I usually steer away from books and websites with the word “millionaire” in the title. In my opinion readers benefit from sources that teach them how to do something well, not from advice on getting rich.
There are exceptions, however, and a notable one is Stanley and Danko’s The Millionaire Next Door, an enlightening study on how most wealthy Americans earned (and keep) their net worth. They theorize, in a nutshell, that most wealthy Americans got that way though a combination of shrewd business sense and frugal living.
My two cents is that Stanley and Danko could stand to lighten up a little; if at some point along the road I decide to trade in my ’85 escort and splash out on a new sports car then it’s not going to be the end of the world. But generally speaking their message is excellent. Americans are great at consuming and terrible about saving – this is a message the people need to hear.
Pat Kitano over at Transparent Real Estate uses a format that I like when he compares two different ideas, services, or trends. Imitation is the sincerest form of flattery, so with apologies to Pat here’s how I compare Kiyosaki’s Rich Dad series with The Millionaire Next Door by Stanley and Danko.
Note: those of you who read my recent post on Rich Dad Poor Dad already know I'm not a fan of Kiyosaki's philosophy. But hey, this is a blog - I don't have to be objective. You want Fair and Balanced then go to Fox News.
| |
Rich Dad Poor Dad |
The Millionaire Next Door |
| Core Philosophy |
Wealth is a state of mind. There are secrets that wealthy people have that poor and middle class people don’t. Learning and internalizing these mindsets will allow you to get rich. |
Wealth is about your habits. If you change your habits then you can accumulate wealth |
| Material Things |
Wealth is a gateway to a lifestyle. Follow the Rich Dad methods and you’ll be able to afford the cars, early retirement, and expensive golf clubs that Kiyosaki emphasizes in his book. |
Attachment to material things is the primary obstacle to wealth. Living below your means is an important key to allowing your money to work for you. Keeping up with the Joneses is deadly to your financial well being. |
| Work |
Your money works for you, not the other way around. The traditional concept of “work” is a trap which the poor and middle class fall into, but which the rich have learned to avoid. Learning the secrets of wealth is more important than generating an income. You get rich by buying assets and letting them work for you. |
Frugality combined with a prudent stewardship of your income provide a path to financial security for anyone willing to save diligently, invest wisely, and spend frugally. Most wealthy people are self employed. You get rich by being good at what you do. |
| Education |
Kiyosaki’s “rags to riches” philosophy does not value education. Kiyosaki emphasizes practical knowledge over theoretical. |
Stanley and Danko point out that the wealthy value education, and that most wealthy parents emphasize the value of education to their children. |
| Motivation |
Kiyosaki’s philosophy is about understanding the “secrets of wealth” – things that rich people know that others don’t. Wealth, in the Rich Dad Poor Dad paradigm, is an end in itself. |
Successful people learn to do something well, and as a result end up rich. Wealth is a by-product. Most of the wealthy people surveyed by Stanley and Danko are business owners who are motivated by building their business, not by building wealth. |
