HackerNews Readings
40,000 HackerNews book recommendations identified using NLP and deep learning

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The Soul of A New Machine

Tracy Kidder

4.6 on Amazon

177 HN comments

A Pattern Language: Towns, Buildings, Construction (Center for Environmental Structure Series)

Christopher Alexander , Sara Ishikawa , et al.

4.7 on Amazon

176 HN comments

Meditations: A New Translation

Marcus Aurelius and Gregory Hays

4.8 on Amazon

172 HN comments

The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

Clayton M. Christensen, L.J. Ganser, et al.

4.5 on Amazon

168 HN comments

The Millionaire Next Door: The Surprising Secrets of America's Wealthy

Thomas J. Stanley and William D. Danko

4.6 on Amazon

166 HN comments

Infinite Jest: Part I With a Foreword by Dave Eggers

Sean Pratt, David Foster Wallace, et al.

4.3 on Amazon

166 HN comments

The Elements of Style: Annotated Edition

William Strunk Jr. and James McGill

4.7 on Amazon

155 HN comments

Outliers: The Story of Success

Malcolm Gladwell

4.7 on Amazon

152 HN comments

A Guide to the Good Life: The Ancient Art of Stoic Joy

William B. Irvine

4.6 on Amazon

151 HN comments

Amusing Ourselves to Death: Public Discourse in the Age of Show Business

Neil Postman and Andrew Postman

4.6 on Amazon

151 HN comments

Stranger in a Strange Land

Robert A. Heinlein, Christopher Hurt, et al.

4.4 on Amazon

151 HN comments

Antifragile: Things That Gain from Disorder

Nassim Nicholas Taleb, Joe Ochman, et al.

4.5 on Amazon

150 HN comments

The Power of Habit: Why We Do What We Do in Life and Business

Charles Duhigg, Mike Chamberlain, et al.

4.6 on Amazon

149 HN comments

The Righteous Mind: Why Good People Are Divided by Politics and Religion

Jonathan Haidt and Gildan Media, LLC

4.6 on Amazon

144 HN comments

Getting to Yes: Negotiating Agreement Without Giving In

Roger Fisher , William L. Ury, et al.

4.6 on Amazon

143 HN comments

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Sorted by relevance

lukegoonOct 15, 2019

This joke is only funny for people who haven't read The Millionaire Next Door :)

bennysomethingonApr 18, 2021

The book the millionaire next door goes into great depth and detail about what the majority of millionaires spend money on. A lot of the people driving mercs are not rich. Most have bought their cars using lease schemes which is a really expensive way to own a car you can't afford

WalterBrightonSep 29, 2017

> [Citation needed]

See "The Millionaire Next Door" by Stanley

It stands to reason that if wealthy people as a group are bad at investing, they'd sooner or later stop being wealthy. Then, by survivorship bias, the wealthy ones remaining were good at investing.

WalterBrightonJan 23, 2015

Unsaid in the article: 1. 85% of America's millionaires are self-made ("The Millionaire Next Door" by Stanley) 2. there's never been more free opportunities for self-education, from the Khan Academy to MIT lectures free online.

gratononSep 9, 2019

Reminds me of the book, "The Millionaire Next Door". Seems like many of the people who have accumulated wealth tend to be fairly frugal.

_cbb1onMar 25, 2014

Napoleon Hill's "Think and Grow Rich" is great. I would also recommend Dr. Thomas Stanley's book "The Millionaire Next Door" to this list.

FloopsyonOct 2, 2012

The Millionaire Next Door: The Surprising Secrets of America's Wealthy by Thomas Stanley

icedchaionJan 12, 2018

I'm pretty sure the parent was being sarcastic.

"The Millionaire Next Door" should be required reading in high school. It has all you need to know about living below your means, building wealth slowly and consistently.

thecage411onMay 6, 2013

It's been awhile since I read Fooled by Randomness but I think Taleb's point was that TMND only looks at those who became rich, it doesn't look at those who didn't get rich following the same strategy.

I haven't read TMND so I can't say if that's true, but your post doesn't refute his point.

marknutteronJan 17, 2013

I've been reading a book called The Millionaire Next Door (http://www.amazon.com/The-Millionaire-Next-Door-ebook/dp/B00...) and it talks about how people get rich and stay rich, and it has more to do with not-spending money than it does making lots of money.

jumbopapaonApr 4, 2019

Great recommendation! Also read The Millionaire Next Door if you want to get into the right mindset.

happyscrappyonJan 23, 2015

>1. 85% of America's millionaires are self-made ("The Millionaire Next Door" by Stanley) 2. there's never been more free opportunities for self-education, from the Khan Academy to MIT lectures free online.

If those were mentioned in the article he would not have much of an article would he?

jseligeronFeb 1, 2020

If you want a fine take on this subject, and one that is much better than the comments so far, read The Millionaire Next Door. https://www.amazon.com/Millionaire-Next-Door-Surprising-Amer...

WalterBrightonJan 26, 2020

> I haven't seen anyone who got rich simply by investing in stocks

I know quite a few. You can read about more in the book "The Millionaire Next Door" by Stanley.

Heck, anyone who bought AMZN, MSFT, AAPL at the opening price, and held, is a wealthy person today.

WalterBrightonMar 12, 2017

See the book "The Millionaire Next Door" about how ordinary people with ordinary incomes get rich. It is not about being smart or lucky.

icedchaionAug 2, 2019

Obviously you need to plan ahead, perhaps read some personal finance books now and then. "The Millionaire Next Door" is still relevant. I read it when I was 22, followed most of it...

bovermyeronJan 2, 2018

Rich Dad, Poor Dad is really terrible advice. There are much better books on personal finance that don't give misleading or outright illegal advice. The Millionaire Next Door is a good one.

retroafromanonOct 10, 2010

I'm surprised that no one has cited that there was already a book just like this called "The Millionaire Next Door" which was all about pointing out how the millionaires don't act like we expect "rich" people to. It originally came out in 1998. This seems like a rehash.

WalterBrightonSep 3, 2016

As a counterpoint, there has never been an era where more people have risen to great wealth so quickly as today.

Also, 85% of American millionaires are self-made (not inherited). See the book "The Millionaire Next Door".

lukejduncanonMay 16, 2019

Isn't this the premise of books like "The Millionaire Next Door"?

Edit: Whelp -- not sure how I missed the link.

IridescentBlueonDec 31, 2012

Personally, I prefer the book Millionaire Next Door. Helped me develop some effective money saving ideas: http://www.amazon.com/The-Millionaire-Next-Door-Surprising/d...

rjstonJuly 9, 2015

Some good books to get you started:

* the smartest investment book you'll ever read

* the four pillars of investing

* The Millionaire Next Door

* If You Can

drpgqonJune 6, 2015

The Millionaire Next Door is a good read related to this although it is getting a bid dated.

mi100haelonJune 7, 2018

Another good, well-known book on the subject is the Millionaire Next Door: https://en.wikipedia.org/wiki/The_Millionaire_Next_Door

gbacononDec 18, 2017

Read the chapter “Economic Outpatient Care” in Thomas Stanley’s The Millionaire Next Door to learn how poorly on average American millionaires pass to their children the skills necessary to build wealth.

gbacononDec 18, 2017

I encourage you to read The Millionaire Next Door by Thomas Stanley because it will disabuse you of these and many other prejudices.

icedchaionJan 13, 2020

Yes, more tech folks should read "The Millionaire Next Door."

icedchaionDec 30, 2020

"The Millionaire Next Door" should be required reading in high school.

icedchaionJune 2, 2021

Yep. Too bad very few people figure this out in time. "The Millionaire Next Door" should be required reading in high school.

icedchaionDec 17, 2019

Yep. "The Millionaire Next Door" should be required reading for high school students.

gbacononDec 18, 2017

How then is it possible that some four in five American millionaires inherited no more than ten thousand dollars, according to The Millionaire Next Door by Thomas Stanley?

maxeronFeb 8, 2012

i find a similar but very much better book is "the millionaire next door" which shows the traits of an average millionaire

WalterBrightonNov 29, 2020

> if you are from rich family

Yes, rich people have it easier. There is no path for your life to be better by complaining that life is unfair. You could vaporize all the rich people, and it still wouldn't make your life any better (and would likely make it worse).

The good news, however, is you don't have to be born rich to become rich in a free market country. Lots of people do it - 85% of American millionaires are self-made. There's even a book about it and how ordinary people become wealthy - "The Millionaire Next Door".

mark_l_watsononFeb 4, 2020

I read the book The Millionaire Next Door over a decade ago. It changed my views on properly handling wealth/assets. Collecting wealth to impress other people is a loser move, but all too common.

patrickg-zillonJune 2, 2009

The Millionaire Next Door was somewhat interesting. However the follow-on book, "The Millionaire Mind" was packed with statistics instead of anecdotes and for me at least, had a number of ideas and changes to my perspective to offer.

maireonDec 17, 2019

So the funny thing is this article is the exact opposite of the two most influential financial books in my life: "The Millionaire Next Door" and "Rich Dad Poor Dad". The true wealthy don't ever think of spending money as if it isn't important. Instead they distinguish between spending on income generation vs spending on luxury. They only spend on luxury intentionally but will spend on income generation freely.

In other words, if someone is frivolously spending their money on luxuries they are very definitely not wealthy. They only want to appear wealthy. The true wealthy really don't look wealthy. They never really leave level 1 on the chart.

benj111onOct 5, 2019

How do they get the $20m to start with?

If they're earning $1m/pa but spending $1.1m they may look outwardly wealthy, but aren't really. Contrast that with the person who also earns $1m/pa but only spends $500k. They're the wealthy ones, and also probably the ones with the smaller house, cheaper car, and $20m in the bank.

If you 'just forget' about bills, that suggests to me a personality that is worse with money rather than better, ie the type of person likely to spend on material goods rather than spending wealth.

Book recommendation: The Millionaire Next Door.

btillyonJune 10, 2015

Find a copy of The Millionaire Next Door and read it. Particularly the last third about what happens inside of families where the parents have money.

Long story short, the "one big mistake in life" quote is exactly right.

dawg-onFeb 26, 2021

Do "successful" people in fact read more? It might be true, it certainly sounds good. But I don't know if we can so easily make that assumption. I recall a section of "The Millionaire Next Door" where most of the people interviewed chalked up their success to some combination of "Luck" and "Hard Work". Education was a bit lower on the list, and I don't remember anything about reading in one's spare time.

WalterBrightonOct 13, 2017

> And if I didn't have the money to buy that stock?

But you do.

> the Walton kids most assuredly got something for nothing.

85% of American millionaires are self-made. See "The Millionaire Next Door" by Stanley.

gk1onApr 21, 2017

You may like reading The Millionaire Next Door. It explains that the majority of millionaires in the US are like those you describe, and not like the flashy movie ones we see in the media.

Edit: Link for convenience: https://www.amazon.com/Millionaire-Next-Door-Surprising-Amer...

claudiulodroonJuly 28, 2020

I agree. Good data about the nuances around this seems tricky to find. In addition to reading The Millionaire Next Door a long time ago, I just did a little further research and found:

> A 2017 survey from Fidelity Investments found that 88 percent of millionaires are self-made.[1]

I'm not sure if there's anything super motivational about knowing that most millionaires are professionals near retirement age, though. :)

[1] https://money.usnews.com/money/blogs/on-retirement/articles/...

GlideonJune 8, 2011

I would definitely take a look at "The Millionaire Next Door". It contains some of the statistics that you're looking for.

That book really made me evaluate what I am spending money on.

1-6onMay 6, 2021

'The Millionaire Next Door: The Surprising Secrets of America's Wealthy', the author of this book has also pulled together data to show that wealthy families usually end extending financial life-lines to their children. It's not surprising that most wealthy neighborhoods are inhabited with people who are the first generation to become rich sprinkled with a few wealthy inheritors but most of the time the wealth stops with them.

agottereronJuly 4, 2009

Check out "The Millionaire Mind" and "The Millionaire Next Door". The book isn't really about how to become rich. More about the mind set a millionaire has to get rich and stay rich.



zthrowawayonMar 30, 2021

> "Wealth is accumulated through habits" is a great story to tell people but it seems very often to be complete BS.

I'm surprised this hasn't been mentioned yet, but I encourage you to dig more into financial independence, and how living more frugally can help you save more money to invest in the right ways to generate wealth. There's plenty of books on these habits, "The Millionaire Next Door", and even some popular communities that attest to it such as https://www.mrmoneymustache.com/.

You don't need to be rich to generate wealth, but it takes sacrifice (like everything in life), or even habits to get there.

danielweberonFeb 10, 2013

It's been many years since I've read "The Millionaire Next Door," but one thing about the millionaires is they surprisingly often don't have college degrees, sometimes not even high school.

HOWEVER, just about universally they highly highly value their own kids getting college degrees. It is one of the most important things they believe they can give their kids. So while they skipped parts of the traditional educational system, their experience after 30 years of life has convinced them that their own kids ought to have it.

pwgonFeb 1, 2020

Much of the premise of the 1996 book "The Millionaire Next Door" (https://en.wikipedia.org/wiki/The_Millionaire_Next_Door)

gdubsonNov 27, 2017

The Millionaire Next Door is a good read on lifestyle choices and changing perspective on what it means to be wealthy.

Random Walk on Wall Street is a great book on investing (spoiler alert: index funds).

I actually really found value in Tony Robins’ book on finance, even though it’s couched in a bit of an infomercial style. (And he advertises for some of his own companies, albeit transparently.)

You Need a Budget (the app / company) also made me think differently about budgeting. But, I still use the old version of their app and have no idea how well the new web-based version works in comparison.

liquidchickenonJan 29, 2016

I've come away from some of these types of books with some good tidbits, but have a hard time recommending them, especially to a young person. They tend to be a gateway drug into a culture of "The secret to making money is giving me some money." that I'm not comfortable with. I'd be far more comfortable recommending something data driven like "The Millionaire Next Door" (regardless of how that book is marketed) that highlights things like frugality, saving, and hard work.

imgabeonAug 16, 2016

> Nice clothes and a nice car indicate financial wellbeing

That, or a completely irresponsible attitude towards consumer debt. In most cases, the latter. So, this isn't really a very sound strategy for finding a mate who is financially sound.

Read The Millionaire Next Door. Most people who are actually wealthy drive moderate cars that are completely paid for. Since many of them own a small business that often works in a fairly blue collar industry, they're more likely to be wearing jeans and a work shirt rather than a suit.

nuggetonApr 5, 2019

>It is not how most rich people got rich by any stretch of the imagination.

Have you read the Millionaire Next Door?

I suppose it depends how you define "rich" these days, but the data in that book seems to indicate that most US dollar millionaire households are dual middle income workers who live below their means for decades and actively save and invest the difference.

laceroonJune 12, 2014

This article is basically the conclusion of the book the millionaire next door. The authors comb through statistics of the rich and interviews with wealthy people.

Building a business is probably the best way to make a large lump sum of money. Unfortunately the business is more likely than not to fail before bearing fruit and even after successfully running the business for large profits over time competition, laws, and factors out of your control usually kill the business. Due to the inherent risks and stress involved the book states that most successful people would not advise their children to start businesses but to get professional degrees, especially the kind that can work for themselves or consult such as law, medicine and accounting. Not so much the non-professional jobs such as business management.

ridiculousgameonSep 3, 2017

I'm naturally very frugal - prefer to have housemates, don't own/want a car, rarely eat out, have cheap hobbies. I was lucky enough to land a good software dev job at a big tech company right after college - high-five-figure salary plus a good chunk of stock. Saved/invested everything I didn't spend, for a savings rate well above 80%. Investments were mostly Vanguard index funds, nothing special.

High income plus low spending adds up fast. I "retired" (to work on my own unprofitable projects instead) around age 30 with about $700k invested. It's grown steadily since I stopped working, and very recently hit $1m.

If you're interested in this sort of approach, The Millionaire Next Door, the Mr. Money Mustache blog, and /r/financialindependence are good reads.

theWheezonFeb 3, 2019

As a more practical and realistic alternative to Kiyosaki's "Rich Dad, Poor Dad" I would highly recommend "The Millionaire Next Door" by Thomas J. Stanley and William D. Danko.

While not as eye catching or sexy as some other "get rich quick" books, it offers a profile of the average millionaire using research and interviews by the authors. As somebody who grew up thinking that wealth equated to status (and vice versa), this book was eye opening!

JMTQp8lwXLonFeb 4, 2020

You can have more than other people without tangibly owning more. Books like The Millionaire Next Door cover this. These millionaires don't own more physical resources, but have brokerage accounts that aren't subject to conspicuous consumption. They may also own a home or car, but it's not a mansion or anything more than a standard commuter vehicle.

ElfanonSep 14, 2007

See the "Millionaire Next Door" for an elaboration on this. That or another one of the books in the series has a long chapter on automobile purchasing habits.

DowwieonAug 8, 2016

Rich Dad Poor Dad is a great gift for those who are beginning their careers. It influenced my thinking and motivated me in many important ways. Today-- 13 years since my first reading -- I realize that what I'm doing today (4 years into entrepreneurship) is based on beliefs that took root during that first year out of university that I studied texts such as Rich Dad Poor Dad. Other texts included Tom Peters's books (The Brand You, Re-Imagine!), The Magic of Thinking Big, and The Millionaire Next Door.

jpgjbonMay 13, 2013

Here are some of my personal favorites:

1) The Millionaire Next Door
2) The Intelligent Investor (must read!)
3) How to Get Out of Debt, Stay Out of Debt, and Live Prosperously
4) Your Money or Your Life
5) I Will Teach You to Be Rich (relevant to you at your age)
6) Why Smart People Make Big Money Mistakes, and How to Correct Them (short and sweet)
7) The Rational Optimist (not specifically about personal finance but a great read about behavior)

Hope this helps, and if you ever want to discuss personal finance in more detail feel free to reach out, love helping!

thousandautumnsonApr 18, 2018

When I read "The Millionaire Next Door", I remember they actually found that the people who become wealthy actually tend to come from non-wealthy backgrounds. They hypothesized that later generations were more likely to have grown used to a consumption based lifestyle, and also felt freer to pursue non-lucrative but more appealing careers. For example, someone without a ton of money is more likely to go on and create a successful trucking business than get an art or history degree. They are also less likely to splurge on the new iPhone, car, etc., even after they manage to accumulate lots of wealth.

millstoneonMar 3, 2021

Steer clear of Rich Dad, Poor Dad. It is a fun read, and it does contain some good advice. But the author lies about his past, and the origin and quantity of his wealth, and the book also contains dangerous and illegal advice.

I suggest The Millionaire Next Door as a better book.

A good takedown of Rich Dad from John T Reed:


read_if_gay_onOct 3, 2020

> it’s depressing when we make a lot of money and somehow can’t save much of it.

I obviously don't know your situation nor how you handle your finances. If you have the time to spare though, The Millionaire Next Door is a interesting read on exactly this topic (how some people with high incomes don't seem to be able to save a lot of money, while some others actually manage the inverse). Not saying that it'll fix your situation, but it might provide an interesting perspective. Best of luck to you in any case, I'm sure you'll get through it.

horrifiedonAug 11, 2021

"If Read suffered from poor health during his working years or required long-term care, his estate would be a fraction of what it was."

So don't bother saving or trying to get rich, because you might become ill and have to spend the money on your health?

The whole article seems weird. What is their point? So 300$/Month is not enough, but 500$ would be? Surely that is something many people could at least aspire to?

I think the poverty discussion often overlooks the fluent nature of the economy. People who have low paying jobs today (say pizza driver) don't necessarily have the same job forever. But new "poor people" (often young people) will enter the market and become pizza drivers.

Should pizza drivers give up all hope and just "live"?

Also afaik the markets had good returns in the long run pretty much always. If it really would not be worthwhile to invest anything anymore, some serious questioning of politics would be in order.

I only recently read "The Millionaire Next Door", and while I didn't really like the writing style, I think it still made some good points.

billpaetzkeonJuly 13, 2010

Yeah, I don't do 401k. Nor am I depending on social security. I plan to start my own business(es) and get wealthy that way. I don't care if it's "risky" to start a business. That's what I choose to do. Also, the more cash/liquid savings you have, the more once-of-a-lifetime invest opportunities you can seize. I've gleaned this info from existing millionaires such as Mark Cuban, the book "The Millionaire Next Door," and others.

nickpponJuly 17, 2020

Best way to make raise employee's wages: competition between employers. For that we need more employers. For that we need more startups. For that we need more founders and entrepreneurs.

Competition is great, but at all levels.

Wealth creation is not zero-sum. Read PG's essay: http://paulgraham.com/wealth.html

Also some investment books:
"A Random Walk Down Wall Street"
"Rich Dad Poor Dad"
"The Millionaire Next Door"

Have fun learning!

JohnJamesRamboonMay 9, 2021

I’ve been reading The Millionaire Next Door and surprisingly few descendants stay rich. By fourth generation the wealth is completely destroyed. Likely because each generation didn’t have to work as hard and value the money. Of course there are exceptions, but this was what their data said.

Also I think only 20% of millionaires in USA inherited it, which really surprised me.

raganwaldonMay 13, 2011

One week in Toronto, there was a massive snow storm. I lived in the suburb of Oakville, and when I got to the commuter train station in the morning, I discovered that the service had been canceled. They were running replacement buses, but the buses couldn't carry that many people. It was chaos.

I spotted someone I knew from my Financial Modelling days, a LBO entrepreneur I will call "T." T was into buying and selling companies. Unlike the typical cost-cutting LBO types, T was a marketing specialist who thrived on identifying brands where company management were operations focused and had dropped the ball on marketing.

T was also a deadhead who once told me that money really does change your life: He and his wife could fly to Grateful Dead concerts instead of driving the VW bus of their college years.

T could afford a limo and driver, but his wife drops him at the train station every morning, because they only own one car. Even in a snow emergency, T was not fighting for a cab, he was trying to get on a bus. We linked arms and charged, and wound up in adjacent seats.

He was pleased to see I had made it up to home ownership, and that I was reading a book about personal finance, "The Richest Man in Babylon." He told me about a book he said was the best book ever written about money, "The Millionaire Next Door."

When we got to Toronto, I decided work could wait. I waded through the snow drifts to a book store and bought it on the spot.

SapporoChrisonJuly 1, 2019

You might consider reading The Millionaire Next Door, https://en.wikipedia.org/wiki/The_Millionaire_Next_Door
One of the big surprises in the book was the number of millionaires that live very modest lifestyles.

They become millionaires and stay millionaires because they don't change their frugal spending habits.

Now certainly these people living modestly don't have assets at home that are juicy targets, but they would be juicy targets for kidnapping and extortion.

wensingonNov 28, 2008

In that case, may I recommend The Millionaire Next Door?


EDIT: Must say I'm not really sure why I was downmodded; this is an excellent book (a classic really) that provides advice from 'actual rich people'. Maybe it's the get-rich-slowly aspect?

adammichaelconJune 2, 2010

There's a book called "The Millionaire Next Door" that gives all the citations you could ask for on this topic. It basically corroborates what you're saying -- wealth usually doesn't last past the 2nd generation.

Link: http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/d...

wy35onOct 15, 2019

Anyone can read The Millionaire Next Door 200 times by quitting social media

myrandomcommentonMay 5, 2021

He recently publicly announced his successor. No issues. No one blinked. One of the best long term companies to own shares in. Investing to build wealth is a long game. All of my "bets" are looking out 20-30 years. Short term some years I have not out performed the market, but over the lifetime since I started I have (15 years so far..)


There is a booked called "the millionaire next door" that is a good read.

jseligeronNov 30, 2014

Great comment! I want to emphasize this:

A Random Walk Down Wall Street by Burton G. Malkiel lays out the basics of portfolio diversification.

A Random Walk Down Wall Street is one of the best books I've ever read, and I'd only add that I think The Millionaire Next Door is also excellent. When most of us think about millionaires we think about Hollywood stars, tech company founders, and finance moguls. But most millionaires are actually normal people who spend below their means and invest what they can, usually in index funds and sometimes in a house. If they marry they don't divorce (divorce is very, very expensive and modern marriage is a high-risk endeavor).

Chances are good that most of the millionaires you know don't live like millionaires—which is why they can be millionaires!

mark_l_watsononMay 23, 2010

The author makes a good point, similar to those made in the excellent book "The Millionaires Next Door." My wife and I have make it a habit of saving for new big ticket items like cars to avoid debt payments and it makes a difference: both in saved interest payments and fewer purchases. I have worked just part time my whole life making a good but modest living while my brother owns two optometry offices, has lots of income, but not so great investments and buys a lot of "toys." It seems really strange to me that I am ending up with more assets than he has when I took it easy in my career and had fun.

danesparzaonAug 11, 2015

==For electronics:

The Art of Electronics 3rd Edition (interview with the one of the authors, if you're unconvinced: https://www.youtube.com/watch?v=iCI3B5eT9NA )

==For finances:

The Millionaire Next Door (filled with a lot of interesting facts and habits from extensive research)

==For food/cooking:

Alton Brown's Gear for Your Kitchen

BakeWise: The Hows and Whys of Successful Baking

folkhackonMay 11, 2020

"The Millionaire Next Door" was published in 1996 when the economy was booming, the dot-com bubble had yet to burst, and the employment market meant anyone slightly skilled could get a FT+benefits career.

In the 24 years since that book's publishing I absolutely argue that ladder has become more difficult to climb. But hey - what do I know? I'm just a lazy millennial who's now living through his second major recession, with the first one landing directly on when I was entering the work world FT. Thank goodness for my tech career because let. me. tell. you... my peers were struggling. Especially the ones who persisted in Cedar Rapids (blue collar Iowa town).

But sure - 85% of American millionaires are "self-made", whatever the heck that means. I don't doubt that's how they feel about themselves and self report!!!

WalterBrightonJan 31, 2021

85% of American millionaires are self-made (didn't inherit it).

See the book "The Millionaire Next Door".

jetrinkonJuly 13, 2018

> It's the findings of a statistical analysis of the life and habits of millionaires.

I have not read The Millionaire Next Door, but that seems fraught. Does it avoid survivorship bias? E.g. Playing the lottery is a 'habit' common to all lottery winners, but it's also common to all lottery losers, of whom there are many more. If you only studied the winners though, the lottery might start to look like a wise investment. Maybe the habits common to millionaires are counterproductive for the average person and only helpful to the lucky few.

WalterBrightonJune 20, 2020

> You’ll see first hand that poor people aren’t stupid when it comes to how they spend their money and they aren’t making irrational financial choices.

My father would work with the insolvent privates making a budget for them to get them on a sound basis. They rejected his help 100%.

My accounting teacher would explain how compound interest worked to the car buyers, and they accused him of trying to cheat them.

The Frontline episode shows they were making poor investment decisions.

And lastly, buying lottery tickets doesn't auger financial judgement.

> in the exceedingly unlikely event that you are as skilled financially as you believe yourself to be

At least I've never bought a lottery ticket, only lost pocket change in Vegas, and only buy cars I can pay cash for, so there's that :-)

> you should be sharing your knowledge far and wide with those in need

There are plenty of excellent books on the topic, nothing I can add to that. "The Millionaire Next Door" is a good one if you're interested.

WalterBrightonMay 10, 2020

> nepotism

85% of American millionaires are self-made.

"The Millionaire Next Door" by Stanley

VeeloxonMar 6, 2018

> there's no way I'm going to have saved enough money to live off of

It is possible. It will take work and change on your part. The first step is to track your spending. The easiest way to do this is get an account with mint, ynab (you need a budget), or personal capital. You can link all of your accounts with the site and app. You can then categorized your spending. After you do this you can start seeing where you can reduce your spending. The major areas you can save on are housing, transportation, food, and miscellaneous. The reverse order is probably the easiest to reduce costs.

The Millionaire Next Door is a great book that talks about the difference in mindset between people who are able to build wealth well and those who are not able to. It is really eye opening if you are always broke.

wwwestononJuly 13, 2018

> The Millionaire Next Door was a game changer for how I though about wealth accumulation. It's the findings of a statistical analysis of the life and habits of millionaires.

So, it's been a while since I dipped into this book, but my recollection was that I read the summary and intro and thought "this sounds like an analysis which suffers significantly from survivorship bias." Did you find with a close read that was/wasn't a problem with the picture it presented?

(Not that I think that the advice I skimmed over was bad, certainly, I don't like to buy depreciating assets like cars on credit, and more people could likely benefit from budgeting investing conscientiously.)

SMAAARTonNov 21, 2020

Like you, I am not "normal".

Today's economy not only is based on people buying thing they don't need, with money they don't have, to impress people they don't like; but also it is rooted to the core of the ID and Ego, it's a quasi-spiritual experience, and, like all belief-system, when challenged, it would bring out its ugly side.

Did you read the book: The Millionaire Next Door? You'd enjoy that. I bet your local library has it.

AnimatsonNov 1, 2019

It is hard for people to opt out.

Nah. It's not hard. Just don't buy stuff you don't need. Good ad blocking helps, too.

I know a couple who were way too much into bling. They blew through $15 million and ended up in crap jobs. The wife once told me I should get a Rolex. I said "Why?".

There are many people who have money but don't show it. Read "The Millionaire Next Door".

such_a_casualonNov 8, 2015

It's explained in the book I mentioned. You would also need to educate yourself on personal finance by reading some other books to get a more holistic picture (The Millionaire Next Door is a good place to start).

There's three things you need to understand about personal finance:

1. The first is that shit happens and most people don't plan for it (because they haven't been educated on personal finance). Most resources suggest that you keep an emergency fund of 6-12 months of living expenses saved up for when shit happens. We know that most people do not have this. I'm not even going to bother providing a source because there are so many sources on how Americans don't save.

2. The number one expense for any given household is going to be housing (whether owned or rented).

3. While you can cutback on many things, you cannot cutback on a mortgage. So if there are permanent setbacks to your finances: someone loses their job and gets another one that pays less, someone gets hurt and can't work for a while or ends up on disability, someone has to stay home to take care of an unhealthy relative, etc, then you can be pretty much shit out of luck unless you're house has equity on it and you can sell and downsize (although most people will just take a loan out against their equity lol).

So these are the characters of our stage. If you get a mortgage based on 1 person's income and something happens, there is another person there to step up. This provides a powerful safety net for the family. If you get a mortgage based on both people's incomes, you are putting yourself at greater risk because if something were to happen to either person you would not be able to afford to keep your 15-30 year agreement. And the cost of getting out of that agreement is enormous (as we saw with the recent housing crash).

I encourage you to read more on personal finance. It's incredibly fascinating.

zhdc1onAug 11, 2021

Thomas Stanley was a marketing by professor who made a name for himself teaching others how to sell to the rich.

The Millionaire Next Door was largely written to dissuade people of the notion the hyper consumerism and associated advertising was an effective strategy for reaching a majority of upper wealth households.

Wealthy households are generally frugal compared to their level of net worth. This is particularly true for wealthy households at the lower end of the scale (e.g., the millionaire teacher who got that way by investing 15% of their net income consistently over 30-40 years).

Immigrants and business owners do have an advantage, and he goes into detail about how living in less wealthy neighborhoods is a wealth building advantage, but his main argument is that thrift, savings, and simple math are the main drivers of wealth.

WalterBrightonNov 13, 2017

85% of American millionaires are self-made, i.e. they did not inherit it.

"The Millionaire Next Door" by Stanley

mechanical_fishonAug 23, 2010

Looks like it's time to recommend The Millionaire Next Door:


Don't bother to buy it: Get it out of the library and skim it. It's not a difficult read and it belabors its own point a bit. My own summary:

The secret to retaining a high net worth is the same as the secret to accumulating it: Control spending. Don't waste money.

Most of the people you know who look like they're wealthy -- fancy cars, country club memberships, stylish clothes -- are actually spending money as fast as they can get it, or faster. They have no savings and are living paycheck to paycheck.

Meanwhile, many of the wealthiest people in your town are wearing four-year-old work clothes and driving ten-year-old trucks that they bought used.

It doesn't do your future any good if you make $300k per year and spend $325k per year. Contrariwise, if you make $75k per year and only spend $50k per year you'll be a millionaire in under forty years.

MCRedonJan 29, 2016

I read this book, was skeptical given the gungho attitude, so I did some due diligence: Roberty Kiyosaki claimed to have founded a company that went public. So I figured Kiyosaki was a rare enough name and searched the SEC records to find out if this was true. Was unable to find any evidence that he had taken a company public, and so he lost credibility with me.

You meet really entertaining characters in bars sometimes too. They are fine for entertainment but don't take them too seriously.

Putting money to work for you is wise, good advice and there are better books for it. Like "The millionaire next door" and "the wealthy barber" (a little lite but a good intro) and "Buffetology" and "The dummies guide to REITs" and the like.

Managing real estate yourself is no small task- you have tenants and a lot of work to do for them. Putting an agency in between you and the tenants means you may be giving up a lot of your profits to the agency.

The best thing that happened to me, though was I started reading http://mises.org. There in 2000ish I learned about how the fed and CRA were going to create a housing bubble. And the consequences of that. I invested along that thesis in the mid 2000s, getting out of the market in 2007 when things were too crazy to make sense (missed the top by a year, but still good timing.)

Macroeconomic understanding (And I don't mean what politicians talk about or the politically connected people like Paul "we need a housing bubble" Krugman) has been very profitable for me. More profitable than any stock tip.

Also gained a lot of insight from attending Berkshire Hathaway annual shareholder meetings, but now I just read the annual reports.

BobWarfieldonJan 8, 2013

Wealth is not revenue, it is income that comes about in abundance. To increase income either increase revenue or decrease expenses. It turns out that decreasing expenses is nearly risk free and is easier. Hence the Millionaires Next Door are good at that strategy. Not sure why this book is having a resurgence, but the other big point it made was the value of owning your own business versus working for someone else.

A close corrollary of the expense thing is to evaluate debt as an investment with a guaranteed return equal to the interest you're paying. Once you see it like that, it's very hard to argue against paying off all of your debt as quickly as possible. Those returns are hard to come by on the revenue side.

inerteonMar 27, 2017

The Millionaire Next Door: The Surprising Secrets of America's Wealthy.

We know the "rich", people who spent $10M on a Yacht as a parking space for their 1M private jet which they use as a cellar for their $10k wines.

And we think millionaires are like that but on a smaller scale. ACTUALLY... most folks who have $1M liquid are hard working, cheap, frugal (still cutting coupons from ads). The reason why this book is so good is not only because it shatters the perception about how millionaires live, but if you take the description of their lifestyles as a lesson, it will make you manage your money better.

Most people in the US have tons of debt, don't have $500 to use for an unplanned spending. Probably this forum full of well-paid high-tech professionals less so, but still, the principles are all the same. In fact, there are parts of the book talking about how big earners also spend big (and fast), so it's a good reminder of how not spending money is as good as earning it, and also usually easier to do.

omegahamonFeb 8, 2015

This applies to a lot of jobs. Lawyers at certain firms are expected to wear expensive clothes and drive nice cars; the guy who drives a Geo Metro to work and wears a "meh" suit is frowned at. Even more ridiculous is the fact that like the drug dealers, the fashion is driven by the richest people, and the less secure and wealthy folks follow.

There's a great book called The Millionaire Next Door, where they look at the spending habits of millionaires. One of the things that stuck out was the fact that a lot of these people have "boring" jobs that don't have "face" to keep. No one really cares about what the owner of a janitorial company or a welding supplier looks like, so there's no pressure for him or her to have the Right House or the Right Car or the Right country club memberships. In contrast, the book notes a couple of doctors and lawyers who are really active in their professions' social scenes and are living paycheck-to-paycheck despite earning far more.

Personally, I like my Shittic (beat-up Civic that is missing half the paint). Every month that it keeps running is another month that I don't have to make a car payment. My girlfriend winces every time she sees it, though...

nuggetonSep 24, 2016

Here are some numbers to consider. $500k pre-tax is about $325k after taxes (SF or NYC). Spend 50% ($162.5k), save 50% ($162.5k). After 10 years of a consistent $500k pre-tax income (no burnout, no voluntary breaks, no unemployment), with modest annual stock market growth, and no black swawns (family illness, lawsuits, divorce), you've saved up about $2 million. The rate at which you can spend money and not run out before you die (called the Safe Withdrawal Rate or SWR) is about 4% (some will argue closer to 2.5-3%). 4% of $2 million is $80k/year pre-tax. How long you need to work to cover your $162.5k/year lifestyle becomes an obvious function of savings rate and market returns over an extended period of time (decades). The bottom line is that it's extremely difficult for working professionals to become ''rich'' in the sense that they can indefinitely sustain an upper class lifestyle on passive investment income alone. Read ''The Millionaire Next Door'' by Thomas Stanley (http://fave.co/2cLN5gp) to learn more about how wealth is truly accumulated and managed in the United States. This book had a greater impact on me than pretty much any other I've ever read.

dmixonOct 15, 2019

Anyone can read The Millionaire Next Door...

angarg12onFeb 1, 2018

Read "The millionaire next door" for a book-length explanation of this.

gbacononJuly 29, 2018

This idea of the idle wealthy is a stereotype that harbors envy despite the fact that it does not match reality. In The Millionaire Next Door by Dr. Thomas J. Stanley, the author found that 80% of American millionaires had parents who were not millionaires and inherited no more than ten thousand dollars.

kaitaionAug 3, 2018

Reading "The Millionaire Next Door," as much a of a cliche or a classic as it is right now, really opened my eyes to some of this nuance for me. The book points out that many high earners are still living paycheck to paycheck, and some lower earners do quite well by saving aggressively. So who is rich, the software engineer who earns $120k/year in a LCoL area and takes expensive vacations and buys photography equipment and has a nice house & great car and has little saved, or the senior school teacher who makes $80k and saves a ton, but doesn't take the expensive vacations, drives a 20-year-old Civic, and enjoys gardening? What's the definition of rich? What's the definition of value? What do you want in life?

The other aspect is (as you and parent posters note) the comparison with others. If you live in an expensive area where everyone drives a nice car, pays for a gardener, and sends the kid to a high-tuition school, you'll stand out if you drive a 2008 Civic, have an adequate but not nice yard, and send the kid to the public kindergarten. "Comparison is the thief of joy," said someone. I personally was much happier with my un-professionally-landscaped yard and small house and used car in my middle-class neighborhood when I realized that those were reasons we have a higher net worth than most of our peers, not signs that we don't.

WalterBrightonSep 29, 2016

85% of American millionaires are self-made. Source: "The Millionaire Next Door" book.

technofiendonMar 1, 2021

Go read The Millionaire Next Door. You'll see that there are plenty of people like yourself who remain frugal after managing to pull themselves out of poverty. I'm suggesting the book to both validate your behavior but also give you some examples so you can perhaps moderate it if you still feel that's needed. I can give a single example from my life: my uncle managed to snag a liquor distributorship after WW II. It was a license to print money. He never moved out of the first postwar house he purchased when he started his business because he just didn't see the need and he felt showing off his newfound wealth in poor taste.

In short, you're not alone and as long as you're not making yourself or people in your life miserable well maybe you're not too far off from where you need to be.


I will say the folks who come from richer backgrounds do have some advantages over us who grew up poor. For instance I had no idea how much scholarships subsidized learning and went to the state school I could afford to fund on my own.

WalterBrightonMay 23, 2015

> teaching a child that factor (3) is the only one of import does him a great disservice.

I've seen a lot in my life with this, and it's wildly untrue. I know many families with multiple children, and over time some of those became millionaires and others did not. None I know started with inheritances. I know a lot of self-made millionaires. All of them share a common attitude that their future is in their own hands, and it's clear from the arc of their financial lives that that is true. Their choices produced their outcomes.

The ones who did not become millionaires also share a common attitude that nothing they could have done differently would have changed anything.

The fatalistic outlook you have will be self-fulfilling. But you can choose to change it. It really is up to you. The choices you make matter. If you want to know more, I can't recommend a better book than "The Millionaire Next Door" about how ordinary people doing ordinary things become wealthy.

thesethingsonMay 23, 2010

I really, really recommend reading The Millionaire Next Door (I have no affiliation with it. It's kinda old-school, but in no way out of date.).

Almost the entire book is about how luxury goods are NOT consumed by rich people, but by semi-struggling middle class people. (BMW's, Rolex, premium liquor, etc.) (Or at least people who have to go in to debt to consume these things.)

(It's also about how rich people DO live, choose to buy stuff, negotiate, etc.)

Everybody in this thread who's saying, "duh, cars aren't supposed to be an investment," are technically right. And everybody should indulge in things that really make them happy. If cars are your thing, go on, do your thing. It's all good.

But in the Millionaire Next Door, it goes over how cars are an especially precarious purchase for most people, as they just really eat up a lot of money over time. For most people, even non-luxury car purchases require a loan.

Cars might be more dangerous for us than say Rolexes, because most of us think "well either way I have to have a car, might as well get a _____."

Anyway, maybe this article wasn't the most persuasive case, but it is true. Most rich people don't have fancy cars, or probably fancy anything.

(In the Millionaire Next Door, it says we get confused by this because there are a famous outliers who show off their wealth, so we incorrectly associate wealth with luxury, when they're rarely related.)

edanmonJuly 24, 2013

The book "The Millionaire Next Door" [1] talks about this in quite a lot of detail. From my recollection, it's based on studies the authors have done.

[1]: http://www.amazon.com/The-Millionaire-Next-Door-ebook/dp/B00...

toomuchtodoonAug 22, 2018

I happen to be reading "The Millionaire Next Door" [1], and this has some truth to it (statistical excerpts [2]). Most "working class" Millionaires own a small business and are very frugal, continuing to live below their means after obtaining their wealth. Frugality alone will not help you attain the quoted wealth level, but it is a component (along with a healthy income and/or equity/asset ownership).

With reference to "common jobs", that would be limited to high income professions, such as doctors and attorneys.

[1] https://smile.amazon.com/Millionaire-Next-Door-Surprising-Am...

[2] https://www.washingtonpost.com/wp-srv/style/longterm/books/c...

jseligeronMay 12, 2013

(Depressing news: in spite of the "economic miracle" that college is supposed to work, but hasn't for a long time, the #1 predictor of whether someone will be wealthy is having wealthy parents.)

That might be "the #1 predictor," but out of how many predictors? What "percentage" is it, if that term is even meaningful here? How do we decide what counts as "wealthy?" Is it income or assets? If income, what happens to people making $300,000 a year but spending it all (I have met these people). What happens to the Millionaires Next Door (http://www.amazon.com/The-Millionaire-Next-Door-Surprising/d... ; it has done more to shape my thinking about wealth than any other book. One surprising fact: most millionaires don't have extraordinary incomes but do consistently live below their means and save their extra money)?

If having "wealthy" parents is the #1 predictor and accounts for, say, 20% of the likelihood of the next generation's wealth, and, say, education accounts for another 10%, what happens if 40% is noise / randomness? Then noise accounts for twice as much as wealth! Most of the actual peer-reviewed studies I've read about this topic come to the conclusions they do through some dubious data decisions.

I'm not trying to pick a pointless, semantic fight here, but I see a lot of statements that try to compress a complex set of issues and questions into a single metric. As usually happens with this sort of thing, there's also an element of anecdote here: I have seen kids from wealthy families piss it all away and kids from poor families do the opposite. My own grandparents had virtually nothing and didn't speak English.

WalterBrightonJuly 20, 2015

Counterpoint: 85% of Millionaires are self-made. See the book "The Millionaire Next Door."

whatusernameonAug 20, 2009

Have you ever read 'the millionaire next door'? While it had a slightly different use of entrepreneur than HN - he wasn't in any way talking about high tech - his point was that the typical millionaire ran their own business - and it was usually something boring (eg Dry Cleaning, Construction, etc).

It's worth a read.

SMAAARTonMar 1, 2021

My story is somewhat similar to yours, grew up poor AF and in a toxic environment. I escaped in my late 20's, moved cross country and put myself through college and then MBA part time while working full time.

Fast forward to today I am doing well, like you I have no debt whatsoever, decent cash flow, and decent net work.

A couple of interesting things:

1. 1/3 of homeowners in the US are mortgage free

2. Read the book "The Millionaire Next door"

Third anecdotal note: I have recently switched job, and I work in a company where there are about 25 people. Well I have noticed that the amount of $ spend on lunch is inversely proportional to the pay: the highest paid employees pack their lunch from home; the lowest paid go out and buy lunch most days, and more expensive lunches.

icedchaionFeb 14, 2020

More folks need to read "The Millionaire Next Door." I read it in my early 20's and it was an eye opener. Becoming "rich" (upper middle class, single digit millions, don't have to worry about working, not "billionaire" rich) is more of a matter of living below your means, saving, and investing consistently.

You can take luck out of the equation if you have time. Unfortunately most people are too old before they realize this (if ever)...

WalterBrightonMay 23, 2015

Read the book "The Millionaire Next Door". It is entire possible, and in fact commonplace, to become wealthy by quite ordinary and predictable means.

It isn't really about working hard, either. That's a myth. It's about working effectively, and making prudent, common sense choices about what to do with your income.

Of course, life can hand you a lot of bad luck that can derail your plans. But this is simply not the usual experience.

nkhonFeb 8, 2010

I say the following with great respect. I do not know much about you or your circumstances, but I do share the same opinion of inherited wealth as a lot of great American business men. For example:

“The idea that you get a lifetime of privately funded food stamps based on coming out of the right womb strikes at my idea of fairness.”

- Warren Buffett

And more importantly. “Great sums bequeathed often work more for the injury than the good of the recipients.”

-Andrew Carnegie

In The Millionaire Next Door (1996), researchers Thomas Stanley and William Danko conclude that lifetime and testamentary family gifts are both a disincentive to work as well as a disincentive to save. Their findings show that the more dollars adult children receive, the fewer they accumulate, while those who are given fewer dollars accumulate more.

While you may just be looking to "keep the nest egg safe" with a 4-5% return. I urge you not to drift into a life where you play it safe and do not contribute to society.

While you should protect your money and not do anything foolish with it, don't let it ruin your opportunity you have. You are one of the luckiest people to ever live. You have been given a lifetime of wealth at one of the most exciting times ever to be alive. While 5 million may not be a lot compared to Paris Hilton, I assure you it can be good enough to fund something truly worthwhile. Take Darwin for an example, or look at what Bill Gates is trying to do.

So while I doubt one comment on HackerNews could ever change your mind if you are already "spoiled", I urge you to stay apart of the HN community (and other communities of ambitious "doers") and find a way to contribute to a project that could really help the world.

akg_67onMar 31, 2014

1. Invest in Yourself.

2. Value experiences over things.

3. Avoid borrowing money as much as possible. Avoid debt.

4. Keep an emergency fund.

5. Invest in low cost Index mutual funds/ETF.

6. Read following books:
6a. Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence.
6b. The Millionaire Next Door: The Surprising Secrets of America's Wealthy
6c. A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

gbacononNov 13, 2017

This is a losing battle for would-be tax reformers. The flip side of a large tax bill is an equally large incentive to minimize the legally required, or at least defensible, liability. As revenue grows, finding the denizens of Hacker News for Tax Attorneys and paying them larger and larger fees
makes more and more sense. On one side are slovenly political committees and the other elite tax code hackers.

When proponents of “fair share” and “ethical tax planning” resist giving exact definitions of these terms, they cannot be implemented but are instead red meat talking points to toss out to fellow partisans. In his book The Millionaire Next Door, Tom Stanley characterizes American millionaires, some 80% of whom received inheritances no larger than $10k, as being good at playing defense, that is keeping unnecessary outflow down. With this mindset, tax bills are only another expense to drive down, and they’re skilled and determined at doing so.

What it comes down to is it’s always easy to spend someone else’s money. Everyone thinks he is paying his fair share of taxes, but the guy down the street is another matter.

kelukelugamesonSep 2, 2017

The first is the Millionaire Next Door. Gave me a better idea of how to manage my finances and what kind of spending habits to look for in a partner. If you are a tightwad then don't marry a spendthrift. Vice versa. [http://amzn.to/2vAmbW8]

The second is On Writing Well. This book changed my view regarding how to write and how important it is to write well. As an engineer I regret how much I avoided writing in school. Now I play catchup after realizing lawyers and others with client facing jobs write much better emails. [http://amzn.to/2vTXu27]

And here are three other books that would be recommended by few on HN.

The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing. I used to hate going home until I realized the clutter of stuff made me miserable.

Why Men Love Bitches. 100% serious. This book is over the top but I stopped being a doormat in relationships and looked for partners with more self confidence. [http://amzn.to/2wwcYeZ]

The Low Down on Going Down. Yes the title is cheesy, but again I am 100% serious. I think a lot of us have unhealthy expectations due to Internet porn and this book sets the right attitude for the physical component in a relationship.[http://amzn.to/2vTSY41]

And companion book: [http://amzn.to/2wwSpyY]

nuggetonAug 7, 2016

The Millionaire Next Door by Thomas Stanley

markdog12onSep 27, 2017

> Also, he seems to pretend as if he is the first person ever to live like this but there are many others that simply never thought of themselves as special in any way. See also: the millionaire next door.

He believes the world would be a better place if most people lived a bit more like him (independence, hard work, frugality, etc). I don't see anything wrong with blogging about it. Also, he certainly doesn't claim he's the first person to live like this, and regularly cites influences, including an entire post dedicated to Millionaire Next Door: http://www.mrmoneymustache.com/2011/05/14/weekend-edition-bo...

And the book he credits with changing his life: http://www.mrmoneymustache.com/2011/05/28/weekend-edition-th...

WalterBrightonApr 4, 2014

85% of Americans are self-made - see the book "The Millionaire Next Door."

poulsbohemianonSep 5, 2014

Ever read "The Millionaire Next Door"? You might be surprised at people around you who have more money than you think, though the challenge is getting them to admit it and harder still to get them to invest. I have several people close to me who could easily write a cheque for $1MM+, but you'd never know it to look at or talk to them - totally normal people who worked completely boring careers, didn't receive a huge inheritance, but simply worked hard, saved their money, invested well (often in real estate), and have lived long enough to see those investments grow.

But, trying to get those kinds of people to invest $1MM+ would be a serious chore - they got their by saving their money and via extreme frugality, so any investment they would make would come with serious strings attached.

icedchaionAug 19, 2018

Yep. The one surefire way of becoming a startup millionaire as an engineer: save and invest consistently. I recommend that everyone read "The Millionaire Next Door" in their 20's, and actually follow it.

In 20+ years in the industry, the only equity that ever paid off didn't even make up for the pay cut that I took to go there. We don't talk about all the losers.

arakydonJune 28, 2008

Based on that description it doesn't sound like he's looking carefully at people who weren't successful:

"There is a silly book called A Millionaire Next Door, and one of the authors wrote an even sillier book called The Millionaire's Mind. They interviewed a bunch of millionaires to figure out how these people got rich. Visibly they came up with bunch of traits. You need a little bit of intelligence, a lot of hard work, and a lot of risk-taking. And they derived that, hey, taking risk is good for you if you want to become a millionaire. What these people forgot to do is to go take a look at the less visible cemetery — in other words, bankrupt people, failures, people who went out of business — and look at their traits. They would have discovered that some of the same traits are shared by these people, like hard work and risk taking. This tells me that the unique trait that the millionaires had in common was mostly luck." - Nassim Taleb

Gladwell's previous work on genius isn't that promising either: http://infoproc.blogspot.com/2007/05/gladwell-and-genius.htm...

Finally, I doubt that the book will be better than this: http://www.scribd.com/doc/2926754/The-Mundanity-of-Excellenc...

jseligeronMay 27, 2010

Go read The Millionaire Next Door: http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/d... . Ideally buy it from that link, because it has an affiliate link to it, and I get maybe $.10.

Then go read the Motley Fool's Guide to Investing: http://www.fool.com/investing/basics/index.aspx .

For now, leave the money in a bank or Vanguard low-risk bond fund (see www.vanguard.com) and don't do much of anything with it. Read a lot until you understand what you're doing. Don't trust any single source of advice, and don't trust financial advisers. Their interest is often in high fees and is often opposed to yours.

Finally, remember that no one can beat the market over the long term. Anyone who claims they can should be doubted (although they'll undoubted say that I should be doubted. The difference is that I have Efficient Market Hypothesis: http://en.wikipedia.org/wiki/Efficient-market_hypothesis on my side, and they have... promises).

jsiartoonJuly 23, 2012

You should read "The Millionaire Next Door." (http://www.thomasjstanley.com/pub-books/1/The_Millionaire_Ne...) There is whole chapter on why you don't buy new cars. Mostly because they lose a ton of value as soon as you drive them off the lot.

Most millionaires in the US drive American-made cars that are 2 - 5 years old.

EDIT: It's actually not "most millionaires" -- only 20%: http://www.thomasjstanley.com/blog-articles/395/Millionaire_...

throw0101aonMay 22, 2021

> The book The Millionaire Next Door provided data to support "Seek wealth, not money or status". […] I like the Tweet thread, but prefer the Millionaire Next Door cause it's backed up by actual data.

Fooled by Randomness by Nassim Taleb, most/more famous for Black Swan, pokes holes in the methodology used in TMND, specifically survivorship bias.

Another observation from FbR:

> I will set aside the point that I see no special heroism in accumulating money, particularly if, in addition, the person is foolish enough to not even try to derive any tangible benefit from the wealth (aside from the pleasure of regularly counting the beans).

* https://www.goodreads.com/quotes/553605-i-will-set-aside-the...

subsubsubonSep 2, 2017

Here are all of the books, without the affiliate links:

- The Millionaire Next Door [https://www.amazon.com/gp/product/1589795474]

- On Writing Well [https://www.amazon.com/gp/product/B0090RVGW0]

- The Life-Changing Magic of Tidying Up [https://www.amazon.com/gp/product/1607747308]

- Why Men Love Bitches [https://www.amazon.com/gp/product/1580627560]

- The Low Down on Going Down [https://www.amazon.com/gp/product/B00CMX939C]

- Blow Him Away [https://www.amazon.com/gp/product/B004WSV866]

matt1onNov 28, 2008

I haven't read this, but Nasim Taleb talks about it a lot in Fooled by Randomness. For example, Thomas Stanley, the book's author, states that risk taking is a common characteristic that rich people have. Nasim basically says "Yeah, sure, but what about the masses of people who are poor because of their risk taking?"

I recommend reading Fooled by Randomness first and then, if you're still interested, The Millionaire Next Door.

MrPowersonAug 11, 2021

Thomas Stanley and Sarah Fallaw (Stanley's daughter) published an updated book in 2016 called The Next Millionaire Next Door: Enduring Strategies for Building Wealth. They argue the conclusions from the Millionaire Next Door still hold and directly address Taleb's survivorship bias claim.

Remember that Thomas Stanley had a PhD in finance and didn't do garbage research.

There is a leanfire subreddit if you're looking for real world stories of people that are currently living the high savings lifestyle: https://www.reddit.com/r/leanfire/

Here's a great video of a young, modern leanfire couple: https://www.youtube.com/watch?v=Lb3Z5cGOksY&ab_channel=CNBCM...

Millionaire Next Door might not be possible for minimum wage workers in HCOL areas anymore, but seems to me like lots of folks are still figuring out how to make it happen and become financially free at a young age.

hkmurakamionAug 21, 2014

One company of the same ilk I'm familiar with is a certain tree-cutting company in that area (I'm sure you know which one I'm talking about). They make fantastic money and have a virtual monopoly on the cyclical need of homeowners in the area for trimming branches of the towering trees in their yards, so that high winds will not knock them down onto their homes. Each homeowner needs to spend a few thousand dollars every 3 years or so for this service.

However, this family business has been in existence for 60+ years. I don't think that starting a new tree cutting business and going head to head with them will be nearly as profitable if at all, because you wouldn't have the same contacts and good will that they do. Contract work is often a word of mouth and referral business, not dissimilar to the legal world.

I totally agree that such small business owners can make great money. I recall from The Millionaire Next Door that many of the "millionaires" profiled in that book have the unsexiest businesses that they'd been working hard at for decades, saving wisely. I do know of an electrical contractor that worked on our house a couple of years ago has a healthy, very profitable business going on. But I think there's more than what immediately meets the eye, and just going into an unsexy business for the sake of going into an unsexy business is not a sufficient condition for financial success in one's business.

GoronmononMay 6, 2013

Well, "Millionaire Next Door" uses examples of millionaires to provide some form of guidance (at least on some level) to non-millionaires on what it takes to actually become wealthy.

Though, I haven't read it, I would assume that "Fooled by Randomness" would explain the wealth of the individuals from "Millionare" as more to do with luck than anything else, and that it's not repeatable. And that fulfilling the "American Dream" has more to do with being lucky than with hard work.

krschultzonMay 11, 2009

If you read the book Millionaires Next Door they pretty much tackle this problem and show that owners of small->medium sized businesses are the bulk of the millionaires. A lot of these businesses are just run of the mill things like construction, commercial real estate, service stations etc. The home runs from taking huge risks are few and far between.

zootaronOct 11, 2010

Most advocates of saving that I’ve seen in mainstream media are interested foremost in personal finance, not anti-consumerism. To them, the problem isn't that people enjoy spending money. On the contrary, they want to help people spend their money in a way that maximizes the amount of enjoyment derived. Writers like Stanley know that spending a lot of money early in your working life is rarely a way to maximize enjoyment.

What a lot of people don’t realise is that “short-term pleasures” cost a lot more when you’re older. In your 20s and 30s, you don’t need much more than a computer and a bicycle to be perfectly content. You have lots of energy to work, study, take cheap outdoorsy vacations, and cut your own lawn. But at some point, you start to find those things significantly more wearisome. That’s when it’s really nice to have the financial freedom to quit your job, eat in good restaurants, and outsource all of your home maintenance. By far the majority of people won’t achieve that level of financial freedom unless they defer a large proportion of their income from the first half of their career to the second half and to retirement.

Evidently, many people must overcome significant psychological obstacles to save their money. That’s why there are so many personal finance books trying to explain the same idea in different ways. Some emphasize the time value of money. Others, how expenses tend to increase over one’s lifetime. Stanley tries to reduce the urge to spend by showing that many big spenders are not actually rich or financially secure. The success of “The Millionaire Next Door” seems to be evidence that a lot of people find this approach helpful.

programminggeekonSep 6, 2018

Plenty of people can afford to retire, but they spend money like fools and then wonder why they don't have any. Read The Millionaire Next Door or listen to Dave Ramsey and you'll quickly learn that you can save plenty on a low income or go broke on a high income. Savings, income, and wealth building are in fact three distinct and also interrelated things.

darksaintsonJune 29, 2021

The Millionaire Next Door is about as misleading as it gets, at least for today. Let's not forget that $1M in the mid 1990's is about the same as $2M today, at least in terms of terms of CPI. Even then, that is after 20+ years of housing prices outpacing inflation by 2x or more.

In the mid 1990's, the top 20% could get to $1M with some good financial discipline and hard work. Today? Maybe the top 1% could save $1M, and unless you inherited the family home, you're still living a lifestyle that is somewhat median in 1995 terms.

The fact that $1M is still some kind of mental benchmark that we hold up for being "rich" tells us everything we need to know about today's economic conditions.

So the principles of the book may still apply, but the outcomes are worlds away from reality.

gbacononDec 28, 2017

In my experience, mid-market firms are financed by smaller local or regional banks with whom the owners have built relationships. Certain industries, such as any where the firm has government receivables, are bankable almost immediately, but others are not. The latter give us the stories — that never seem to caution the listener to mind survivor bias — of would-be entrepreneurs scratching together high-risk initial financing with credit cards, borrowing from family, or second mortgages. None of these involve going to Wall Street.

The way to winning over business owners is to make a business case. In Thomas J. Stanley’s The Millionaire Next Door, he makes the case that the typical American millionaire gets there by starting a small business and then playing good defense, that is limiting outflows by not living extravagantly as the stereotypical wealthy in popular literature. This defensive mindset also plays in operation of their firms. Business owners deal constantly with people who want more: suppliers, competitors, regulators, the tax man, employees, spouses, kids, brothers-in-law. The noise floor is high.

Rising above the noise floor means doing the hard work of showing your proposed model actually works and is not merely yet another visit from the good-idea fairy. Business owners value relationships. Building relationships takes hard work. Connect motivated people from difficult backgrounds — from which many business owners themselves come — with mentors who will see and nurture the spark. Demonstrate that you are helping to provide a hand up, not a handout.

devonkimonDec 4, 2015

A small consolation of sorts, but if you give a generation or two nothing but positive, record-breaking "middle class" economic growth you wind up with Baby Boomers - years that followed a great war and for Americans the greatest economic surge perhaps on record. This is a generation whose parents were raised through the Great Depression and had every material childhood desire whittled down to stubs in mass poverty. Then you give this same generation an adult livelihood and independence with the mass advertising boom with call to actions revolving around "you deserve <product>" this does not promote the most selfless of actions.

Time and time again I've been hearing baby boomers complaining about how young people today aren't "working hard enough" along with them being "so entitled" and pointing to Zuckerberg and random stories about kids selling start-ups for millions as if these are all somehow available to them and that they're being turned stupid by technology instead of "hard work" (this is fairly standard rhetoric not just for conservatives of the generation but even fairly moderate folks in my own experience at least). Then they tend to talk about how hard they worked when they left high school, bought a house, and lived well while saving judiciously similar to the lifestyle choices made in the Millionaire Next Door book.

Setting up a generation with unrealistic economic expectations is perhaps one of the biggest double edged swords the US has wielded in its history. Great for positive energy and all, but perhaps it wasn't entirely a net positive across several generations.

jseligeronFeb 8, 2010

Read The Millionaire Next Door. Then read it again.

hbienonAug 28, 2008

I'm gonna throw a book recommendation out there: "The Millionaire Next Door".

mberginsonMay 5, 2010

Those appear to be a list of anecdotes as opposed to a real analysis of who becomes wealthy and the means of their families in America. Unfortunately, I'm not familiar enough with the social science literature to fix the reference problem, but at least from the survey work presented in "The Millionaire Next Door", many of the wealthy American surveyed there did not appear to be from family money.

asturaonMar 7, 2018

The Millionaire Next Door is not a great book - it's just survivorship bias and assumes correlation is causation.


Plus one of the authors died driving a Corvette, not a Corolla...

Like all self help books, it's about selling hope.

Furthermore, you were entirely unwarranted in making the assumption that the GP has a spending problem instead of an income problem.

apowellonApr 14, 2010

I recommend The Millionaire Next Door.

klue07onApr 20, 2016

> But recent research indicates that when people get some money—a bonus, a tax refund, a small inheritance—they are, in fact, more likely to spend it than to save it.

Not recent at all. I first read about it in The Millionaire Next Door book. Referred to as the "better than" theory [1].

Plain and simple, people don't like to save when they have the option. They like immediate reward. If you make $500 more a month after a raise, many people will reward themselves for the raise, justify buying something they've wanted, etc. After a while, the mindset that they are living just fine while spending the extra money sets in and they end up never saving the extra $500.

[1] https://en.wikipedia.org/wiki/The_Millionaire_Next_Door#.22B...

duelingjelloonJan 4, 2020

Thomas J. Stanley, a wealth researcher, wrote some books on the subject:

Stop Acting Rich

The Millionaire Next Door

There is a class of people, typically 16-25 who live at home, with minimal expenses and much disposable income he called “Gold Collar Workers.” They often buy luxury cars (usually used or salvage title) they cannot afford to repair and generally act fiscally like stockbrokers (high MPC).

OTOH, there’s another thread to this story. People who feel guilty that their material and/or monetary accumulation deprives others. It maybe a sort of victimology where people need to feel like victims to be valued in the victim hierarchy or that they have delusions of grandeur to feel self-important, like homeless people who say the FBI has a file on them.

gvajraveluonNov 28, 2017

The Millionaire Next Door is advertised as a personal finance book, but I found it useful for many other areas of life.

The central point of the book is that most millionaires live ordinary middle class lifestyles. They saved a ton of money because they don't buy expensive things.

That taught me a few things. First, you have no idea what anyone else's situation is, financial or otherwise.

Just because someone has a big house doesn't mean they're rich. They might be or they might not be. They might have a large income to buy that house, or they may have taken out huge amounts of debt to finance it. You just don't know.

The book also has great tips for careers, family, and marriage. I think it's well worth a read.

gdubsonOct 25, 2014

The book, "The millionaire next door" is based on extensive research on the consumption patterns of America's wealthiest and a surprising majority live below their means and don't play that game. They're wealthy is spite of being low earners -- in other words they play solid economic defense and often have a weaker economic offense than many. There are a lot of people driving BMWs who can't afford them, and the economic crises revealed a ton of people over-leveraged on mortages. Now, in that case there's certainly a strong argument that people were taken advantage of, and inequality is a really big problem -- I'm just not convinced the status game is something that must be played. Again, the book makes a compelling, fact based argument that frugality is a bigger determinant of wealth than high income.

akg_67onMay 4, 2017

I suggest you do some reading before getting started with investing for retirement.

Bogleheads wiki and forum has good information and knowledgeable forum participants.

In addition, following books will give you good fundamental understanding of why and what.

Your Money or Your Life, Vicki Robbins ...

Millionaire Next Door, Thomas Stanley

A Random Walk Down Wall Street, Burton Malkiel

jseligeronSep 27, 2013

Crowdfunded equity investments should be treated as gambling, don't do it unless you're willing to lose money.


With crowd-funding from the start you face an adverse selection problem, a lot of the "best" looking startups are going to take money from well respected angels and are going to fill up their seed rounds long before they need to turn to crowd-funding

I wonder about the extent to which crowdfunding is optimal for situations like startups versus the extent to which it is optimal in other fields, like real estate development (http://www.slate.com/articles/business/moneybox/2013/06/fund...).

Still, based on my reading of A Random Walk Down Wallstreet and The Millionaire Next Door, most people doing retail investing do not beat the market.

The good news in the case of crowdfunded equity investments, however, is that even if 90% fail, that last 10% may pay for some really cool stuff that wouldn't exist without the crowdfunding, in much the way that Amazon is enabling lots of people to publish shitty ebooks but it also enabling a small number of important books that wouldn't have gotten traction in the conventional system to get traction.

josscrowcroftonNov 23, 2011

Oh my god, read "The Millionaire Next Door"

I used to be on the same treadmill - making more money than I could spend but somehow spending it all - now I make less (since stopping freelancing, oddly enough), and yet save more.

I put between 10% and 30% of my income into savings - never less than 10% and sometimes more than 30% (as far as I'm concerned, that 10% doesn't exist except to be taxed upon - I can't spend it).

Bear in mind I'm in the enviable position of not having a mortgage - but I do have debts to pay and so it's a constant weigh-up asking myself "is this money going to make me more by being saved vs. going to debts?"

It sounds like you're covering everything else FIRST, then putting what's left into savings. How about putting 10% into savings first, then allowing the rest to be spent on everything else?

This only makes sense if you have plans to invest it wisely.

Read that book!

dragontameronJan 19, 2016

> TIL even millionaires look for discounts on Teslas.

Read the "Millionaire next door". The vast majority of millionaires in the US are just slightly above-average income folk who live below their income and save appropriately.

If anything, the typical millionaire will look for discounts everywhere. On the other hand, the "millionaire next door" doesn't buy Teslas, but instead buys used cars.

poulsbohemianonMar 6, 2018

Amen! I read The Millionaire Next Door when I was 22. Bought a house in a low-cost but appreciating neighborhood. Started working with an accredited financial advisor. Saved double-digit percentages of my income. Worked hard, made a six-figure income.

At forty? Here I am tens of thousands in debt, all that hard work gone. I did all the things society told me to do if I wanted to live the good life, but life can come at you in unexpected ways. For some people it is poor health, others a crazy ex and a truly unfair divorce. Businesses succeed, but sometimes they also fail.

Much like the founding story myth discussion here on HN, we might do well to hear some stories of personal financial failure as vehicles for learning.

zachruss92onJuly 13, 2018

For a nonfiction book, The Millionaire Next Door was a game changer for how I though about wealth accumulation. It's the findings of a statistical analysis of the life and habits of millionaires.

Deep Work had the similar effects on my work habits as the former did on my finances.

If you're looking for a fun fantasy read, Elantris by Brandon Sanderson is one of my all-time favorite standalone novels.

kingkongrevengeonSep 30, 2008

"The Millionaire Mind" and "The Millionaire Next Door" have hard data on this. (Mediocre books, BTW.) The answer is that high net worth individuals are predominantly low B students.

A possible explanation for this is simply that lower scoring yet ambitious students are forced to take bigger risks. Johnny A student has a decision tree with more safe salaried gigs on it, but fewer big payoffs.

I saw once that one of the better income predictors was having had more than one sexual partner in high school. I don't know how applicable this is in the top quarter of the income scale. But for people in general I think it illustrates the criticality of social skills over other factors.

jackhackonMar 8, 2019

Well, then the Economist is almost laughably wrong. This completely ignores the building and construction trades. In America, the average Millionaire drives a F150 pickup truck, not a Mercedes-Benz or BWW. (well documented in the book The Millionaire Next Door.)

Don't discount the trades.

Take the HVAC guy who just spent a morning putting in a heat pump at my neighbor's place for $6000. It was < $2000 worth of equipment (wholesale) and just he and a helper working under the house for a few hours. Let's be extraordinarily generous and subtract out half that for overhead (licensing, rent, van, advertising, insurance, taxes) and that's clearing $2k per day. $8000 per month. Owner's surely making more than the laborers, but let's just split down the middle. That's still roughly $45k per year for working 8 hrs per week. Yes, that's poverty in the coastal elite towns but a middle-class lifestyle in flyover country.

Move up to doing two such jobs per week (or even three) and a very solid upper-class lifestyle is within reach. Get a couple crews working under you doing a couple of those jobs per day, and now you're talking about a high standard of living, indeed -- vacation home on the coast/mountains and luxury vacations.

Another example: The guy who built my home is an Ivy-League MBA. After graduation he quickly discovered he couldn't tolerate sitting in a cubicle, so he turned the "side job" doing home renovations (used to help pay for his $250,000 degree) into a full-time profession. Now 20-years on, he has built hundreds of homes and is a millionaire many times over. By swinging a hammer.

parasitiusonSep 8, 2014

You guys are all wrong because you're ignorant of cascading effects. Read The Millionaire Next Door if you have to, but this does apply all the way down to things like a coffee, and of course you do have to draw the line of being a cheapskate somewhere to keep your insanity.

Case and point my car. Had a fantastic Toyota $8000. Cost me nothing in maintenance and $150/mo car payment. Told myself I am blowing $150/mo on toys why not upgrade to a 286hp high miles Acura (115,000) and really enjoy the driving that I do do instead of puttering around. If I just waste $150 less a month I'll break exactly even. Nope. Didn't work. Cascade effect. Now that I'm psychologically in my dream car, a 'luxury' car, I feel like I need to park in the covered garage, and I feel like it is okay to go to nicer restaurants because my car looks fine in the lot surrounded by other decent cars. Tires? They don't cost 2x as much but 6x as much! Brakes are 4x as much. Car insurance skyrocketed from $36/mo to $56. Oh and I have to use premium gas. This extra $150/mo car payment is the LEAST of the additional expenses the more exciting car cost me.

Same happens when you live in an upscale neighborhood or buy a nice house...it becomes infinitely easier to justify tangential expenses. Read
The Millionaire Next Door to understand this effect better.

wallfloweronMar 16, 2009

I'd love to read a book styled along the lines of "The Millionaire Next Door". Call it "The Entrepreneur in the Woodwork" - profiles/statistics on eBook sellers, ISVs (especially niche business apps), niche site owners, niche iPhone app studios, the mythical highly profitable subscription sites (salsabootcamp.com is one), the gadget blogs that make mint from affiliate links (coolest-gadgets.com), maybe even some non mainstream blogs. Cap the success level though - no outliers - Leave out the JohnChow.com Adwords or Dooce.com anomalies.

I think it might be hard to find these people to interview though. Domain records and traffic stats and presence can be false starts.

akg_67onMay 9, 2017

I suggest you do some reading before getting started with investing.

Bogleheads wiki and forum has good information and knowledgeable forum participants.



In addition, following books will give you good fundamental understanding of why and what of investing.

Your Money or Your Life, Vicki Robbins ...

Millionaire Next Door, Thomas Stanley

A Random Walk Down Wall Street, Burton Malkiel

Personally, 95% of my investment portfolio is in Index Funds/ETF. The other 5% I use as play money that keeps me engaged in investing, finance, and trying out new strategies and investments.

weirdkidonJuly 3, 2016

I would probably be considered high income/moderate wealth. I started tracking everything with Quicken back in the 90's when I realized I was just pissing it all away. I switched to MoneyDance when intuit started screwing with the Mac version of Quicken, and it does what I need. I track and categorize every expenditure and every account: cash, asset, liability, retirement, college, investment. I learned to do this from the book, "The Millionaire Next Door". They had results from a study they did that showed people who spend more time watching their money tend to have more of it over time (i.e. even if they started with little). After a while it becomes routine. I spend collectively 1-2 hours per month working on my finances.

girardyonApr 4, 2012

1) Two good incomes on the professional track.

I read a book called The Millionaire Next Door that described how getting married and staying married was one obvious way to boost wealth. Not only is divorce really expensive, but married people on average use less space per person than single people.

You can obviously construct scenarios where this isn't true—what if you marry a spendthrift?—but it was still a really interesting point.

MikeCaponeonJuly 9, 2010

It can be a risk. But a good partner can also be an asset. In the book The Millionaire Next Door, many of the interviewees credit their spouses (usually a wife) for helping them succeed and keeping expenses low.

You still have to pick the right partner, but if you can do that, it could be a big plus.

But hey, I'm getting married next month, so take what I say with a grain of salt ;)

icedchaionJune 10, 2020

I'd start by reading "The Millionaire Next Door." It basically boils down to 1) get a decent paying job, 2) live below your means, 3) save/invest the rest of your money for 20 to 30+ years.

Hitting 3 "about-to-IPO" companies that actually do IPO and also give you a decent return is very, very low probability. One of the first startups I worked for, during the dot-bom boom, went IPO. Less than two year later it was near bankruptcy. Everyone's options were under water. Maybe a couple guys cashed out a bit, but nothing life changing.

jseligeronJune 22, 2010

Most people don't become millionaires through inheritance, extreme income, and so forth; they become millionaires because they save more than they spend, usually by a substantial amount, invest widely, buy a house and keep it, and marry and don't get divorced. Stanley and Danko's book The Millionaire Next Door describes this phenomenon: http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/d... and what wealth in America actually looks like.

technofiendonJune 3, 2017

If you ever read The Millionaire Next Door you'll read a lot of very similar stories about small business entrepeneurs who had a combination of drive and opportunity to succeed, but most of all (at least emphasized by the book) sound financial principles that kept them from losing it all once they made it.

I've only spent time with one person like that - a distant uncle I acquired by marrying into my wife's family and he was exactly as described in the book. He had more money than he ever needed, but he still worked and tended to his business, he never moved out of his starter home, never bought flashy cars or did anything to display his wealth. He wasn't miserly but he just didn't see the need to waste money.

jseligeronMay 27, 2010

I was just going to say almost exactly this. The problem is that your financial advisor's purpose is probably to make money, which he or she probably does most efficiently by separating you from yours through fees. A few minutes ago I recommended the book The Millionaire Next Door, which points out how fees can quickly kill your returns, which can't beat the market over time anyway.

You have a major principle-agent problem with financial advisers, and that's why I suspect many are better off without, especially if they can find an investment column in a newspaper or something like that. Years ago I read a guy named "The Coffeehouse Investor," which helped me enormously, as did the books I recommended previously.

MrPowersonMay 22, 2021

The book The Millionaire Next Door provided data to support "Seek wealth, not money or status".

The book was written by finance professors who examined the characteristics of actual millionaires. They found a lot of people who appeared to be millionaires did not actually have a net worth over a million dollars.

High status professional are expected to drive nice cars and live in a big house. It's harder to be a millionaire if you're spending a lot of money.

The authors were surprised to find that a lot of the Americans with a net worth over a million did not fit any of the "millionaire stereotypes" at all. They drive an old pickup truck and drink Bud Light.

I like the Tweet thread, but prefer the Millionaire Next Door cause it's backed up by actual data. It also seems like the Tweet thread is focused on advice that'll get you a net worth in the top 0.1%. The central premise of the Millionaire Next Door is a lot of people have "regular jobs" and get rich (depending on your definition of rich). See the janitor that amassed an $8 million dollar fortune: https://www.cnbc.com/2016/08/29/janitor-secretly-amassed-an-...

internautonSep 25, 2016

I don't really disagree. Some of it is attitude. That and what the book the Millionaire Next Door referred to as Economic Outpatient Care.

It is just that in the past the standard of living also was raised, and the market had to bear higher costs to motivate people to work.

If you examine the pay of our grandparents and parents you see they experienced very considerable wage growth in their lifetimes while the standard of living was rising, like by a factor of 10. Roofing contractors were paid a dollar a day in 1900!

That impetus is missing from the labour market today. It is partly that some of the people mentioned in the study feel like they have better things to do, but a lot of it has to do with the trajectory and speed of wage growth.

When you feel like your prospects are 'capped', you're bound to be less motivated.

I've heard employers whining they can't find the right people in the WSJ and NYT for some time now (subtext: at subpar rates of pay) and I think this should be treated with the same reverence given to lazy bones on the coach there. None.

cmbuckonNov 27, 2017

Unshakable by Tony Robbins. Good background and some nuts and bolts about investing and how to set yourself up for success.

The Millionaire Next Door by Thomas Stanley and William Danko. Wealth generation by means of frugality. Thorough presentation of studies and research on America's millionaires what they look like and how they got to where they are now.

skookumchuckonSep 5, 2018

> Instead the typical means to wealth is inheritance or luck of birth providing access to investment capital

The typical means to wealth is spending below one's means and investing the rest.


And there's the book "The Millionaire Next Door" which shows that 85% of American millionaires are self-made, usually through spending below one's means and investing the rest.

jseligeronJan 18, 2010

Go read The Millionaire Next Door: http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/d... , which ought to be mandatory reading for anyone.

What do I do with the money?

Invest it in stocks or bonds.

How do I invest it in making more money quickly?

You don't. That's the problem: there is no way to reliably do this. In fact, there's probably no way to _unreliably_ do this either. At the moment, bank savings accounts and CDs are paying next to nothing.

As The Millionaire Next Door shows, most people who we might think of as "rich" don't actually get that way by being sports stars, or inheriting money, or TV, or whatever: they get that way by spending less than they make and saving as much as they can, usually in the form of investing in index funds.

dgacmuonMar 3, 2019

Go read "The millionaire next door" -- it's eye-opening, particularly about the relative importance of saving and keeping a cap on expenses.

Saving $500k should be trivial on the $400k annual income you describe. Dual income, put $46k per year into tax advantaged retirement accounts (401k + backdoor Roth). Wait 8 years including interest.

Edit: Found a PDF online: https://www.pdfdrive.com/the-millionaire-next-door-book-mant...

(and verified that it actually downloads).

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