Table Of ContentThe Next
Millionaire
Next Door
Also by Thomas J. Stanley
Marketing to the Affluent
Selling to the Affluent
Networking with the Affluent and Their Advisors
The Millionaire Next Door (with William D. Danko)
The Millionaire Mind
Millionaire Women Next Door
Stop Acting Rich
The Next
Millionaire
Next Door
Enduring Strategies
for Building Wealth
THOMAS J. STANLEY, PhD, and
SARAH STANLEY FALLAW, PhD
Guilford, Connecticut
In loving memory of my father, Thomas J. Stanley;
to my courageous mother, Janet G. Stanley; and
to Tim, Anna, Kate, and Julie
An imprint of The Rowman & Littlefield Publishing Group, Inc.
4501 Forbes Blvd., Ste. 200
Lanham, MD 20706
www.rowman.com
Distributed by NATIONAL BOOK NETWORK
Copyright © 2019 by Affluent Market Institute, Ltd. and Sarah Stanley Fallaw, PhD
All rights reserved. No part of this book may be reproduced in any form or by any electronic or
mechanical means, including information storage and retrieval systems, without written permission
from the publisher, except by a reviewer who may quote passages in a review.
British Library Cataloguing in Publication Information Available
Library of Congress Cataloging-in-Publication Data
Names: Stanley, Thomas J., author. | Fallaw, Sarah Stanley, author.
Title: The next millionaire next door : enduring strategies for building wealth / Thomas J. Stanley,
PhD, and Sarah Stanley Fallaw, PhD.
Description: Guilford, Connecticut : Lyons Press, [2018] | Includes bibliographical references.
Identifiers: LCCN 2018030576 (print) | LCCN 2018033317 (ebook) | ISBN
9781493035366 (ebook) | ISBN 9781493035359 (hardcover)
Subjects: LCSH: Rich people—United States. | Millionaires—United States. | Wealth—
United States. | Finance, Personal—United States.
Classification: LCC HC110.W4 (ebook) | LCC HC110.W4 S733 2018 (print) | DDC
332.024/010973—dc23
LC record available at https://lccn.loc.gov/2018030576
The paper used in this publication meets the minimum requirements of American National
Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI/
NISO Z39.48-1992.
Printed in the United States of America
Contents
List of Tables and Figures . . . . . . . . . . . . . . . . . . . . . . . . . . .vi
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ix
Chapter 1: The Millionaire Next Door Is Alive and Well . . . . . . . . . . .1
Chapter 2: Ignoring the Myths . . . . . . . . . . . . . . . . . . . . . . . 31
Chapter 3: Influences on Wealth. . . . . . . . . . . . . . . . . . . . . . . 58
Chapter 4: Freedom to Consume . . . . . . . . . . . . . . . . . . . . . . 92
Chapter 5: Strengths for Building Wealth . . . . . . . . . . . . . . . . . 121
Chapter 6: Getting to Work . . . . . . . . . . . . . . . . . . . . . . . . 162
Chapter 7: Investing Resources . . . . . . . . . . . . . . . . . . . . . . 198
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
Appendix A: Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
Appendix B: Rankings of Sole Proprietorships by Percentage
Profitable (1998 & 2015) . . . . . . . . . . . . . . . . . . . . . . . 237
Appendix C: Selected Job Titles of Moonlighting Mass
Affluent Prodigious Accumulators of Wealth . . . . . . . . . . . . . 244
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
List of Tables and Figures
Figure: Ratio of Mean to Median Net Worth for
Years Available. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1-1. Percentage of Income Received through Trusts, Estates, and
Inheritance in Previous Year by Percentage of Millionaires
(1996 & 2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1-2. Career-Lifestyle Groups of Affluent Sample . . . . . . . . . . . . . . 20
3-1. Early Experiences of Millionaires. . . . . . . . . . . . . . . . . . . . 66
4-1. Most Important Reasons for Latest Home Purchase by Millionaires. . 95
4-2. Least Important Reasons for Latest Home Purchase by Millionaires. . 96
4-3. Purchase Price and Current Home Values for Millionaire
Homeowners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
4-4. Percentage of Millionaire Homeowners with and without Estate/
Trust Income by Original Purchase Price of Home. . . . . . . . . . 101
4-5. Percentage of Millionaire Homeowners with and without Estate/
Trust Income by Current Market Value of Home. . . . . . . . . . . 101
4-6. Total Median Cost of Homeownership by Month and
Satisfaction Indicators for Selected US Cities (2012). . . . . . . . . 102
4-7. Budgeting & Frugality of Prodigious Accumulators of
Wealth vs. Under Accumulators of Wealth . . . . . . . . . . . . . . 105
4-8. Most Paid by Millionaires for Clothing and Accessories:
1996 to 2016 (in 2016 Dollars) . . . . . . . . . . . . . . . . . . . . 106
4-9. Most Spent by Millionaires for Jeans, Sunglasses,
and Furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
4-10. Top Makes of Motor Vehicles of Millionaires (1996 & 2016). . . . 111
4-11. Model Year Cars by Percentage Owned by Millionaires
(1996 & 2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
List of Tables and Figures
4-12. Percentage of Income Spent on Categories by Millionaires . . . . . 118
4-13. Charitable Deductions as a Percentage of Size of Estate . . . . . . 119
5-1. Categories of Wealth-Related Behavioral Patterns . . . . . . . . . . 129
5-2. Discipline Related to Wealth Status: Under Accumulators
of Wealth vs. Prodigious Accumulators of Wealth . . . . . . . . . . 132
5-3. Education Levels of Millionaires (1996 & 2016) . . . . . . . . . . . 142
5-4. Percentage of College-Educated Millionaires by
Type of College . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
5-5. Success Factors: Percentage of Millionaires Endorsing
as Important or Very Important (1998 & 2016). . . . . . . . . . . . 146
5-6. Hours Spent Per Month in Selected Activities for Under Accumulators of
Wealth vs. Prodigious Accumulators of
Wealth (1996 & 2016) . . . . . . . . . . . . . . . . . . . . . . . . 156
5-7. Hours Spent Per Month in Selected Activities for Under Accumulators
of Wealth vs. Prodigious Accumulators of Wealth . . . . . . . . . . 157
5-8. Hours Spent Per Week in Selected Activities: Millionaires
vs. American Population. . . . . . . . . . . . . . . . . . . . . . . . 157
5-9. Time Spent in Previous Week on Selected Activities by
Percentage of Millionaires. . . . . . . . . . . . . . . . . . . . . . . 158
5-10. Time Spent Thinking about Selected Topics by Percentage
of Millionaires. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
5-11. Percentage of Prodigious Accumulators of Wealth and
Under Accumulators of Wealth Spending Time Worrying
About Selected Topics in Past Week . . . . . . . . . . . . . . . . . 160
6-1. Selected Millionaire Job Titles . . . . . . . . . . . . . . . . . . . . 165
6-2. Sources of Income for Millionaires . . . . . . . . . . . . . . . . . . 173
6-3. Career Strategies & Choices of Self-Employed Millionaires
vs. Other Millionaires . . . . . . . . . . . . . . . . . . . . . . . . . 189
vii
List of Tables and Figures
7-1. Percentage of Assets Held by Millionaires . . . . . . . . . . . . . . 200
7-2. IRS Estate Tax Data Comparing 2016 and 1996 Estate Tax Returns. 201
7-3. Investing Statements by Millionaires’ Agreement. . . . . . . . . . . 210
7-4. Average Holding Periods for Investments. . . . . . . . . . . . . . . 210
7-5. Investing Strategy of Millionaires by Percentage . . . . . . . . . . . 211
7-6. Reported Investing Behaviors of Millionaires. . . . . . . . . . . . . 214
Appendix B: Rankings of Sole Proprietorships by Percentage Profitable
(1998 & 2015). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
This publication is designed to provide accurate and authoritative information
in regard to the subject matter covered. It is sold with the understanding that
neither the author nor the publisher is engaged in rendering legal, investment,
accounting, or other professional services. If legal advice or other expert assistance
is required, the services of a competent professional person should be sought.
Most of the names in the case studies contained in this book are pseud-
onyms used to protect the privacy of the individuals involved.
viii
Preface
For nearly 40 years, my father, Thomas J. Stanley, studied the affluent in America
to discover and highlight paths to financial independence and economic success
that did not depend on inheritances or other large monetary gifts. He found in
his work some universal components, but also saw that there were many paths to
wealth involving many unique career, consumer, and business choices.
Despite the evidence-based financial planning principles embodied in his
book The Millionaire Next Door and the tried-and-true paths to wealth accumu-
lation that have been documented quite clearly, many people continue to ask,
“How come I am not wealthy?” Whether you’re a small business owner, teacher,
attorney, or sales professional, a disciplined, methodical approach to building
wealth has been proven to work. As my father wrote in The Millionaire Next Door,
“They [the millionaires profiled in the book] did it slowly, steadily, without sign-
ing a multimillion dollar contract with the Yankees, without winning the lottery,
without becoming the next Mick Jagger.”1
This slow and steady approach applies to many of life’s challenges, such as
learning a new skill, getting or staying in good physical shape, raising children, or
starting a new business. Achieving any major goal—including financial indepen-
dence—requires disciplined action over time, an awareness of one’s own abilities,
and the effective allocation of resources.
But a desire for a certain type of lifestyle—one with a requisite level of con-
sumption and displayed status—still makes the journey difficult for most of us. A
lifestyle that is dictated by what others do, drive, and wear cannot be sustained by
most without a steady fire hose of incoming cash flow. Many of us simply accept
our current habits, or refuse to do the hard work to change them, all the while
complaining and often giving in to a life of dependency and worry.
Despite the protestations of some critics of his work, my father was not naïve
and stated very clearly that the odds of becoming extraordinarily wealthy while
starting with nothing were not very high. But his research demonstrated time
and again that behaviors can change one’s circumstances, and his life was just
such a story. He had meticulously and consistently changed the way he behaved
in order to become financially independent and overcome his incredibly humble
beginnings.
ix
