101 Quotes from The Millionaire Next Door

The Millionaire Next Door is one of the best selling finance books in history.

It’s helped millions learn to improve their financial literacy and build wealth.

Here are 101 of my favourite quotes from The Millionaire Next Door, by Thomas Stanley & William Danko.

1. It matters less how much more you make than what you do with what you already have.

2. The advertising industry and Hollywood have done a wonderful job conditioning us to believe that wealth and hyper consumption go hand in hand.

3. Allocating time and money in the pursuit of looking superior often has a predictable outcome: inferior economic achievement.

4. Whatever your income, always live below your means.

5. According to our most recent survey, the typical American millionaire reported that they never spent more than $399 for a piece of clothing for themselves or for anyone else.

6. It’s easier to purchase products that denote superiority than to actually be superior in economic achievement.

7. Wealth is often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.

8. In general, the longer the average member of an ancestry group has been in America, the more likely he or she will become fully socialised to our high-consumption lifestyle.

9. Many people who live in expensive homes and drive luxury cars do not actually have much wealth.

10. Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires.

11. Good health, longevity, happiness, a loving family, self-reliance, fine friends … if you have five, you’re a rich person…

12. Investing when one has little or no intellectual basis for one’s decisions often translates into major losses.

13. Wealth is not the same as income.

14. Mr. Friend never really enjoys his life. He owns a lot of upscale things, yet he works so hard and for so many hours during a typical day that he has no time to enjoy them.

15. Great offence and poor defence translate into under accumulation of wealth.

16. Without Social Security benefits, almost one-half of Americans over sixty-five would live in poverty.

17. Many people who have a great deal of wealth do not even live in upscale neighbourhoods.

18. It is unfortunate that some people judge others by their choice in foods, beverages, suits, watches, motor vehicles, and such. To them, superior people have excellent tastes in consumer goods.

19. If your goal is to become financially secure, you’ll likely attain it. But, if your motive is to make money to spend money on the good life, you’re never gonna make it.

20. Often dull industries don’t attract a great deal of competition, and demand for their offerings is not usually subject to rapid downturns.

21. It’s easier to accumulate wealth if you don’t live in a high-status neighbourhood.

22. Having a set of stated goals does not necessarily mean that one is committed to achieving them.

23. Financially independent people are happier than those in their same income/age cohort who are not financially secure.

24. The median household in America has a net worth of less than $15,000. More often than not the household has zero financial assets, such as stocks and bonds. How long could the average American household survive without a monthly check from an employer?

25. One of the reasons that millionaires are economically successful is that they think differently.

26. No one can control the stock market. But you can, for example, control your own business, private investments, and money you lend to private parties.

27. What are three words that profile the affluent? FRUGAL. FRUGAL. FRUGAL.

28. 95% of the millionaires we surveyed own stocks. Most have 20 percent or more of their wealth in publicly traded stocks.

29. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high.

30. Have you ever noticed those people whom you see jogging day after day? They are the ones who seem not to need to jog. But that’s why they are fit.

31. The foundation stone of wealth accumulation is defence, and this defence should be anchored by budgeting and planning.

32. Those who are wealthy work at staying financially fit. But those who are not financially fit do little to change their status.

33. If you’re not yet wealthy but want to be someday, never purchase a home that requires a mortgage that is more than twice your household’s total annual realised income.

34. Affluent people typically follow a lifestyle conducive to accumulating money.

35. It’s amazing what you can do when you set your mind to it.

36. You would be wrong to assume that millionaires trade their stocks. Most don’t follow the ups and downs of the market day by day. Most don’t trade stocks in response to daily headlines in the financial media.

37. A millionaire has told me that true diversity has much to do with controlling one’s investments.

38. There is an inverse relationship between the time spent purchasing luxury items such as cars and clothes, and the time spent planning one’s financial future.

39. Be tough … life is. In other words, there is no promise of a rose garden.

40. Yet, like so many of today’s high-income-producing couples, Robert and Judy have only a fraction of Mrs. Rule’s wealth. They feel that consumption controls them, not the other way around.

41. You’ll be surprised how many sales calls you can make when you have no alternative except to succeed.

42. Unfortunately, most Americans think that they are emulating the rich by immediately consuming any upward swing in their cash flow.

43. Wealth is what you accumulate, not what you spend.

44. Once you’re in a high-income bracket, say $100,000 or $200,000 or more, it matters less how much more you make than what you do with what you already have.

45. What if he had taken full advantage of the tax-advantaged benefit from the time he was first employed? Today he would be a millionaire. Instead, he is on the perpetual earn-and-consume treadmill.

46. After twenty years of studying millionaires across a wide spectrum of industries, we’ve concluded that the character of the business owner is more important in predicting his level of wealth than the classification of his business.

47. Money should never change one’s values…

48. Small expenses become big expenses over time. Small amounts invested periodically also become larger investments over time.

49. It is very difficult for a married couple to accumulate wealth if one is a spendthrift.

50. Most of us want to be wealthy, but most of us don’t spend the time, energy, and money required to enhance our chances of realising this goal.

51. Our youth are told that buying expensive items is normal behaviour for affluent people. They’re led to believe that the wealthy have a high-consumption lifestyle. They learn that hyper spending is the main reward for becoming affluent in America. Why?

52. All too often high-income-producing UAWs (Under Accumulators of Wealth) spend countless hours studying the market, but not the stock market. They can tell you the names of the top auto dealers, but not the top investment advisors.

53. A household divided in its financial orientation is unlikely to accumulate significant wealth.

54. For the purposes of wealth building, income doesn’t matter that much.

55. Making money is only a report card. It’s a way to tell how you’re doing.

56. UAWs can tell you how to shop and spend. But they can’t tell you how to invest. They know the styles, prices, and availability at various car dealers. But they know little or nothing about the various values of equity market offerings.

57. Operate your household like a productive business.

58. If you’re not financially independent, you will spend an increasing amount of your time and energy worrying about your socioeconomic future.

59. America is still the land of opportunity.

60. UAWs tend to live above their means; they emphasise consumption. And they tend to de-emphasise many of the key factors that underlie wealth building. YOU.

61. Multiply your age times your annual household income. Divide by ten. This, less any inherited wealth, is what your net worth should be.

62. Would you like to be Mr. Friend? His lifestyle is appealing to many people. But if these people really understood Mr. Friend’s inner workings, they might evaluate him differently.

63. Over the past thirty years I’ve consistently found that 80 to 85 percent of millionaires are self-made.

64. Mr. Friend is possessed by possessions. He works for things. His motivation and his thoughts are focused on the symbols of economic success.

65. Powerful ideas are just in your pocket.

66. What is the effect of cash gifts that are knowingly earmarked for consumption and the propping up of a certain lifestyle?

67. Before you can become a millionaire, you must learn to think like one.

68. Most millionaires measure their success by their net worth, not by their realised income.

69. His view of millionaires is shared by most people who are not wealthy. They think millionaires own expensive clothes, watches, and other status artefacts. We have found this is not the case.

70. We find that the giving of gifts is the single most significant factor that explains lack of productivity among the adult children of the affluent.

71. You must learn how to motivate yourself to counter fear with courage.

72. Those who are not wealthy are less likely to shop, haggle, and negotiate than those who are millionaires.

73. How can well-educated, high-income people be so naive about money?

74. Car-buying behaviour does indeed help explain why some people are wealthy while most are not and never will be.

75. For every millionaire who owns a $1,000 suit, there are at least six owners who have annual incomes in the $50,000 to $200,000 range but who are not millionaires.

76. We have noted many times that entrepreneurs account for a disproportionately large share of the millionaires in America.

77. Making critical decisions about your career, business, investments and other resources conjures up fear. Fear that is part of the process of becoming a financial success.

78. Overall, the self-employed spend more time planning their investment strategies than those who work for others.

79. Being a well-educated, high-income earner does not automatically translate into financial independence. It takes planning and sacrificing.

80. Most millionaires who are PAWs (Prodigious Accumulators of Wealth) are self-employed.

81. Courage can be developed. But, it cannot be nurtured in an environment that eliminates all risks, difficulty, and dangers.

82. Being self-employed gives one much more control over one’s economic future than does working for others.

83. If you want to catch a cold, hang out with sick people. If you want to lose, associate with losers. But if you want to become successful, go out of your way to associate with successful people.

84. There are no limits on the amount of income you can make.

85. First-generation Americans tend to be self-employed. Self-employment is a major positive correlate of wealth.

86. What is risk? Having one source of income.

87. Most people will never become wealthy in one generation if they are married to people who are wasteful.

88. Never tell children that their parents are wealthy.

89. I am not impressed with what people own. But I’m impressed with what they achieve.

90. PAWs are more likely to invest in categories that usually appreciate in value but do not produce realised income.

91. A couple cannot accumulate wealth if one of its members is a hyper consumer.

92. Planning is only one of many key ingredients in building wealth.

93. Always strive to be the best in your field.

94. Don’t chase money. If you are the best in your field, money will find you.

95. To build wealth, minimise your realised income and maximise your unrealised income.

96. Planning is typically found to be a strong habit among people who have a demonstrated propensity to accumulate wealth.

97. The some college, four-year college graduate, and no college types who have high incomes often had a head start on many well-educated workers.

98. People become millionaires by controlling their budget and maintaining their affluence in the same way.

99. What you probably don’t know is that your neighbor in the $300,000 house next to yours bought his house only after he became wealthy. You bought yours in anticipation of becoming wealthy. That day may never come.

100. Planning and wealth accumulation are significant correlates even among investors with modest incomes.

101. Building a business is like building a home. If the foundation rests on an unstable setting, it doesn’t matter if the rest of the home is perfect. It will never be a joy to its owner.

Thanks for reading! Be sure to subscribe (it’s free!) for more financial wisdom every week.