by Ashley
Happy Friday, all! Anyone have any fun weekend plans? It’s been cold and drizzly/rainy for days here (very unusual in Tucson), so we’ve been stuck mostly indoors, but the sun has finally returned so I’m hoping to get some good park-time in with the girls and/or long walks in the stroller (if they kiddos will oblige).
In the meantime, let’s talk about this book: The Millionaire Next Door, by Thomas Stanley.
This book has been talked about a LOT here at BAD. Beks first mentioned it back in September 2010 (see here), and Adam had suggested it to me when I first started blogging (I thought he may have written about it too, and he may have, but I couldn’t find a specific post to link to). So I read it back when I first started blogging – about March or April of last year – and thought it was fabulous, but hadn’t given it much thought recently.
Then my sister (who does not even follow this blog, by the way), posted a link to this article on Facebook by March Chernoff: 20 things the millionaire next door does NOT do, and I was reminded about how great the book was. If you’ve never read the book (or even if you have), I found the article to be great because it neatly summarizes 20 of the top things that the book discusses in much more detail (by the way, this is not mere conjecture – the book was written after conducting multiple interviews and focus groups with the mega-wealty).
I don’t know why, but the item that jumped out at me today was #3. Millionaires do NOT measure success by time spent on something; instead, they measure success by the quality of the work. I’ve always been a pretty efficient worker. So something that takes the average person 5 hours to complete may only take me 90 minutes (yes, of course there are exceptions). But I thought it was a nice thought, especially as so many corporate workplaces basically judge you based on the amount of time you are sitting at your desk. Even in academia I’ve seen this to be true. It’s not like an official measure used to discuss promotion or tenure, but people NOTICE if you are not in the office. But millionaires? Not so much. They judge success based on the actual output; the quality of what has been done. If it took 3 hour or 13 hours doesn’t matter as much as measuring the quality of the final product.
Just wanted to throw that out there.
I’m spending today writing up my interview presentations. I still have over a week until my interview (it’s on Monday the 26th), but I realized that time is going to go FAST, as Monday is MLK Day (no preschool), and Wednesday I have my hair cut/color appointment (which generally takes a good chunk of time), so with my kids only in preschool MWF, we’re really only looking at 2 full work days (today and next Friday) until my interview! Eeek! Wish me luck on the preparations!!!
Have you read The Millionaire Next Door? What did you think about it? Did you check out the Chernoff article? What jumped out at you as being interesting??
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
1. I’m definitely going to look into this book!
2. You’re going to nail this interview, Ashley! *fingers crossed for you*
3. On a personal note: I paid off my car today! *Happy dance*
Thanks, Alyssa! And WOOOOOO!!!! That’s a huge deal, worth celebrating! Congratulations!
Great book! I bought a copy in 1996 when it had just arrived new in the bookshops. I had just started saving and investing after clearing my debts. This book convinced me that the vague dream I had (retire very early) might indeed be possible. I later learned that the book is not without its faults, and that it is important to read it very critical. But it helped me a lot anyhow!
I’m always kind of a critical consumer of information, just in general. I’d be curious to know the faults you’re talking about. I do know that I wouldn’t consider the book “carefully researched” (which is why I mentioned focus groups and interviews….not exactly large sample sizes so can’t be sure on the generalizability), but I still found it quite interesting nonetheless.
The biggest problem of the book is the method used. They looked at people who successfully became millionaires after they became millionaires. This post-hoc research always suffers from survivorship bias. In short this means that you know what happened to the successful people but it is unknown what happened with all the people who did exactly the same but were not successful. The other issue with the book is that it was published in 1996, just after a tremendous 15 year run of equities.
I liked the book anyhow!
I did read the book a long time ago and really enjoyed it. Unfortunately I loaned it and it was never returned. 🙁 I may buy another copy just because it is so good. PS Hi from northern AZ.
Hi AZ friend! : )
The new edition of the book should be called “The 5-millionaire Next Door” to account for inflation. 🙂
I’ve seen discussion of this book over the years on various PF blogs, and I think it’s principles are sound without focusing on the “millionaire” aspect.
The one that jumps out for me in the 20 item list is the one about not purchasing new cars with unfavorable financing (which usually if not always means you can’t actually afford the car). I think that back when Ashley/Hope et al. were selected, the vast majority of the applicants had what I considered to be terribly financially crippling car loans. It’s been borne out by the fact that a good chunk of progress was made when Ashley refinanced her loan and Hope sold her car (woohoo!).
That is an interesting point about the car loans.
Related to the car loan point, I remember hearing somewhere (years ago) that one of the best/easiest ways to become a millionaire was to never have a car loan. This is generally accomplished by buying used cars with cash but it could happen buying new, too; the point is that the money saved over a lifetime without a car loan (plus interest) would easily total over a million if invested wisely.