SavvyKids & Millionaires Next Door

the-millionaire-next-doorBook: The Millionaire Next Door (1996).  One of the first books I read when I started on the road to financial freedom. In The Millionaire Next Door, authors Thomas J. Stanley and William D. Danko summarize findings from their research into the key characteristics that explain how individuals became wealthy, defined as those with a net worth of at least $1 million.

As might be expected, their results reveal qualities of this group that stand in stark contrast to the earn-and-consume behaviors embraced by most. The wealthy employ principles such as wisely choosing their professions, eschewing conspicuous consumption, living below their means, and being proficient in targeting marketing opportunities.

The authors make clear that anyone can become wealthy, provided they are disciplined in their approach and determined to persist in their efforts.  While some of the examples may be a tad outdated, as the book was originally published nearly 20 years ago, the overarching principles to acquiring wealth remain the same.

Website: Money As You GrowThe site was born as an initiative from the President’s Advisory Council on Financial Capability (PACFC), which was created by Executive Order 13530, signed by President Barack Obama on January 29, 2010.  Its charter is to advise the President on promoting and enhancing financial literacy and capability among the American people.  Moreover, one of the key objectives of the PACFC is to find ways to improve the financial capability of young Americans.

Money As You Grow

To that end, the site highlights “20 Things Kids Need to Know to Live Financially Smart Lives” and supports those ideas with activities spread across five age groups (3-5, 6-10, 11-13, 14-18, 18+).  Parents and Grandparents can use the site to start a dialogue about money and teach kids important lessons about saving, making smart financial decisions, and avoiding debt.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

17 Comments

  1. Both The Millionaire Mind & The Millionaire Next Door remain two of my favorite books. I also love “Stop Acting Rich”. Books that dispel myths concerning the definition of wealth & the accumulation of wealth are always a hit with me.

  2. James,
    This book was influential for me as well. I already understood the concepts of saving and compounding, but the book proved to me at a young age that this would be my path to wealth. I do remember it dragging on a bit. Too many examples explaining the same concepts. But overall a very important retirement book.
    -RBD

    • Agreed, RBD. While some of the examples are a tad dated and as you note, it drags at times, it is still a very important book and my go to recommendation for someone just getting started that expresses a desire to become wealthy.

  3. Thanks for the mention James! I appreciate it. 🙂

  4. “The Millionaire Next Door” is the book I have heard so much about but never got a chance to read. I think it is a great source of information for those who want to achieve financial success.

    • It really is a very powerful book that illustrates that most of acquiring wealth is largely a simple process: live below your means and adopt certain behaviors. Thanks for taking the time to stop by, Elena, and hope to see you back here soon.

  5. These are two excellent resources that you have highlighted, James.

    As a teacher, I will find Money As You Go a good reference for financial literacy during the coming year for my students.

    The Millionaire Next Door is one of my favourite financial books of all time. It is fun to read and very informative.

    You have made two good recommendations here. Keep them coming.

    • I have been heartily recommending the Money as You Grow site since I found out about it a couple of weeks ago. A great resource for parents and grandparents. In fact, I just had dinner with some friends tonight who are talking about passing the site on to their children/grandchildren. I have been recommending The Millionaire Next Door since I first read it years ago. Generally I plan to publish Recommendations on Fridays. Keep an eye out for them and thanks for the visit.

  6. It is always good to teach our kids about finance in an early age. This can definitely help them to handle the finance more responsibly in their future. Had we got good financial training from our parents, we would not have committed such mistakes and struggle to correct it

    • Absolutely, Rita. While I have managed to land on my feet and am very comfortable with the fiscal foundation that I have built, there were a lot of stupid mistakes along the way that probably would not have been committed with some personal finance literacy education earlier in life. I believe we owe it to ourselves and future generations to give them the tools, at an earlier age, to build their fiscal foundations. Thanks for stopping by.

  7. Great article. You’re right, it’s never too soon to learn how to handle money responsibly. Have you also read Rich Habits by Tom Corley? It illustrates habits used by every-day people.
    Looking forward to the next article.

    • Thanks for the comments, Edie. The earlier that fiscal foundation is built the better. While I feel like I got an earlier start than most – my early 30s – in getting my fiscal house in order, an earlier financial literacy education would have been great. I have not read the book; however, I will certainly check it out.

  8. Hi James
    Great post – the millionaire next door is a great book, i enjoyed reading it.
    However, no matter how much you tell kids, most of them will still make the same mistakes that we do.

    • Mike, Thanks for stopping by and the comment. Absolutely agree that The Millionaire Next Door is a great book, one of the first I read when I became interested in personal finance and retirement planning. There is no doubt that kids will make mistakes, with money and otherwise; however they are more likely to make fewer and recover faster when they do, if they have established a foundation of knowledge.

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