“The Millionaire Next Door” is a 1996 book that is a compilation of research done by the two authors in the profiles of American millionaires. They found that millionaires are disproportionally clustered in middle-class and blue-collar neighborhoods and not in more affluent or white-collar communities.
Most of the millionaire households researched by the authors did not have extravagant lifestyles. These millionaire households spent surprisingly little on such things as cars, watches, clothing and other luxury products or services. Basically, they lived below their means.
Perhaps the most significant difference between the accumulators of wealth and the rest of society is that the accumulators saved today’s cash for tomorrow, while the less financially successful spent tomorrow’s cash today.
Building wealth is not easy or quick. Neither is losing weight. There is an old Chinese saying, “a journey of a thousand miles begins with a single step” that teaches that even the longest and most difficult ventures have a starting point.
Investors, and would be investors, should bear in mind that successful ventures typically require perseverance and an extended time horizon.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA
