What If You Don’t WANT to be the Stereotypical Millionaire Next Door?

If you’ve been reading personal finance blogs for any length of time, you’ve probably heard about The Millionaire Next Door. It’s an interesting book with some good insights, but what people often take away from reviews of it goes something like this:

“If I want to be a millionaire I have to live like a broke college student until I’m really old and then maybe if I’m lucky I’ll still be around to enjoy the money.”

Blog posts about the miracle of investments compounding over time and the value of saving money on the little things (you know, being frugal) often add to this perception. The perceived takeaway is often “Scrimp and save now, deprive yourself, and you’ll be better off later.”

Now it happens to be true that investments compounding steadily over time will add up to a whole heck of a lot more than you started with, and it’s also true that not wasting money on a bunch of little stuff does leave you with more money and/or greater resources.

But it does NOT follow from those things that the only routes to millionaire-hood are either extreme deprivation or winning the luck/brains/talent lottery.

No, there is a happy medium between driving a flash car that you lease for $1200 a month and driving a car that’s worth $1200 total while your coworkers laugh at you and you think “oh just wait til I’m old and doddering, I’ll show you!”.

It’s called being reasonable and setting priorities. What’s most important to you? What don’t you care about at all? How soon do you want to be a millionaire? How much time is there between now and then? What financial mistakes can you avoid? (Debt is expensive.) What can you do to maximize your income in your field of interest?

You don’t have to be a miser to be wealthy. You can travel the world, live in a nice house, drive a fun car, etc., and still have a nice big nest egg. You just can’t do those things on credit and expect to become a millionaire. You also can’t do everything, all the time, the second an impulse strikes you.

You have to plan things out. And it’s ok to plan fun things too. In fact, it’s a lot easier to make fun things happen when you have money. And you can have money before you’re old.


  • What irks me about folks who cry foul in the face of sentiments found in “The Millionaire Next Door” isn’t so much that they feel they can’t have nice things–it’s the sense of entitlement and this freakish offense at (gasp!) living within or below our means. I’ve heard folks complain that “Your Money or Your Life” is just a lifestyle downsizing. When did living on what we actually earn become offensive? How did buying for quality and durability over trendiness become so lame? Or perhaps defining your worth by something other than the trappings of perceived wealth? (Yanno, emulating garish celebrity culture, thinking they’re examples of the truly wealthy, when more often than not, those folks are broke. And insane. ha!)

    I’m just confused about how the stereotypical millionaire next door came into existance in the first place. If I recall the book correctly, these folks simply live within their means and do not allow ever-changing external influences to alter their spending patterns. Yet somehow, this has been changed into a miserly, miserable soul who denies and does without. I don’t get it. (But I do get your insistance that we can’t live the good life on debt and be anything other than in debt.)

    Thus ends this ranting response. :P

    • Hehe, nice rant CF :)

      I hadn’t thought of it that way; as a sense of entitlement. Most of the complaints I’ve seen about that have been people talking about how they don’t want to live like a pauper, etc. Although I’d be really surprised if anyone who read the books felt that way — especially Your Money or Your Life. Contentment was the primary message I got from that, and who wouldn’t want to be content?

  • If you want to be a millionaire, find something your passionate about, develop something you can sell that is of value, whether an actual product or a service, and then get to work marketing it.

    If you work hard enough and smart enough, I firmly believe that the riches will come.

    Maybe not tomorrow, but they will come

  • David, that’s another path to millionaire-hood. I think the key there is finding something that is of value to others, and sticking with it.

  • In “The Millionaire Next Door”, most of the millionaire ethinic groups earned much more than the average Joe (especially considering when it was wrote…).

    In the book, it’s only the Scottish group that lives the lifestyle of artificial scarcity that you describe above. But even the Scottish group made more than the average joe but less than the other groups…

    To me personally, I got the message that if I wanted to be a millionaire, I’d have to take a gamble and either try to start my own business, or invest in real estate.

    Great book though…

  • Don, yeah real estate & small business seems to be a common theme for millionaires. I don’t think most millionaires do live lives of artificial scarcity — that’s pretty much my point. People *think* that’s what happens, but it isn’t particularly the case.

  • This is a great post.

    What people need to realize is that life is about choices. If one choose the ultra frugal route and makes an above average income, then chances are they will end up wealthy. And if they live beyond their means? Then the end result won’t be so well. Yet maybe the best way of approaching it is a route down the middle.

    At the end of the day, people need to realize they can’t have it both ways. They can’t spend like crazy and have a nice nest egg. And if you choose to become wealthy, then things like vacations and nice cars must be sacrificed. That’s the real message behind the Millionaire Next Door. But then again, that’s kind of common sense, isn’t it?

    • Financial Uproar, I think that is the message that’d often taken away from that book, but my point was that you don’t have to be a miser who never goes on vacation or has a nice car. You just have to be sensible and pay for those things in cash while investing andnot going crazy.