Book Review: The Millionaire Next Door

BOOK: The Millionaire Next Door
AUTHOR: Thomas J. Stanley, William D. Danko
SEXINESS: 4 Thumbs ups! (toes count)

Tied for my all-time favorite financial book! Where as The Automatical Millionaire (the other favorite) shows you HOW to reach your goals, this book helps get your "financial mind" positioned right - and does so brilliantly!

There's one defining concept portrayed throughout:
Always live below your means.

You do this, no matter your age, salary, etc, and your wealth will grow exponentially - and so will your peace of mind :) That's not to say you can't be a millionaire AND have fancy things, of course, but just that these guys choose not to.

Even if you DO earn a crazy high income, it doesn't necessarily mean you'll be rich (aka have a high net worth). The same holds true with the highly educated:

"How can well-educated, high-income people be so naive about money? Because being a well-educated, hight-income earner does not automatically translate into financial independence. It takes planning and sacrificing"

Amen brother. If only they knew about our blogs! haha ... So who are these Pimps?

According to Stanley & Danko, the average millionaire is:

• 57 years old, Male, and married with 3 children. 70% of them earn 80% or more of their household income.
• Self-employed (2/3rds of them). 1 in 5 are retired.
• A homeowner. 97% of them own homes, which are valued around $320,000.
• First-generation affluent (80%) - meaning they are self-made millionaires, not because they inherited all their money.

And, on average, they:

• Invest nearly 20% of their household realized income EACH YEAR.
• Have total annual realized (taxable) incomes of $131,000, with average incomes at $247,000.
• Live well below their means, wear inexpensive suits and drive American-made cars.
• Have wives who are planners and meticulous budgeters. (they know what's up! Sexy all the way baby... i don't care what others say).
• They have a "go-to-hell fund" - basically, enough to quit working for 10+ years if they really wanted.
• And, are mostly tightwads! haha... hence, one of the main reasons they agreed to complete a long questionnaire for a few crispy dollar bills.

This is all broken down throughout the chapters, so if you get bored with one pile of stats, you can easily move on to others. They also categorize high earners into what they call PAWS and UAWS, and then compare the differences between them. PAWS are "Prodigious accumulator of wealth", and UAWS are "Under accumulator of wealth". You want to be a PAW ;)

In all honesty, reading this book has become the financial ying to my yang. It goes right up there with the purchase of our house and living off a budget - I love it! You really do get to know their way of life, and it really sticks.

The ONLY thing i'd like to see is an updated version of this bad boy. While i'm sure this "way of life" hasn't changed much over the years, i bet the stats sure have! A ton of stuff has happenend since this book published in 1996. (You hear that Stanley & Danko? If you do this for me, I promise you 1 (one) sale of this new book)

I totally recommend this book to anyone interested in furthering their financial education. A+ baby, all the way!

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* You can buy the book here: The Millionaire Next Door
* And you can check out other book reviews here: Book Reviews

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Book Review: A Million Bucks by 30

BOOK: A Million Bucks by 30
AUTHOR: Alan Corey
SEXINESS: 17 (that's a lot)

I think someone cloned me, and wrote a book! haha... well, in the writing style that is - I'm def. not as brave and/or close to reaching that $1Million mark! A very fun read though, nonetheless. I can say one thing, it def. won't be like any other financial books out there, that's for sure ;)

Remember how I posted about my millionaire to-do list earlier? Well, think of this book as the final product of that, but with a totally different approach to it. Along with a healthy mix of adventure, and college spirit!

That being said, I wouldn't say this is for everyone. While his stories and tips are pretty damn fascinating, it's definitely for a "younger" audience (think early 20's, 30's). I'm not sure the "mature" kind would allow for such humor and select curse words scattered about. But, then again, if you're even on my blog reading this, it might be exactly what you're looking for ;)

Here's an excerpt from one of his "extreme cheapskate strategies":

"Buy one pair of multipurpose shoes a year. Don't buy any others. If shoes make or break you with any business deal, date, or interview, believe me, unless it's a girl with a foot fetish, it isn't the shoes."

Haha...see, totally funny! AND budget conscious. Without going too much into it, here are four key ingredients which helped him along his journey:

1. He's frugal. And I'm not talking about a little here and there, i'm talking about hardcore frugalness. The king of Ramen, and the master of ghetto living - all in the name of saving $$$.
2. He does his research. This is probably key #1 to his accomplishments, he doesn't do anything without consuming all he can on the subject.
3. He buys real estate. Mainly to "flip" or to rent out as an investment. This is especially where #2 above comes in - if you know what you're doing, there's money to be made.
4. He's extremely outgoing. If there's anything this guy has that sets him apart from all other wannabe millionaires out there - this is it. It takes a LOT of guts to do *most* of the things he talks about in this book, and there's no way it can be done w/ out this trait. Did I mention he's a self-proclaimed "Reality Whore"?

To be honest, that's really the whole kit and caboodle. You mix that with some personal tips and a butt-load of crazy adventures, and you've got your self a nice little read here. And there's something to be said for the way he conveys his messages. He's actually a really intelligent guy (in case i've already scared you away):

"I like to think that making a million dollars is like losing fifty pounds: Both
provide new freedoms and options to the people who achieve these goals, but
neither of these objectives can be achieved overnight...Just like there is no
product that will help you lose twenty pounds in a week, the chances that you'll
make a ton of cash overnight are pretty slim (so to speak)."

He doesn't go too much into step by step processes such as The Automatic Milionaire, but it's definitely a great motivational read. And while I, personally, don't have the balls to follow through with such tenacity, i'd be lying if i said it didn't get me to revisit my game plan!

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* You can buy the book here: A Million Bucks by 30
* And you can check out other book reviews here: Book Reviews

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I want to be an Automatic Millionaire!

BOOK: The Automatic Millionaire
AUTHOR: David Bach
SEXINESS: To the max!

The fastest book i've ever read! And this is super impressive as a) i'm a sloooooooow reader, and b) it wasn't even a fiction book! haha... of course, i did just come back from a 4 hours plane trip :) But still, there was no way i'd finish it if it wasn't interesting in the least.

Was i impressed? Y-E-S. I give it an A+ overall! SUPER easy to read, SUPER easy to follow, and SUPER easy to act on. I'm a big fan of action over theory (most times), and the author listed simple step-by-step items to follow after each chapter. Which also makes it easy to put down, and pick up at any time. And unless you're already a millionaire, i'd recommend at least skimming it at the bookstore.

The general concept: Save at least 10% of all income for yourself, and automate EVERYTHING. he breaks it all down nicely, and even gives out the names and contact info of those he rates as pretty high.

According to Bach, there are only 3 things you REALLY need to do:

1. Decide to pay yourself first 10% of what you earn - We've all heard it, but not everyone follows it. Pick a % that works for you (he recommends at least 10%, but even 2% is a start), and let it build. automate it.
2. Make it automatic - Set up direct-deposits from your paycheck into your retirement fund. Automate cash xfers into your "rainy day fund" (3 months of expenses). Automate bill payments through your checking acct. Basically, handle all financial transactions automatically.
3. Buy a home and pay it off early - A MUST in his eyes. While this step is the hardest of the group, he's pretty adamant that if you rent you'll almost never become a millionaire. No matter your current situation, buying pays off in the long run. Once you own, use the "bi-monthly" payment plan to pay off the mortgage 7-10 years earlier.

There's a TON of other good information in the book, like how to get rid of credit cards faster, and finding your "latte factor" (daily expenditures that could easily cut in half), but I really enjoyed the stories on how people have actually followed this! These days, it's easy as pie to automate everything. As long as you have a steady stream of income, you're golden. Even if you don't, following the main rules will still guide you nicely.

To be honest, it's just nice reading something that is not only do-able, but extremely easy! And you know what? I actually believe i'm going to be a millionaire! Not 100% because of this book, although the motivation is killer, but because if you can learn how to save it's just a matter of time. It won't happen next week, or even 5 years from now, but I'll tell you one thing - when i'm leaning into the mid-life stage, you better believe i'm not gonna have a crisis!

The only thing i didn't like hearing was that "you don't need a budget". Psshhh, come again? I think all he's trying to do is to get you to focus on the 3 main points above, and basically forget all else you've tried & failed at. I see his point, but i'm not listening. Doesn't he know budgets are sexy!

At any rate, take what you will from all of this. Everyone's different, but i'm fairly confident you'll at least get one thing out of it. I personally put my stamp of approval on this bad boy, and about to pick up another copy for my bro. $4.15 used on Amazon?! Shoooooot....i'm keeping mine ;)

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* You can buy the book here: The Automatic Millionaire
* And you can check out other book reviews here: Book Reviews

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