How does one earn the title of wealthy? Authors Dr. Thomas J. Stanley and Dr. William D. Danko have studied how people become wealthy for over twenty years. They have conducted research, written books, conducted seminars, and advised major corporations on whom the wealthy are and what are the characteristics of the affluent in America. The research for The Millionaire Next Door was comprised of personal, as well as focus group interviews, with more than 500 millionaires. A survey of 1,115 high net worth and/ or high income respondents was also compiled. The authors define the threshold for being wealthy as having a net worth of $1 million or more. This is one distinction that the authors make in comparison to what most Americans might perceive is the definition of wealth. As opposed to what most Americans in our society believe, a measure of an individual’s material possessions does not necessarily equate to being wealthy. According to the authors, wealth is what you accumulate and not what you spend. Based on the author’s definition of wealth, only 3.5% of American households meet their criteria for status as a millionaire. Of this small percentage, 95% of millionaires have a net worth between $1 million and $10 million. The authors chose to focus on this segment of millionaires because this level of wealth can be attained in one generation and by many Americans. The characteristics of the affluent researched in the book share seven common traits that have helped them achieve financial success: 1.They live below their means.
2.They allocate their time, energy, and money efficiently, in ways conducive to building wealth. 3.They believe that financial independence is more important than displaying high social status. 4.Their parents did not provide economic outpatient care.
5.Their adult children are economically self-sufficient.
6.They are proficient in targeting market opportunities.
7.They chose the right...