The Millionaire Next Door by Thomas Stanley
Reading The Millionaire Next Door by Thomas Stanley has been an eye-opening and, honestly, life-changing experience. It’s not just a book about how millionaires live; it’s a deep dive into the habits, choices, and mindsets that allow people to accumulate significant wealth over time—many of them quietly and without any of the flash we typically associate with the rich.
One of the central themes is the difference between Prodigious Accumulators of Wealth (PAWs) and Under Accumulators of Wealth (UAWs). PAWs are those who accumulate far more wealth than expected for their income and age. They live well below their means, invest prudently, and avoid lifestyle inflation. On the other hand, UAWs often have high incomes but spend in ways that keep them from truly growing their wealth. What hit me hardest was how straightforward these millionaires’ habits are—nothing fancy, just solid, consistent behaviors that most of us can adopt.
A few highlights from the book really stand out, especially for anyone just starting their career. Stanley shares data showing that most millionaires don’t live in high-end neighborhoods, drive luxury cars, or wear expensive clothes. They accumulate wealth by living frugally, budgeting, and making smart investment decisions. For someone starting out, this book is invaluable because it teaches that wealth is built on discipline, not on luck or a high salary.
But this book isn’t just for young professionals—it’s also incredibly useful for people well into their careers. I’ve seen firsthand how these lessons apply across the board. It reminds me of an experience I had with a wealthy individual here in South Africa. My jaw literally dropped when I found out how much wealth this person had accumulated. They drove around in an old bakkie (van) for their work and, on some occasions, a Kia Picanto—nothing flashy at all. Yet, this person owned more than 40 rental properties and was involved in businesses worth tens of millions. I remember many conversations where they shared simple yet powerful lessons with me. One that sticks with me is: “Learn to go without.” It was a reminder that if something is a want and not a need, you can live without it. It’s about making prudent decisions over long periods, which is exactly what Stanley’s research shows and what Charlie Munger teaches. The wealthy build their fortunes through patience and good habits—nothing fancy, just consistent and deliberate actions.
What makes The Millionaire Next Door resonate even more is how I’ve seen these principles play out in the lives of many wealthy individuals in South Africa. So many people here live seemingly simple, even boring lives, yet they’ve accumulated significant wealth through their habits. It goes back to an observation I made in a previous book review I did on the Stoic philosopher Seneca: “We are the parents of our future and the children of our past.” Our financial situation isn’t dictated by external circumstances, like living in South Africa or a difficult economy. It’s about the choices we make, the habits we develop, and the discipline we exercise over time.
This book drives home the point that we are responsible for our own financial outcomes. The more I learn about people who accumulate wealth, the clearer it becomes that their success is rooted in simple, consistent actions. The Millionaire Next Door is a must-read for anyone, whether you’re just starting your career or rethinking your financial strategy later in life. The lessons are timeless, and they’ve definitely had a lasting impact on how I view wealth-building and my own financial journey.
Read my review on another one of Dr Thomas J Stanley’s books and one I find to have some good insights “The Millionaire Woman Next Door” If you think about it, women are surprisingly savvy when it comes to handling their personal finances and this book is no doubt a wealth information for someone wanting to learn how to be better at managing their personal finances.