The book is based on extensive research by the authors into the habits and behaviors of American millionaires (individuals with a net worth of over $1 million, excluding their primary residence).
Most millionaires do not live extravagant lifestyles and do not outwardly display their wealth through material possessions like luxury cars, clothes, and homes in upscale neighborhoods.
Millionaires tend to live modestly, below their means, and often reside in middle-class communities. They drive used, reliable cars and do not wear flashy designer clothes or jewelry.
The typical millionaire owns a small business or is self-employed, generating their wealth through entrepreneurship rather than relying on a corporate salary. Only about 20% actually accumulated their wealth as employees.
Millionaires exhibit disciplined financial habits, responsible money management, and the ability to delay gratification in pursuit of long-term goals. They spend wisely and optimize their time to build wealth.
Millionaires spend more time on networking, managing finances, education and career development compared to non-millionaires who spend more leisure time on entertainment.
Millionaires accumulate their wealth slowly over many decades. Their net worth peaks in their 50s and 60s after decades of saving and investing.
Millionaires believe financial independence, not material possession, is the key to true wealth. The adult children of millionaires do not receive large inheritances. Millionaire parents emphasize hard work, education, and financial independence.
Most millionaires are self-made and did not inherit their wealth. Around 80% of millionaires can be considered first-generation millionaires.
Self-made millionaires tend to have higher levels of education, using it to secure high-paying jobs or run successful businesses.
Heirs of millionaires may have occupations that require less education or skill specialization, relying on their inherited wealth instead.
Key wealth-building strategies include entrepreneurship, choosing high-paying careers, investing wisely, and consistently saving money.
Millionaires avoid hyperconsumerism (spending lavishly on consumer goods to display wealth).
Millionaires have their financial goals clearly defined. Hyperconsumers are motivated by social status and prestige.
Millionaires are avid comparison shoppers, spending a considerable amount of time researching and comparing prices before making a significant purchase. They take advantage of sales, negotiate prices, and are not easily swayed by marketing tactics.
Millionaires have a healthy skepticism about investing in consumer goods that don't appreciate in value. They invest in assets.
Millionaires tend to spend significantly less on cars relative to their affluence, while non-millionaires often spend beyond their means to project a higher social status. This phenomenon is called asymmetric spending.
Millionaires buy cars for utility rather than status appeal. They are mindful of the depreciation and costs associated with luxury cars, such as higher insurance premiums and maintenance expenses. They care more about reliability and quality than flashiness.
They prefer functional, affordable clothing and are not concerned with designer brands or extravagant fashion statements. Their clothing choices reflect their focus on value rather than status.
Millionaires practice frugality when it comes to leisure activities and entertainment. They enjoy low-cost or free activities such as reading, exercising, and spending time with family. They prioritize experiences and relationships over lavish outings.
The wealthy who did not earn their money are more likely to be hyperconsumers. Those with inherited wealth spend more.
The frugality of millionaires is not driven by a desire to hoard money or a lack of enjoyment in life. Instead, frugality is seen as a tool for wealth accumulation and financial independence.
Millionaires think differently about time, energy and money compared to under accumulators of wealth. Millionaires follow the principle: “You reap what you sow”. They invest time and energy in activities that generate wealth.
Millionaires typically develop multiple streams of income through business and investments. Under accumulators rely only on wages.
Education and self-improvement are vital for millionaires. They allocate time for continuous learning, attending seminars, and networking within their professional communities to enhance their knowledge and expand their opportunities.
Millionaires are meticulous in tracking their expenses, maintaining a budget, and avoiding unnecessary waste. They view money as a tool to be managed and leveraged effectively.
Millionaires tend to avoid excessive debt and focus on building assets instead. They understand the importance of living below their means and utilizing their income to invest and build wealth. They prioritize long-term financial security over short-term gratification.
Provision of economic outpatient care (financial assistance provided by parents to their adult children) can prevent the recipients from developing financial discipline and a strong work ethic. They may become accustomed to a lifestyle beyond their own means and fail to learn the necessary skills for financial independence.
Parents should focus on providing their children with the necessary tools for success, such as education, guidance, and values, rather than ongoing financial support.
Millionaires believe in nurturing self-discipline and determination in their kids.
Millionaires have their children do household chores to instill a strong work ethic from a young age.
Millionaires focus on finding one's niche and developing specialized skills or knowledge in a particular field. This niche can be in various fields such as business, entrepreneurship, technology, or a specialized profession.
By becoming experts in their specific field, they can provide unique value and command higher compensation.
Many millionaires have built successful businesses by identifying an unmet need or a gap in the market and developing specialized products or services to address that need.
It's better to be a specialist than a generalist.
Millionaires understand that success often requires overcoming challenges and setbacks. They are persistent in pursuing their goals and are willing to adapt and innovate.