Audiobook Summary: The Millionaire Next Door by Thomas J. Stanley, William D. Danko

Try Blinkist for FREE - The Best Platform for Book and Audiobook Summaries CLICK HERE ►► http://bit.ly/blinkist_freetrial ◄◄ Download the PDF Abstract File CLICK HERE ►► https://manychat.com/l10/160276 ◄◄ Try Audible for FREE - The Biggest Audiobook Library Platform CLICK HERE ►► https://amzn.to/33qbB1O ◄◄ Get the Book on Amazon CLICK HERE ►► https://amzn.to/2UcEgmM ◄◄ -- -- -- -- -- The Millionaire Next Door shows you the simple spending and saving habits that lead to more cash in the bank than most people earn in their life while helping you avoid critical mistakes on your way to financial independence. It always makes me sad to hear a great author has died of unnatural causes. In Thomas J. Stanley’s case it was a drunk driver, who tried to cut him off in traffic, crashing into his Corvette – one of his few luxuries – and fatally injuring him at 71 years old. The Millionaire Next Door, which funnily made him and his co-author millionaires, was published in 1996 and has sold over 3 million copies to date. Stanley was obsessed with studying the wealthy, whom he called “the affluent”, and what discerns them from those he calls UAWs – under accumulators of wealth. As it turns out, becoming a millionaire is not rocket science, just a matter of planning well, living below your means and avoiding a few stupid mistakes. Want to know how? Use these 3 rules to improve your chances of ending up with a million dollars in the bank: 1. Save responsibly from the moment you first start earning more than you need to live. 2. Use this simple formula to calculate if you're falling short your financial potential. 3. Avoid economic outpatient care to reach your goal. Committed to making your dream of financial independence come true? Let’s see if you can keep these rules! Lesson 1: Save responsibly from the moment you first start earning more than you need to live. Most people think the only way to become a millionaire is to earn at least $1 million/year for a couple of years. But even if you’re one of the top earners in the world, taxes will eat away roughly 50% of your annual income. Deduct living expenses, maybe a mortgage and a few vacations and you might end up with just $200,000 – if you’re lucky. However, that would indeed make you lucky, because you never even have to earn a million dollars in a year, in order to become a millionaire. Not with this one rule anyways: The moment you earn more than you need to live, save as much as you responsibly can and avoid spending cash on things you don’t need. Budgeting well and living a frugal life is really all you need to build wealth (especially if you’re still young). Around 55% of all millionaires attest their wealth simply to being deliberate about their finances and disciplined saving. Note for the youngsters: If you’re not out of college yet, remember this at all costs (haha), so you can instantly start saving half or even more of your income, once you start your first job. Lesson 2: Calculate if you’re not reaching your full financial potential with this simple equation. Stanley has come up with a simple formula to calculate your expected wealth: Multiply your age with your pre-tax annual income and divide by 10. Whatever this number is, it reflects how rich you could be right now, if you’ve already cultivated good spending habits. For example, if you earn $80,000 at age 30, your expected wealth comes out to $240,000. Take this with a grain of salt, since it takes younger people longer to reach their expected wealth, because of compounding interest – a 50-year old will have reaped the benefits of the interest they get on their interest for much longer, for example. However, it’s still a good indicator of how well you stack up and can keep you from becoming a big-hat-no-cattle-type. That’s someone who appears wealthy (like a farmer with a big hat), but in reality spends all their money on keeping up this illusion (and thus has no actual cattle). Try to get closer and closer to your expected wealth over time, not by saving excessively, but by avoiding spending too much. Lesson 3: Don’t fall for economic outpatient care to see your bank account go to seven figures. Do you know how kids with rich parents often can’t handle their finances and never worry about spending? That’s what economic outpatient care (EOC) is all about. Most affluent parents mean well when they support their children with their hard-saved money, but in reality it hurts their ability to handle money. Almost half of all wealthy Americans sponsor their children and grandchildren with over $15k/year, which leads them to acquire the according lifestyles, even though they technically can’t afford them. -------