Financial Affirmation with The Millionaire Next Door

I recently had lunch with a friend of mine who told me that he had recently read The Millionaire Next Door (published in 1996) written by Thomas Stanley and William Danko.  For those of you who have not had a chance to read the book, the authors surveyed over a thousand millionaires to try and identify common attributes that made them so successful at accumulating wealth.  The following are some of the revelations of the survey:

• The majority of millionaires live well below their means.

• Most millionaires avoid or minimize spending money on depreciating assets and non-essentials like luxury cars, fancy restaurants, etc.

• Millionaires tend to focus their efforts on putting their money "to work." That is, instead of spending money on depreciating assets they concentrate on building working capital or investing in assets that will generate income or capital appreciation.

As my friend and I discussed certain points of the book over lunch, I was a bit surprised to learn how big of an impact this simple personal finance book had on my friend (one of the most financially savvy people I know). As it turns out, it was not necessarily the very practical and obvious message of the book that rang a bell with my friend, but rather it was an affirmation that he was making sound financial decisions.  The book reinforced the fact that becoming financially independent takes discipline, sacrifice, hard-work, patience, prudence, consistency and most importantly time.

I think I will go home, dust off my old copy of The Millionaire Next Door and re-read this classic (the 20th Anniversary edition just came out a few years ago). After all, a little financial affirmation will never hurt anyone.