Book Review: The Millionaire Next Door

So it turns out that one of the things I really care about in life is finances.  Not because I'm in debt, or because I want to be really rich someday.  Rather, I've witnessed firsthand the debilitating life situation of those who don't understand how to be responsible with money.  It leads to heartbreak and sorrow, and drives away peace.  Because of what I've seen, I am meticulous with my money.  I have kept a budget of every dollar I've spent since I was 17 years old, and I price watch like nobody's business.  I have never been in debt or borrowed money, and I never plan to.  In many regards this is because I have been incredibly blessed- I attended University largely on scholarships, and I have been blessed with good employment.  But this is also largely due to how I live- below my means.  I recognize the important difference between wants and needs, and I treat them as such.

But I also realized that I wanted to learn more.  I've never taken a finance class, and when it comes to the research, I really knew very little.  So, after a financial seminar with some women in my ward, I headed over to the Provo Library and checked out The Millionaire Next Door: The Surprising Secrets of America's Wealthy, written by Thomas J. Stanley and William D. Danko.  It was an excellent read.

The book is based on a boatload of legitimate research done by these two fine scholars (and the help of many others), so if you're interested I suggest reading the whole book.  There are ample graphs, charts, and stats to ensure any skeptical statistician of their sound methods.  But for my purposes, I just want to discuss the main point of the book:

Most of the truly wealthy people in America live well below their means.

Truly wealthy people become that way because of hard work.  They scrimp and save.  They are meticulously frugal.  They budget.  They live in middle-class neighborhoods in houses much cheaper than we would expect.  They dress like middle-class, blue-collar workers.  They rarely buy new vehicles, and they almost never lease.  They teach their children the value of hard work.  They invest.  Often, no one but themselves knows that they are actually wealthy.  They are frugal in most things, with the notable exceptions of education and financial planning advice.  

And you know what I love about that?  We can do all of those things.  We can be frugal.  We can set aside money for a rainy day instead of inflating our standard of living to our increasing paycheck.  We can resist the urge to keep up with the Jones' and only purchase what we really need- and only when we really need it.

Basically, I really enjoyed the message of this book.  I think it's one we can all take to heart, and something we've been counseled to do by prophets and apostles for decades.  Now that the research is in, maybe our country can learn, from the bottom up, how to live within our means and find financial peace.