Submitted by Moller Financial Services on April 13th, 2015

Sadly one of the co-authors of The Millionaire Next Door was killed in an automobile accident this last March. While most people probably are not familiar with the name Thomas Stanley, millions have read the book he co-wrote with William Danko in 1996. The book was on the New York Times best seller list for over a year and reading it had a significant impact on me personally and professionally.



I graduated from the University of Iowa in December 1995 and after a brief stint as the Chicago land area’s worst waiter, began my career in financial services. I started working for a small financial planning company that focused on real estate investing for clients. My job title was “Property Maintenance Manager” and I was responsible for overseeing the maintenance department for over 600 rental units in the northwest suburbs. After a few months on the job one of the main things that struck me was the appearance of, along with my perception of, not only many of our clients but also the firm’s owners. While I could see from their balance sheets that these people were wealthy, they didn’t appear to me as what I thought “rich” people would be. Missing were the luxury cars, finely tailored suits, flashy watches, and trophy wives; all things at age 22 I assumed were the primary benefits of being wealthy!



The premise of The Millionaire Next Door was to look at wealth in America and determine who the millionaires actually are and what traits and habits they shared. After reading the book it dawned on me that becoming wealthy typically wasn’t the result of being born with a silver spoon in your mouth, but rather discipline, planning, and making smart financial decisions. Almost immediately I enrolled in classes to become a Certified Financial Planner™ and developed a passion for showing others that being successful financially was within their reach. I would like to share what the authors found to be some common traits among millionaires, all of which create a lifestyle “conducive to accumulating money”.

They live well below their means.While this may seem obvious to many, I feel it is the most single important trait to develop, especially early on. After almost 20 years in the business it has become pretty easy for me to identify if people have a good likelihood of becoming financially independent. It is almost always a function of what they earn relative to what they spend. I have met with very high income earning doctors, attorneys, etc. who appear to be wealthy by looking at their tax return. However, after looking a little closer I find that their lifestyle closely mirrors their income. While they don’t necessarily have a lot of consumer debt, they often save very little compared to what they earn and spend the majority of their income on luxury items and “keeping up with the Joneses”. In contrast, Stanley and Danko found that millionaires live well below their means. The majority spend less that $200 on shoes and buy American made cars. In fact, the most popular vehicle among the millionaires studied was a Ford F150 pickup. They also found that about two-thirds of millionaires follow a household budget. They allocate their time, energy and money efficiently, in ways conducive to building wealth.For example, millionaires spend time developing and managing a financial plan so they know their savings goals and monitor their progress towards retirement or college funding. In contrast, the vast majority of Americans spend much more time planning their annual vacation or researching their next car purchase then they do looking at their finances. They believe that financial independence is more important than displaying high social status.“They inoculate themselves from heavy spending by constantly reminding themselves that many people who have high-status artifacts, such as expensive clothing, jewelry, cars, and pools, have little wealth,” the authors wrote. The realize the importance of cutting the cord.Millionaires rarely become wealthy on their own if their parents are constantly financing their lives. They also believe their own children should be self-sufficient. The ability to continually fall back on family for financial matters leads to a lifetime of dependency and poor financial habits. They enjoy what they do and feel education is important.Most millionaires become so as a result of their own hard work.Many are business owners and most enjoy what they do and have a passion for getting up and going to work each day. Their careers also tend to be built around providing goods or services which target other wealthy individuals. Interestingly enough, the majority of millionaires with families do not encourage their children to follow in their footsteps. Instead, they feel obtaining higher education is important and are much more likely to send their children on to college in order to obtain advanced degrees.

While The Millionaire Next Door is now almost twenty years old and somewhat dated, I believe the main points Thomas Stanley and William Danko make in the book hold true today. It encourages a view that real wealth isn’t typically the result of some extraordinary circumstance or investment strategy. Rather it is attainable for most individuals as long as they are willing to develop and adhere to a few common traits “conducive to accumulating money.”