My notes from reading The Millionaire Next Door
The Millionaire Next Door discusses simple spending and saving habits that can lead to more cash in the bank than most people earn in their lifetime while helping you avoid critical mistakes on one’s dream to become financially independent.
I’ve learned that becoming a millionaire is not rocket science, it is just a matter of planning well, living below one’s means, and avoiding needless spending.
The authors Stanley and Danko conducted substantial research and did extensive profiling of people who are defined as millionaires. Interestingly, findings from their research condemn the pop culture potrail of millionaires who spend lavishly as quite false and that most actual millionaires lead a quite simple lifestyle. They have conducted detailed interviews with these typical millionaires, dug deep into data, and presented statistics which allowed them to create a much more detailed picture of what it actually means to be a millionaire in today’s society.
Few simple rules that I wish to follow in order to improve my chances of ending up as a millionaire
- Save half of the income I earn responsibly and learn about investment opportunities
- Cultivate good spending habits and avoid spending cash on things that I don’t need.
- Budget consciously, setting up long-term financial goals, and living a frugal life is really what I need to build wealth.
- Spend the money for the quality of the product and not the brand image of the Product
- Try to get closer to your expected wealth over time by not saving excessively, but by avoiding spending too much.
- Spend my time, energy, and money efficiently and budget them
In conclusion, I realized that Money is a critical factor in stress and anxiety, it’s essential to engage with our finances at least 1hr per week without ignoring and hoping for the best.
Funnily, The Millionaire Next Door, made the author and his co-author millionaires, was published in 1996 and has sold over 3 million copies to date.