated by the choices of books that are to be found at airport bookstores. Of course, these sell mostly magazines, but always there are a selection of what I understand are known in the West as "self-help management books" by wealthy bourgeois business men who are either nefarious corporate leaders or so-called self-made "entrepreneurs." These books beckon to grey-suited passers-by like Odysseyan Sirens, "Buy me, and you too can be an obscenely wealthy exploiter of the working class" or "Buy me, and you too can be a greedy Kulak leech without contributing a kopeck of labour value!" These books seemingly do very well, especially judging their inflated price.

So it is with this text, "The Millionaire Next Door." Given the present exuberant and wasteful excess of the Western consumer markets, this book appears at first glance to swim against the river by counseling the reader to save and live within means, an old fashion idea not inconsistent with S. N. Narpov's influential text, "Pig Iron Production in the Ural District Under the Fourth Five Year Plan." This book directly lead to the creation of the impeccable modern Soviet pension program for iron workers which was, tragically, allowed to be case aside by the Menshevik roader Gorbachev. But I digress...

The error of "Millionaire" is, like most books of its ilk, it refuses all recognition of the class problem. You Americans are absorbed with the great capitalist myth, "Every man a king." You seem to believe that by dint of hard work and thrift, the golden road is open to anyone for entry into the exalted money class. An example should suffice. Several years ago I attended a conference in your Dallas, Texas, sponsored by a local college and entitled, "Marxian Inerrancy - Problem or Panacea?" I was invited by several colleagues to attend - what you call it - a cowboy bar. We began there a lively discussion of class-consciousness among the American working class.

To prove a point, I approached a large gentleman standing near a pool table, who was large (almost two meters, and over 110 kilograms), with a beard, long hair and some tattoos including an American flag. To me, there was no question as to his class. I told him, "You, sir, are clearly a Peasant. Why do you and your friends not identify with the interests of the Peasant class?" Unfortunately, he indicated he was unwilling to engage in an academic discussion of this important question, instead threatening me with a pool cue while suggesting that either I perform unnatural acts with relatives, or that I was the product of one. My friends quickly hustled me away from the establishment and cautioned me against unauthorized and unchaparoned discussions with ordinary American workers...

The mind set of American peasants and workers is indeed hard to penetrate. So too, the attraction of such illusory fluff as "Millionaire" and its fetishist devotion to a gospel of moral wealth. While you are pinching pennies, corporate giants are looting your labour value. Save, and the banks earn interest off the sweat of your hard work. These ideas were false in 1905 when enunciated by aristocratic apologists such as the railroad theoretician Sporov, and are just as false today. Do not be deceived. This is the false path to workers paradise.

Rating:
Summary: Well written but somewhat boring
Review: Before everyone kills me, let me say, I think this book is good. The only problem that I have with it is that it (and The Millionaire Mind) gets so bogged down with statistical information that I had a hard time finishing it. It is an interesting read in regards to the people that it is written about; the average drink beer from a can, own a small business, pay cash instead of finance, millionaires that people see everyday and don't realize it. It offers hope and a great perspective that financial intelligence and some will power goes along way towards long term security. I just felt that there was a lot of information overload in the text.

Rating:
Summary: Grab Your Notepad & Surrender!
Review: This is very good information if practiced. I have not been able to stop listening. I am now buying the book for easier note taking.

If you do not like change DO NOT READ!

This is all about mindset, and discipline. If you are willing, you to can join the select few who have achieved millonaire status.

You will learn though that status is exactly the oppitsite to becoming a millionaire.

Rating:
Summary: Good in debunking the myth behind millionaires, but...
Review: It was interesting to learn that the people with high net worth were not generally those who look that way -- according to the surveys the authors conducted, wealthy people were most often those who didn't appear wealthy. The secret of their high net worth, the authors contend, is that they are PAWs ("Prodigious Accumulators of Wealth"), or in other words frugal, those who save or invest a much higher percentage of their income compared to the rate they consume. The authors even go ahead to redefine what it is to be wealthy. Congruent to the results of their study, "wealthy" people are exactly those who continue to accumulate no matter what their income, and are not those who currently possess much but do not accumulate. Though simple at first sight, I found their new definition to be useful, and this much I can say that I have gained from the book.

However the lesson I mentioned I learnt is just about everything the book offers. There is no so to say royal way to make money other than being frugal, evading tax as much as one can, and allocating as much time and energy to financial planning as possible, the authors claim. Perhaps this is the reason why the second chapters on appear redundant. The car example the authors quote repeatedly throughout the book is typical in this regard. It was indeed interesting to learn that the Ford pickup model was the most popular (and not some conspicuous foreign made high performance car) among the millionaires surveyed, but calculating the cost per pound of a good fraction of the cars currently available in the market? The very first time the authors wrote about "you aren't what you drive," I got the message. It would have been much more educational if the authors instead included a study on the distribution of the industries those millionaires worked in (there is a such list at the end of the book, but no distribution statistics).

Speaking of examples, I found some statistical results curious. For instance, in a early chapter of the book where the authors present a study on the ancestry groups of the millionaires surveyed (to ultimately claim that millionaires are mostly self-made) I could not find data for Afro Americans, Hispanics, or Asians. It is plausible that these ethnic groups (representing 28%+ of US population as of 2000) were not included because they did not have high percentage of millionaires per ethnic household and the table presented contained only the top ten in this measure. But recent studies of net worth stratified by ethnicity (for e.g. studies by L. Hao of Johns Hopkins Univ.) indicate Asian immigrants having higher median net worth compared to other US immigrant ethnic groups including Whites. Could it be that the majority of Asians are UAWs (the opposite of PAWs -- "Under Accumulators of Wealth")? As for a glaring omission. The authors assert that an overwhelming majority of millionaires they surveyed were self-employed. This much I am able to believe in good faith. But what exactly is the ratio between self-employed and not (for e.g. physicians, lawyers, engineers etc)? Wouldn't this ratio be more meaningful than including the types of credit cards those millionaires hold?

The strength of this book compared to others in the same category is in that the authors conducted real field work. Some results were revealing, but as noted earlier, many of them were redundant. It would be interesting to read a volume on the same subject that does not try too hard to appeal to the general public.

Rating:
Summary: Of sociological interest, but causality is not well explored
Review: Much of what is said in this book should be fairly intuitive to most.

The authors explain that millionaires tend to be first generation wealthy, very frugal, and self-employed. The book also goes on to describe where they live, what they drive, how much they spend on various consumer goods, whether they're married or not, the number of children they have, etc.

Although the data presented is interesting, it does not paint an entirely convincing picture of the factors that make a millionaire. The fact that millionaires are usually self-employed, or married, or drive chevys does not explain the millions of self-employed or married individuals, or those that drive chevys that are NOT millionaires.

It would have been interesting if the authors had gone into the data in more depth. That being said, I do think it's a worthwhile read, and do recommend it.

Rating:
Summary: Not for me
Review: When I set out to work hard so many years ago, it was because I wanted to live in a beautiful home and be able to buy stuff. I did not want the severe restrictions of poverty that I had endured as a kid. Now that I have made a decent income, why should I choose to live otherwise?

The point of education is lost. Although I cannot, yet, live very long in my current lifestyle if I lost my income (yes, in small part because of student loans), the fact I have a good education means I could find another job tomorrow that would enable me to do so. Since I hit the work force, I've been offered every job for which I interviewed (but have chosen to stay where I am). I have ample disability insurance if something awful should happen.

So, now that I can buy what I could not buy before, I'll go right on my merry way and do so (when the desire strikes, anyway). For me, it has nothing to do with keeping up with the Jones - I drive a Honda- but because I always wanted to live in a beautiful home - and now I do. Everytime I pull in my driveway I smile and think "this made the day worth it." Giving my husband a Harley for Christmas (and to charity) gave me more joy than any net worth could.

Also, no one has ever explained to me, why, if I did lose my level of income, I couldn't just at that point live in squalor - as per the book's directive? It would feel like defeat, but so would having an income but not having anything I really wanted.