What do you think of when you hear the word millionaire? Do you envision fancy cars, expensive attire, sparkly jewelry, an elaborate mansion? I know I did, that is until I read the book “The Millionaire Next Door” by Thomas J. Stanley and William D. Danko. Did you know that your typical millionaire may be living in your neighborhood or sitting at the next table over in your favorite family restaurant? The book is based on in-depth interviews and research of American millionaires and how they are able to stay wealthy by being frugal and not overspend.
“American society’s expectations are not congruent with the reality of most American millionaires”, is directly quoted from the book, and is something I agree with wholeheartedly. Before reading this book just from its title I thought it was going to be about how an average person became a millionaire and now how much different their life is. Boy was I wrong. The whole purpose of this book was to help people understand that to be wealthy does not mean you drive fancy cars or dress lavishly, but to be smart with your money and make that money grow by NOT spending and living sensibly. There are three categories of wealth accumulation illustrated in this book and they are PAW, or prodigious accumulator of wealth, UAW, or under accumulator of wealth, and AAW, or average accumulator of wealth. The two emphasized in the book are PAW and UAW, to be a PAW you are in the top percentile of wealth accumulation and to be a UAW, you are in the bottom percentile. Your typical millionaire is very frugal, and will not excessively overspend. The big difference between PAWs and UAWs is their environment as a child and their parent’s spending habits. PAWs usually come from family that believed in budgeting and being frugal. UAWs usually “learn that hyper spending is the main reward for becoming affluent in America” and therefore lower their total net worth. Let me ask you, do you think that these millionaires became...
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