- Influential study of personal wealth creation that's still relevant nearly 20 years later.
- Highly readable and insightful.
- Contains useful lessons for managing your own finances, and those of clients.
- Not a career management or job finding handbook.
- Analysis is based on interviews rather than a study of macro data.
- Interviewees' wealth is largely self-reported, without independent verification.
- Presented as a series of case studies.
- Based on interviews with wealthy people.
- Top conclusions: business ownership and frugality are the principal means for becoming wealthy.
The Millionaire Next Door is a highly readable condensation of the authors' studies in personal wealth creation. It is presented as a series of case studies, drawn from interviews conducted by the authors, that illustrate the personal strategies and personality types that correlate with the amassing of personal fortunes.
The major thesis of the book is that accumulating great wealth is more a function of frugal spending habits (that is, living well below one's means) than of high income. An ancillary thesis is that ownership of one's own business is a surer ticket to wealth than is working as someone else's employee. Indeed, the authors conclude that owning a "dirty fingernail business" that involves manual labor is a more likely path to wealth than is a position as a white-collar employee, even a highly-paid one.
While these theses are somewhat controversial, they do correlate rather well with my own experience, both in the financial services industry and in other spheres. In short, I have seen copious instances of how lower-income people with strong propensities to save can accumulate far greater wealth than high-income people with strong propensities to spend.
In sum, The Millionaire Next Door is worthwhile reading both for business strategists and marketing people in the financial services industry. Additionally, financial advisors and financial planners can gain some useful insights both regarding where to search for clients, and how to advise clients. Lastly, it is useful reading from the standpoint of managing your own finances, especially regarding the accumulation of the proper habits for wealth creation.
