WTF Millionaire Next Door

[LizOB]

As recommended, I've been trying to read more financial books. I'm about halfway through Millionaire Next Door and.... I just can't even with this book. Was it originally written in the 1950s or something? It thinks that for me to get wealthy I'm supposed to spend my days clipping coupons while my husband toils away at his job. All of the millionaires profiled are men. The only women profiled are about how frugal they are with their husband's money. There's even an example in the chapter on parents gifting money to adult children about how the well-off mother was upset her daughter didn't marry someone who makes more money. I have news for the authors: I'm the one in my marriage who went to medical school. I make more than twice what my husband does! We're building wealth because I'm the one starting backdoor roths and taxable accounts. Does this rub anyone else the wrong way?

Also, there are MANY instances where they show a correlation between xyz and building wealth, then conclude that there is causation. Unless they have more data to support that conclusion that they've left out of the book, I'm not buying all of it. Does the second half of this book get any better or should I just quit reading now?

[q-school]

quit reading now

[CM]

LizOB wrote:

Was it originally written in the 1950s or something? It thinks that for me to get wealthy I’m supposed to spend my days clipping coupons while my husband toils away at his job. All of the millionaires profiled are men.

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[Zaphod]

Probably quit reading. I pretty much got the point just by people mentioning. Live well below your means and save big, which you already know. Not much in it for people that are beyond superficially aware of personal finance stuff.

Something I've worked on the last year or so is not to trudge through books that arent very good, or that use 5-6x the amount of pages necessary to make their point. No way, I value my time more than that.

[ITEngineer]

Lots of thoughts here. First - I love that book! Dr Stanley did a great job gathering and compiling data. He was a great researcher. Remember, it was published in 1996 so the Millionaires he talked to and interviewed made their money in the 60's, 70's, 80's and early 90's. The culture has changed a lot since then. But some things are still true. I remember them being very concerned about economic opportunities for their daughters (vs their son's) and at least I feel that has changed dramatically (for the better) in the last 20 years for women and is probably somewhat out of date.

Most self-made millionaires are married with multiple children. And during that timeframe the breadwinners would have mostly been men and most of their wives would have stayed at home. They didn't receive a meaningful inheritance. They lived below their means, saved, and invested regularly collecting cash generating assets. The book helped me realize that anyone could live the same lifestyle with the same benefits if they just structured their lives in this fashion (living below your means and accumulating cash generating assets)

Congrats on working your way through medical school! I might be reading into your comment a little bit but when you say "We’re building wealth because I’m the one starting backdoor roths and taxable accounts" does that mean you don't feel like your husband is on the same page as you with regards to wealth building?

Yes we always need to be aware of correlation vs causation. I feel that they built a pretty good case that those habits helped those families build wealth.

As for other reading I would recommend finishing the book, but treat it as "this is how they did it in the 60's-80's". I'm currently reading this: The Sum of Small Things: A Theory of the Aspirational Class which is eye opening from a long term societal outcome perspective.

[Lithium]

I think for most of the crowd here who are pretty much getting it right and visiting these forums frequently, reading personal finance books is overrated.  Many of them have terrible advice (i.e. Kiyosaki, Peter Lynch).  It's been over a year since I've found anything that wasn't pretty basic and just preaching to the choir, or too theoretical, speculative, boring, and non-actionable.  I have a higher tolerance for podcasts, but there aren't any I really like besides WCI's.

[CM]

If anyone can recommend a better choice with same message (i.e., LBYM, save and invest, gain financial independence) for my nieces, but without sexist overtones, please chime in.

[Hank]

Stanley and Danko published their book in 1996 based on research done earlier still.  Most of the folks they profiled were fiscally conservative.  Many were socially conservative and didn't stray far from Ozzie and Harriet stereotypes.

The big takeaway is the difference between high income and high wealth.  It's not what you make, it's what you have to show for it.

Frankly, I'd read the summary on Wikipedia then skim the remainder of the book for topics that might interest you.  https://en.wikipedia.org/wiki/The_Millionaire_Next_Door

The chapters on buying durable personal vehicles by the pound, educational attainment, different ethnic and social groups that tend to be prodigious savers, etc. all were interesting to me.  There is a newer edition of the book from 2010, but I think they only updated the preface.  I'd love to see a truly up to date version of this book, but I don't think Thomas Stanley has done that.

[CM]

Hank wrote:

I’d love to see a truly up to date version of this book, but I don’t think Thomas Stanley has done that.

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He died: https://www.ajc.com/news/millionaire-next-door-author-dies-crash/PM2IyoJSqzLnKfe3BOEo4J/

[DrMoneyTails]

LizOB wrote:

As recommended, I’ve been trying to read more financial books. I’m about halfway through Millionaire Next Door and…. I just can’t even with this book. Was it originally written in the 1950s or something? It thinks that for me to get wealthy I’m supposed to spend my days clipping coupons while my husband toils away at his job. All of the millionaires profiled are men. The only women profiled are about how frugal they are with their husband’s money. There’s even an example in the chapter on parents gifting money to adult children about how the well-off mother was upset her daughter didn’t marry someone who makes more money. I have news for the authors: I’m the one in my marriage who went to medical school. I make more than twice what my husband does! We’re building wealth because I’m the one starting backdoor roths and taxable accounts. Does this rub anyone else the wrong way?

Also, there are MANY instances where they show a correlation between xyz and building wealth, then conclude that there is causation. Unless they have more data to support that conclusion that they’ve left out of the book, I’m not buying all of it. Does the second half of this book get any better or should I just quit reading now?

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100% agree. Im a female and a physician and that book did not do it for me - I quit reading about half way into it.

As zaphod said, I had understood the point just by pple mentioning it and the book didn't really add anything to my knowledge or financial behavior.

That being said, I can see how it may help those who are just beginning to want to change their behaviors and what not. Just wish it didn't feel like it was written in the 50s as you said.

[Donnie]

As with any advice like what’s found in a book like this, chew the meat and spit the bones. Haven’t read it, but judging from other people’s reviews, there’s likely something applicable in it. Maybe the author’s ideas on gender are outdated, but the author may still have good ideas on building wealth.

[LizOB]

ITEngineer wrote:

Lots of thoughts here. First – I love that book! Dr Stanley did a great job gathering and compiling data. He was a great researcher. Remember, it was published in 1996 so the Millionaires he talked to and interviewed made their money in the 60’s, 70’s, 80’s and early 90’s. The culture has changed a lot since then. But some things are still true. I remember them being very concerned about economic opportunities for their daughters (vs their son’s) and at least I feel that has changed dramatically (for the better) in the last 20 years for women and is probably somewhat out of date.

Most self-made millionaires are married with multiple children. And during that timeframe the breadwinners would have mostly been men and most of their wives would have stayed at home. They didn’t receive a meaningful inheritance. They lived below their means, saved, and invested regularly collecting cash generating assets. The book helped me realize that anyone could live the same lifestyle with the same benefits if they just structured their lives in this fashion (living below your means and accumulating cash generating assets)

Congrats on working your way through medical school! I might be reading into your comment a little bit but when you say “We’re building wealth because I’m the one starting backdoor roths and taxable accounts” does that mean you don’t feel like your husband is on the same page as you with regards to wealth building?

Yes we always need to be aware of correlation vs causation. I feel that they built a pretty good case that those habits helped those families build wealth.

As for other reading I would recommend finishing the book, but treat it as “this is how they did it in the 60’s-80’s”. I’m currently reading this: The Sum of Small Things: A Theory of the Aspirational Class which is eye opening from a long term societal outcome perspective.

Click to expand...

My husband set his 401k contribution to 10% (with a 5% employer match) and hasn't done anything else. Which was fine for a long time. But now that we're married and my loans are paid off we have extra money that really should be invested instead of sitting around in a checking account (or being spent). We are on similar pages when it comes to spending and living below our means, but I'm doing the legwork with the investments.

[CM]

LizOB wrote:

We are on similar pages when it comes to spending and living below our means, but I’m doing the legwork with the investments.

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As others have mentioned, you don't have much to gain from Millionaire Next Door if you're already at this point.

[ITEngineer]

LizOB wrote:

My husband set his 401k contribution to 10% (with a 5% employer match) and hasn’t done anything else.

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Low hanging fruit. Increase his contribution to 18% to maximize the tax deduction. Make sure you're maxing out your own tax-deferred accounts. Then you need to figure out what you will do next. No, the Millionaire next door isn't the right book for investment advice.

[Dr. Mom]

CM wrote:

If anyone can recommend a better choice with same message (i.e., LBYM, save and invest, gain financial independence) for my nieces, but without sexist overtones, please chime in.

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My first personal finance book was Coffeehouse Investor which I have read and reread many times.  My 24 year old daughter looked at my personal finance book shelf and of all things picked Ramsey's, Total Money Makeover.  She has no debt, so not sure why it attracted her attention.  She has passed it to several friends who all liked it too.  Strange to me that they all liked it so much.  I guess it does address LBYM even though I am not in agreement with his investing recommendations, although as I recall those are pretty light in the book.