The Wealthy Chapter 2 Summary

When Authors Tom Stanley and William Danko set out to investigate on how people get wealthy across America, they found something odd. Many people who live in upscale neighborhoods and drive luxurious cars do not have extreme wealth. The allusion of wealth happens a lot and many people are unaware of the true meaning of wealth. Many people who have great wealth do not live in upscale neighborhoods. This book examines ways to become wealthy and how wealth is not what you spend but what you accumulate. The millionaires in this book are financially independent and are categorized based on seven findings and areas of observations found by Stanley and Danko.
The authors define wealthy differently than most Americans. Most Americans describe wealthy
Frugal is defined as “behavior characterized by actions reflecting economic conditions when using resources.” Being wasteful and unconcerned with consumption are two components that contradict being frugal. Stanley and Danko believe being frugal is the cornerstone of wealthy. Lavish spending and lifestyle can be seen from the public eye as means of wealth because they show immediate gratification. However, the average millionaire is well into his or her 50s, has been married to the same person, and lives in a middle class neighborhood. They spend money modestly and avoid buying a pair of shoes that cost $500 even though they can afford them. Millionaires become “millionaires” because of budgeting and controlling expenses, and they maintain their affluent status the same
EOC is practiced by more than 46% of affluent people in America. Children of wealthy who sit around and wait for their next gift are not typically very productive. In contrast the more wealth a parent accumulates the more economically disciplined their adult children are likely to be. Having financially independent children are a key to maintaining wealth. Being able to continue to build income while limiting financial support to others will support a strong financial