I feel that this is somewhat reasonable, however, this formula has some limitations. (Apparently they have derived a more robust formula, but they don’t provide it in the book.) This means that a person who is 50 years-old and makes $90,000/year should have accumulated $450,000 in net worth. They are often millionaires because they live a more conservative lifestyle, not in spite of it.Įarly in The Millionaire Next Door, Stanley and Danko provide a very simple formula for determining how much wealth a person should have. One of the points that the authors make again and again, is that most millionaires do not live this type of lifestyle. Many people associate millionaires with high class lifestyles - including nice cars, nice clothing, shoes, and watches, expensive houses, etc. “Millionaire” is defined as a person with a net worth of $1 million or more (assets less debts, including residence). The Millionaire Next Door is based on studies and research done by two professors about millionaires in the United States. These insights provide some guidance that people who aren’t wealthy can use to build wealth and become financially independent. Danko, offers some great insights on the habits of the wealthy and common misconceptions on the lifestyles of the wealthy. The Millionaire Next Door: The Surprising Secrets of America's Wealthy, by Thomas J. The Millionaire Next Door: The Surprising Secrets of America's Wealthy by Thomas J.
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