From the shelf · 102 money books
Does The Millionaire Next Door hold up?
The Millionaire Next Door by Thomas J. Stanley and William D. Danko is one of the 102 money books on The Money Shelf. The shelf links it to 2 of the 22 claims that the book tests against official records from the United States, the United Kingdom and Australia. Each verdict below comes from that test.
Claim 3 · The book makes this claimPay yourself first: save before you spend
Holds with conditionsThe paper’s own results support pre-committed saving out of future pay rises as a way of raising saving rates among employees who agree to join, and the condition is that the household has income left after essential spending, because the national ratios show only average room.
Read the full test →Claim 9 · The book makes this claimFrugality: spending less beats earning more
Weak diagnosisThe arithmetic that saving requires spending less than income is true, and the data tie saving to income: saving rates rise with income in the UK data and the US panel study, and saving in dollars rises steeply with income in the Australian data.
Read the full test →The Millionaire Next Door raised the question. The records take it further: every figure dated, every source named, and the arithmetic worked through for three countries.
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