The Millionaire Next Door

The Millionaire Next Door

In 1992, a marketing professor named Thomas Stanley sat across from a man in a scuffed pair of work boots in a rented conference room outside Atlanta. The man had agreed to be part of a focus group on the financial habits of wealthy Americans. His jeans were faded. His truck, parked outside, was a used Ford F-150 with 90,000 miles on it. His net worth was $4.1 million.

He had never taken a luxury vacation. He had never owned a boat. His wife drove a car that was three years old, also bought used, also paid for in cash. He drove himself to work each day in that truck, which he had paid cash for after three months of watching the dealer lot to make sure the price was right. He had no patience for financing a depreciating asset. He was not retired. He did not plan to retire soon. He ran a small business installing commercial HVAC units and had done so for thirty-one years. He told Stanley, without embarrassment, that he budgeted every dollar his household spent. He could tell you exactly what he had paid for every suit he owned. He had never paid more than $400 for one. He had never owned a watch worth more than $235. He could not name the models of watch his coworkers wore because he had never paid attention to watches.

Stanley had interviewed hundreds of people like him. And hundreds of others who were nothing like him -- physicians driving German cars, attorneys whose mahogany home offices cost more than the HVAC contractor's first house, finance professionals earning $400,000 a year who had almost nothing saved, who leased cars they could not afford and lived in houses whose mortgages required every dollar of their income to service. The contrast was the point. Stanley and his research partner William Danko had spent more than twenty years studying where wealth actually lives in America. They had conducted more than 1,000 in-depth interviews, run dozens of focus groups, and analyzed questionnaires sent to households identified as likely millionaires through proxy indicators: neighborhood data, business ownership records, asset filings. What they found turned most assumptions about money and success completely upside down.