In the first quarter of 2015, the financial world lost an icon. Dr. Thomas Stanley, the New York Times best-selling author of The Millionaire Next Door (and several other books on the behavior of wealthy Americans), died in car accident on February 28.
Dr. Stanley spent much of his career researching the behaviors of the wealthy, and what he learned in his research became the basis of a roadmap for aspiring wealth builders and financial advisors alike.
The underlying theme of Dr. Stanley’s work is that the large majority of millionaires are not who we think they are; they don’t live in fancy houses, drive exotic cars or dress in fine suits. Instead, they are generally first-generation wealth builders who live modest lifestyles and are meticulous planners. Dr. Stanley writes, “Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and most of all, self-discipline.”
So what’s the point of saving and amassing millions if you do not use it to shower yourself with gifts and nice things? Dr. Stanley’s research indicates that in fact, “Financially independent people are happier…” than those that spend their income to acquire signs of wealth rather than financial stability. What they find is that the comfort of being financially secure brings greater joy than luxury cars and extravagant travels.
Considerations for Your Future
- Spend less than you earn
- Create a budget for spending and for saving
- Avoid buying status objects to “keep up with the Joneses”
- Invest your money smartly (like in a retirement plan)
- Understand that money and things do not buy happiness but financially independent individuals do have more peace of mind
I remember reading The Millionaire Next Door for the first time as a college sophomore. It clearly changed the way I think about personal finances, and it also had a profound impact on my career. I am thankful for the work of Dr. Thomas Stanley, and believe the greatest tribute I can offer is recommending that you too pick up a copy of his most popular book.