THE MILLIONAIRE NEXT DOOR SUMMARY (BY THOMAS STANLEY)

As an Amazon Associate I earn from qualified purchases.

Animated top 5 takeaways of The Millionaire Next Door by Thomas Stanley. Describes the characteristics of a millionaire. They might surprise you …

Top 5 takeaways:
0:00 Intro
0:17 The 12 Characteristics of a Millionaire
1:39 Play Defense
3:14 The True Cost of Consumption
5:27 Cash Gifts Are Bear Favors
6:51 How to Decide if You Are on The Right Track

TL/DW:
- Frist, becoming a millionaire is a result of hard work, lifestyle decisions, planning and self-discipline, not inheritance or luck.
- The second takeaway is that you must play a great defense to accumulate wealth.
- Takeaway number 3 is that opportunity costs, both in terms of money and of time, should be added to estimate the true cost of a purchase.
- Number 4 is that cash gifts are counterproductive to accumulate wealth.
- Last but not least, number 5 is that you can decide if you are on the right track towards becoming a millionaire by taking your age, multiply it by yearly pretax income, divide it by 10 and then comparing it to your net worth.
My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there – investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties – I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process – upgrading your money-making toolbox.

[wewillmakeit]

As one who made it, I have to agree to about everything that was said. For me personally the most important factors were living below my means to save up cash. Writing down my goals. Reading a lot and learning. Sometimes it is also difficult to actually start doing something, that you only heard and read about until then. Like reading about how to find and finance real estate and then actually going out there and buy the damn thing. Its about leaving your comfort zone.
One thing I'd like to add to the list: If possible, find yourself a partner (spouse?) that has similar goals and accepts the lifestyle. Because else you will have a very hard time saving up money, while your significant other doesn't get, why you don't buy as of a nice car that the neighbors/friends have. In the end a divorce is what ruins a lot of plans and dreams. And most of those divorces are about money, I think.

[kzy]

This video describes me exactly. I grew up poor on the South Side of Chicago. My wife grew up poor in East St Louis. We graduated college with gov. grants and scholarships, started our own businesses and invested our money in real estate and the stock market. At age 59 and 50 we are now multimillionaires and live a GREAT life w/ 3 kids. There's a lot of talent in the ghetto that never gets developed.
Also, one key the video did not mention is marring someone you like and love that is like minded. So many of my colleagues have lost their foundation to build wealth due to nasty divorces.

[jumhed]

I cannot stress to any students watching this how important this is. Invest, save, budget.
'Do something today your future self will thank you for.'
If I'd followed the advice in this video/book my life would be a lot different today.

[Madcowe]

"Luck is when Opportunity meets Preparedness"

So start investing in yourself and in your own financial education, don't wait for something to land on your lap, make it fall there!

[learnsomethingneweveryday]

For those thinking luck is a major factor: Tiger Woods "The more I practice, the luckier I get"

[mikewilliams]

I have moved many times during my life. My incredibly supportive wife has gone with me from spot to spot fixing up income properties until we made enough money from that income to live in our own home. We can now live and travel as our fourth kid is in home school. I'm not the smartest person you have ever met but I realized early enough that hard work and persistence are key. I remember reading many books on sales and business but never went to college. You can do it. Don't give up

[educatedman]

I am the millionaire next door. I put myself through college and graduated with no debt. I chose a practical degree that offered a high probability of a six figure income. I married, but late in life after establishing myself in my career. I chose a woman who made as much as I did and we never had children. We live in a modest, 1, 850 square foot Cape Cod we have long since paid off. I buy late model, moderately priced used cars, pay them off in two years or less and drive them as long as possible. (My current car is a 14 year old Toyota Camry). I NEVER carry credit card debt. I began making the maximum, tax deferred contribution to a 401K as soon as I went to work. At the age of sixty four my net worth places me in the top ten percent nationwide and I have more money just in my checking account (my cash cushion) than most people in my Baby Boom generation manage to save for retirement. You don't have to be a financial genius to get here, friends. It does take planning, discipline and a practical approach to money management.

[jimboxmeyer]

Wonderful summary. That book has been a wonderful guide. Live modestly. Don't try to impress others.

[k.h.]

The rich parent who makes sure their kids have all the educational opportunity they can afford them, is in practice laying out money. It's definitely not free - just not to the kid directly. And it IS one of the privileges that poorer people cannot give their children - certainly not to the same extent.

Beyond that: great video, great advice.

[KpxUrz]

This is quite accurate. I may be one of the few who managed to lose my shirt on Manhattan real estate. I bought a small luxury condo downtown for only $152G to rent out, carried a sizable negative cash flow the whole 7 years owned, and meanwhile the value went down every year! Finally I had to move out of NYC and tried for 2 years to find a buyer at any price, and finally got a buyer at a price far below what was paid. Had I been able to keep it, of course, it would now be worth 400% or 500% the cost. Anyway, now wealthy, I look back upon my particular path and set of missed opportunities. I could actually write my own book about the path I took. Now I spend my time closely following the stock market, trade every day, and have steady income from dividends and covered calls. Incidentally, we never had highly lucrative careers, never received inheritance, etc. Mostly just lived beneath our means.

[JGULLIF]

I am 56 and I read the MND in 1997 ... take my word for it ... it works. I have taken 24 years of middle-class income and have accrued a significant amount of wealth by the strategies outlined here. Am i objectively wealthy? ... no ... Am I wealthier than 80%+ of Americans ... easily. Remember, in the US, taxes are for suckers. The government rewards savers with endless tax-breaks ... who gives a crap about income taxes? High-consumption people do ... I don't ... in fact, I only pay taxes on a fraction of what I accrue in the course of a year. I do worry about money, but in a good way (investing is fun ... and counting your gains is fun!). Also, I've been married since 1998 ... NEVER ARGUED ABOUT MONEY (we argue over other stupid shit ... never money). Why? ... because we are NOT MATERIALISTIC ... we both enjoy saving and thinking about our future.

[agusal]

“It’s like building a house on the weekdays then bringing a wrecking ball on the weekend.”

[OffGridInvestor]

If your worried about "keeping up with the Joneses" YOU'VE ALREADY

[greenbay]

The last place I'd ever expect to see Broscience show up.

[MrOccyc]

Instead of focusing on rates of return in this video, listen to the behaviors that are being discussed. Proper planning prevents poor performance.

[snowball]

Please do not use beeps on 'bad words'(it is very loud) or at least put it a little down the volume. Amazing videos man. Good job!

[SanVB]

Number 3 is SO arguable. Many times its called enjoying!

[charlesmosley]

I did read the book and still own it. I am a millionaire but I will say that I disagree about keeping a budget. I did not want to work hard every day and then have to watch how and when I spent my money. The last time I kept a budget, I was in the Marines over 30 years ago. I dropped budgeting after the Corps, despite having a wife and children. That being said I have managed to maintain decent to great incomes. I also enjoy my work. I have owned businesses in the past, although I have continued full time work in a high paying profession. So, I have put in many hours of work in my lifetime. The key to not having a budget is to live a little below your means. Not that my wife and children didn’t have a great lifestyle, because they did. I just don’t do stupid stuff with money, just because I have it. Also, begin investing when you are young. Invest in sound business ventures. I did go to business school. That helped. College does teach you things, despite what folks are saying about college education these days. Professor’s have knowledge, you just gotta tap into it.

[rajeshasher]

Your book summaries are quite informative. Thanks a lot. Please consider making a video for the book Die with zero.

[mathisnotforthefaintofheart]

2:35 People do forget that houses in an upscale neighborhood typically also have (much) better public school districts. At least this is how it is in the USA. So if you have kids going to school, it actually DOES pay to go for a some sort of "upscaley" neighborhood. Chances are your kids have easier access to good colleges because the high school was better. And spending more on a nice house is certainly worth more than paying a fortune to some private school, especially if you have more than one child. Of course, it should all be within your budget, but schooling matters....a lot!