Books · Money
Book summary and verdict
The Millionaire Next Door
The millionaire next door drives an old Toyota, owns a plumbing company, and sleeps fine because he saves. I bought a luxury SUV so strangers would think I’m successful, and now the bank owns my car and most of my personality.
Should you read it?
Read it if every raise immediately requires a nicer car and a subscription with Elite in the name. If you already save consistently and feel no need to impress strangers, skim it. Borrowing it would delight the authors.
L.I thought millionaires spent freely. Apparently they save, invest, drive modest cars, and let the rest of us finance the costume. Looking rich buys eight seconds of admiration at a red light. Actual wealth buys the option to tell the boss Saturday is his problem.
The ideas
I · Identity
A big salary can still live paycheck to paycheck. It just does it with granite countertops.
Income is what comes in. Wealth is what remains after every raise meets the version of you who thinks the old car has embarrassed the family.
A person making $400,000 a year and spending $420,000 is not rich. That person is performing wealth at an annual loss. Meanwhile, somebody earning $90,000, living comfortably on $60,000, and investing the rest may be building actual freedom. They just don’t look exciting at traffic lights.
Some people get a raise and save it, and other people immediately upgrade the car, the kitchen, and the size of the monthly panic attack they call a lifestyle.
L.His paycheck is enormous. Every store in town has been notified.
II · Accumulation
A luxury car on credit does prove somebody involved has money.
The rest of this idea is in the app.
III · Status
A luxury car is how adults finance a compliment from strangers.
The rest of this idea is in the app.
IV · Freedom
Wealth is the ability to stop somebody else’s bad decision at your front door.
The rest of this idea is in the app.
What to actually do
List your cash, investments, retirement accounts, and the honest resale value of anything valuable you own. The treadmill is not vintage. It is dusty.
Smaller: Subtract every debt using today's balance, not the adorable little number living in your memory. Your memory works for the defense.
L.The result is your net worth. Write it down, even if the number seems to know things about you. Check it again in twelve months. If your salary rose and this number did not, you gave yourself a raise and immediately stole it.
Find one expense that exists mainly because you want other people to think you’re doing well. Cancel it, pause it for ninety days, or downgrade it one notch tonight.
Smaller: Maybe it’s the car. Maybe it’s clothing. Maybe it’s a subscription you forgot about fourteen months ago and are now apparently leaving money to in your will.
L.The stranger at the traffic light doesn’t care. He’s trying to open a ketchup packet.
Move the exact amount you just freed into savings or investments with an automatic transfer.
Smaller: Do it now, before the money becomes several extremely reasonable purchases that somehow form a criminal organization.
L.Don’t rely on monthly courage. Courage is unreliable and easily distracted by free shipping.
Before a raise arrives, choose how much of it will go to savings or investments and automate the transfer.
Smaller: Set it now, while your current life still appears to support human habitation.
L.Within a month, the larger paycheck will explain that your perfectly good towels have been humiliating you for years.
Still in the app
- What happened when people tried them
- Bullshit?
- Where readers disagree
- The one thing worth remembering
The rest of this book is in the app.
Skip the Book reads the self-help books so you don't have to: what each one argues, what happened when real people tried it, which claims are exaggerated, and what to do tonight. 108 books and counting, new ones most days.
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