Although this book is classified as an investment and financial management book, the author will not tell you how to make money and invest, but through detailed data and cases, it reveals the real lifestyle and consumption concept of American millionaires (generally referring to the top rich), changes your inherent view of the rich, and lets you have the thinking of the rich.
The author, Thomas J. Stanley, is a professor at the University of Georgia Business School and a marketing expert, and since 1973, Dr. Stanley has been engaged in the study of the rich and is the global authority on millionaires.
The book was first published ten years ago, and the national conditions of China and the United States are not the same, but some of the conclusions in the book can still reveal why some people can become millionaires and some people can't get rich.
Why is the income high and poor?
Many people are very good at making money, but at the same time they have a lot of expenses and are happy to enjoy a high standard of life. This type of person likes to model the lives of millionaires and spend their money on things they think match their identity. But spending money doesn't make them rich, and spending high only consumes their wealth. As a result, high consumers don't have enough money to manage their money, no assets that can generate additional income, and they can't accumulate wealth. That is to say, high income is not really rich in the true sense of the word.
Many car manufacturers introduce new models every year. For manufacturers, making major improvements to the car's performance every year is very difficult and the cost does not allow it. Therefore, savvy rich people like to buy entry-level sedans with high-quality accessories. In their eyes, cars are like toasters —all toasters are used to toast bread, and all cars are used for transportation.
Pseudo-rich vs. really rich
All kinds of social media, advertisements and movies and TV dramas around us remind us that "if you drive a luxury car, live in a mansion, and carry a Hermès bag, you are rich." As a result, the income of the pseudo-rich is almost entirely spent on consumption, and on items that symbolize social status and identity, such as cars, houses, luxury goods, etc. However, under the gorgeous appearance, it is likely to be shy.
"What shines is not necessarily gold." —Shakespeare
In "Thirty Only", Gu Jia used a scarce and difficult to buy Hermès bag as a stepping stone to enter the circle of rich wives
The reality is that most of the truly regals are not "consumption-oriented", they usually buy "good quality" brands instead of "sky-high" brands. They work hard, keep a low profile and live within their means. They have strong investment capabilities and strong capital to face asset bubbles and economic collapses.
There is also a class of plutocrats who are keen to buy luxury brands, which Dr. Stanley calls "dazzling riches," when in fact they make up only about 2 percent of Millionaire households in the United States. The author is not complaining about this type of rich people (because no matter how much they spend money, they will not change their net worth), but those pseudo-rich people who like to imitate the very few "dazzling rich people" like this kind.
"Your time is limited, so don't waste time living someone else's life." —Steve Jobs
Three generations out of the nobility or three generations of rich?
Many children of the rich have no idea what their parents did or how much money they had at home when they were young. From an early age, they accepted the strict discipline of their parents, lived a life of living within their means, and also learned how to invest effectively in financial management. The experience that parents give their children will last a lifetime. The aristocracy is not an upstart with a lot of money, and their academic taste is slowly accumulated by time.
On the contrary, many children today receive hundreds of new toys every year, but they have formed the habit of relying on their parents for life financially and are still dissatisfied with life. Because a lot of things are not something that money can buy.
What are the qualities of a truly rich person?
Most people want to be rich, but they only pay attention to what the rich eat, wear, and drive, but they don't pay attention to how they work and how they do their careers. In his book, Dr. Stanley summarizes the factors that make the wealth rich successfully accumulate, including:
- Honesty and trustworthiness
- Stay on the line
- Superb social skills
- A responsible partner
- Exceptional leadership
- A love of business
- luck
- Stock market investment
- Extremely high academic achievements
And the pseudo-rich man, who likes to imitate the rich, sees only what is superficial, "just as he values only the lush foliage of the oak tree and does not notice its deep roots." "The hard-working habits and values of millionaires are like oak trees that go deep into the ground, and that's the solid foundation on which they accumulate their wealth."
Why are the really rich mostly frugal?
Most millionaires are self-made and hard-working to become rich, so even if they become rich, they will still maintain a budget-conscious spending habit. More importantly, they save assets that should be consumed to generate greater value (rather than having fun in time and overdrawing the future), allowing wealth to grow infinitely in the form of compound interest, which is the basis of all huge wealth. Putting limited money into more efficient resources is the first step in opening the gap.
You may ask the question: Is there a difference between expensive things and cheap things? Is it impossible to save money with your life and get a moment of relaxation and enjoyment? Even more extreme, worried about dying prematurely before they can start enjoying it...
Of course, we can "stop from time to time to savor the fragrance of roses" But if the money is made only for consumption, for the pursuit of luxury brands, then the energy and financial resources spent on things and activities that really benefit people will be reduced.
Dr. Stanley cites the most popular activities among millionaires: visiting museums, fundraising for charity, consulting tax experts, attending fundraising balls, participating in civic events, and more. For most rich people, the experience of life, rather than specific items, will make them feel happier, and "donation" gives them a greater sense of satisfaction than buying expensive items.
This book is not about being good for the poor or being good for the rich, after all, how to live more meaningfully is what we should think about, and a meaningful life is happy and satisfactory. The author wrote this book to remind people that if you want to become a real rich man, you must immediately "stop pretending to be rich", turn your income into greater investment opportunities, and be more financially independent. "If you want to enjoy luxury, you should wait until you get rich, not before you get rich."
"The richest person is the one who can seek happiness everywhere." —Henry David Thoreau
According to a 2020 survey conducted by the agency, nearly 80 percent of U.S. millionaires are from civilian-class or middle-income households. This data shows that every ordinary person has the opportunity to become a millionaire and achieve financial freedom. But first you have to learn to really think like a rich person.
If you are interested, you can also refer to "Style: Social Hierarchy and Taste of Life" recommended by Tian Yimiao of the Shanghai Conservatory of Music, written by Paul Fussell, a professor at the University of Pennsylvania and a cultural critic, who details the different living habits of various classes in the United States.
"Style"
Excerpt from "Style"
postscript
The book is titled "Stop Acting Rich: And Start Living Like A Real Millionaire," which translates literally as "Don't Pretend to Be Rich and Start Living Like a True Millionaire." It was translated as "The Millionaire Next Door: The Surprising Secrets of America's Wealthy" because the author had previously written a book called "The Millionaire Next Door: The Surprising Secrets of America's Wealthy."
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