In Memory of Thomas J. Stanley: Author of The Millionaire Next Door

In Memory of Thomas J. Stanley: Author of The Millionaire Next Door

In The Millionaire Next Door, Stanley shared the common factors among wealthy individuals and couples:

1. They live well below their means.
2. They allocate their time, energy and money efficiently, in ways conducive to building wealth.
3. They believe that financial independence is more important than displaying high social status.
4. Their parents didn’t provide them with “economic outpatient care” (i.e., they weren’t spoiled financially).
5. Their own adult children are economically self-sufficient.
6. They are proficient in targeting market opportunities.
7. They chose the right occupation.

Identifying the Differences

In The Millionaire Mind, Stanley studied a group of 733 millionaires who fit his definition of having true wealth. The study included a nine-page, 277 question survey that each respondent completed. His findings helped us understand what makes the truly wealthy so different from everyone else: their minds. Here’s what he discovered:

1. They weren’t workaholics. They spent a lot of time socializing with family and friends. When they did work, they worked harder than most people.
2. The average college GPA was 2.9 out of a 4.0 scale. Fully 90% were college graduates with 52% holding an advanced degree. That said, Stanley found no substantial correlation between the wealthy’s net worth and income and their SAT scores, class ranks and/or grade performance in college.
3. Most respondents lived in old, well-established, upper-middle-class neighborhoods in homes built in the 1950s or earlier. Most had either small outstanding balances on their home mortgages or none at all.
4. They chose vocations that were economically valuable, but often not pursued by the crowd. Their careers allowed them to fully use their abilities and aptitudes.
5. They owned publicly traded stocks and stock mutual funds and didn’t get out of the market when it dipped.
6. There was a positive correlation between the number of lifestyle activities they participated in and the levels of their net worth.
7. They credited integrity with significantly contributing to their success.
8. They had tenacity, strong leadership abilities, and a very competitive spirit.

Standards of Success

In his research, Stanley also discovered several values that the truly wealthy had in common. He used them to develop eight principles of economic success:

1. Understand the key success factors: hard work, integrity, perseverance, focus and, most of all, self-discipline.
2. Never allow a lackluster academic record to stand in the way of becoming economically productive.
3. Have the courage to take some financial risks and learn how to overcome defeat.
4. Don’t simply select a vocation that’s unique and profitable; pick one you also love.
5. Be careful when selecting a spouse. Those who are economically productive marry husbands or wives with characteristics that are compatible with success.
6. Operate an economically productive household. Many millionaires prefer to repair or refinish rather than buy new.
7. Follow the lead of millionaires when selecting a home. Study, research and negotiate aggressively.
8. Adopt a balanced lifestyle. Many millionaires are “cheap dates.” It doesn’t take a lot of money to enjoy the company of your family and friends.

Stanley’s research remains valuable and his efforts have provided an inside look into the lifestyles and minds of the wealthy. Before his death, Stanley and his daughter, Sarah Fallaw, were updating his work and we look forward to reading their findings.