Most folks in the FIRE community have read the classic book by Thomas Stanley and William Danko, The Millionaire Next Door. Written in 1996, the book exploded many of the myths of the wealthy in America. Having done research on US millionaires for over a decade, the authors had the “goods” on them. Over 80% of the Millionaires were first generation (i.e. no inheritance) who did it be hard work, frugality, and the smart allocation of resources. The book also detailed how many of the folks who “look wealthy” are not. They are often living paycheck-to-paycheck. How many folks in the FIRE community have seen that?
Since it was first published, Thomas Stanley has gone on to write three other books on the topic (The Millionaire Mind, Millionaire Woman Next door, and Stop Acting Rich). Each of these added additional data points on US Millionaires, and the ones who were trying to “look rich.” While compiling updated information for the 20th anniversary of the original book, Dr. Stanley was killed in an auto accident. His daughter, Sarah Stanley Fallaw, was assisting in the data collection and analysis, and felt honor bound to finish the book her father has started. Thus, The Next Millionaire Next Door.
The book seeks to answer the question, has the path to wealth changed in the 20 years since the original was written, and if so, how has it changed. Unsurprisingly, the book provides details that the same things that lead to wealth in 1996 (frugality, hard work, etc.) still work today, in some cases, even better. The book details the opportunities that are available, and blows apart new myths that have developed since 1996. In addition, there are significant parts of the book that discuss the FIRE movement, and its relationship to the book’s topics.
For many folks who have read the original, this book will not offer very many insights or original ideas. It validates the previous work with new data, new ideas and updated links. Still, I think it’s a valuable book to read, as it helps arm the reader with data and arguments against those who state that the current time period is nothing like the 1990s. The basic building blocks of wealth are still there, and still working.
I’d grade the book a B.
Mr. 39 Months