1.
The Millionaire Next Door
ByThomas J. Stanley andWilliam D. Danko

2.
 Wealth is more often the result of a
lifestyle of hard work, perseverance,
planning and most of all, self-discipline.

3.
The Seven Factors
Characteristics of the wealthy
1. They live well below their means.
2. They allocate their time, energy and
money efficiently, in ways conducive to
building wealth.
3. They believe that financial independence
is more important than displaying high
social status.
4. Their parents did not provide economic
outpatient care.

4.
5. Their adult children are economically
self-sufficient.
6. They are proficient in targeting market
opportunities.
7. They chose the right occupation.

5.
 PAW – Prodigious Accumulator ofWealth
 UAW – Under Accumulator ofWealth
 AAW – Average Accumulator of Wealth

6.
PAWS ARE BUILDERS
OF WEALTH

7.
What are the 3 words that profile
the affluent?
 FRUGAL
 FRUGAL
 FRUGAL

8.
BEING FRUGAL ISTHE
CORNERSTONE OF
WEALTH-BUILDING.

9.
 The foundation stone of wealth
accumulation is defense, and this defense
should be anchored by budgeting and
planning.

10.
 They became millionaires by budgeting
and controlling expenses, and they
maintain their affluent status the same
way.

11.
“PAYYOURSELF FIRST”
STRATEGY

12.
 Financially independent people are
happier than those in their same
income/age cohort who are not financially
secure.

13.
FEAR IS A GREAT MOTIVATOR
 One earns to spend. When you need to
spend more, you need to earn more.

14.
 To build wealth, minimize your realized
(taxable) income and maximize your
unrealized income (wealth/capital
appreciation without a cash flow.)

15.
 Your plan should be to sacrifice high
consumption today for financial
independence tomorrow.

16.
 It’s easier to accumulate wealth if you
don’t live in a high-status neighborhood.

17.
 If you’re not yet wealthy but want to be
someday, never purchase a home that
requires a mortgage that is more than
twice your household’s total annual
realized income.

18.
 Living in less costly areas can enable you
to spend less and to invest more of your
income.

19.
 They allocate their time, energy and
money efficiently, in ways conducive in
building wealth

20.
 Efficiency is one of the most important
components of wealth accumulation.
Simply: people who become wealthy
allocate their time, energy and money in
ways consistent with enhancing their net
worth.

21.
 Begin earning and investing early in your
adult life.

22.
 Investing when one has little or no
intellectual basis for one’s decisions often
translates into major losses.

23.
 Choose a financial advisor who is
endorsed by an enlightened accountant
and/or his clients with investment
portfolios that in the long run outpace
the market.

24.
 They believe that financial independence
is more important than displaying high
social status.

25.
 Money should never change one’s
values…making money is only a report
card. It’s a way to tell how you’re doing.

26.
 Building wealth is not something that will
change your lifestyle. Even at this stage of
life, I don’t want to change the way I live.

27.
 Most millionaires are dealer shoppers as
opposed to dealer loyalists.

28.
What factors explain variations in
wealth accumulation?
1. Income
2. Occupation

29.
 If you cannot increase your compensation
significantly, become wealthy some other
way. Do it defensively.

30.
Economic Outpatient Care (EOC)
 - refers to the substantial economic gifts
and acts of kindness some parents give
their adult children and grandchildren.

31.
 We find that the giving of such gifts is the
single most significant factor that explains
lack of productivity among the adult
children of the affluent.

32.
1. Giving precipitates more consumption
than saving and investing.
2. Gift receivers in general never fully
distinguish between their wealth and the
wealth of their gift-giving parents.
3. Gift receivers are significantly more
dependent on credit than are
nonreceivers.
4. Receivers of gifts invest much less
money than do nonreceivers.

33.
WHATEVERYOU
INCOME,ALWAYS LIVE
BELOWYOUR MEANS.

34.
The Product of EOC:
 The more dollars adult children receive,
the fewer dollars they accumulate, while
those who are given fewer dollars
accumulate more.

35.
 If you are wealthy and want your children
to become happy and independent adults,
minimize discussions and behavior that
center on the topic of receiving other
people’s money.

36.
Rules for Affluent Parents and
Productive Children
1. Never tell children that their parents are
wealthy.
2. No matter how wealthy you are, teach
your children discipline and frugality.
3. Assure that your children won’t realize
you’re affluent until after they have
established a mature, disciplined and adult
lifestyle and profession.
4. Minimize discussions of the items that each
child and grandchild will inherit or receive
as gifts.

37.
5. Never give cash or other significant gifts
to your adult children as part of a
negotiation strategy.
6. Stay out of your adult children’s family
matters.
7. Don’t try to compete with your
children.
8. Always remember that your children are
individuals.

38.
9. Emphasize your children’s achievements,
no matter how small, not their or your
symbols of success.
10. Tell you children that there are a lot of
things more valuable than money.

39.
THE CHARACTER OFTHE
BUSINESS OWNER IS
MORE IMPORTANT IN
PREDICTING HIS LEVEL
OF WEALTHTHANTHE
CLASSIFICATION OF HIS
BUSINESS.