Looking Rich in America

It looks like "The Millionaire Next Door" author, Thomas Stanley, is coming out with another book:

During a blunt conversation, Stanley talked about common spending traits of millionaires a decade ago and in his current research, to be explained in his next book, which has the working title "Looking Rich in America."

The wealthy know spending matters. Financial health is about earning and spending. Although earning a lot of money is correlated with wealth, it's not a perfect correlation. "The spending issue is significant," Stanley said. "I believe very strongly that not everybody can play great offense. In other words, not everybody can make $1 million a year or even $100,000. The typical household in the United States makes under $50,000 a year.

"Given that, you have to look at defense. To play great defense, you have to know where all the money is going. And most people don't. So the first thing I would tell people is to account for every dime and nickel they've got and write it all down.

They are thrifty. "There is still a wonderfully frugal group of people in America that we don't talk about, but they're out there," Stanley said. "The majority of them don't have a wine collection. They do serve wine to guests, but the median value of a bottle was about $13, not expensive stuff.

"It's not an impressive lifestyle; it's just that they're not confused. The reason they don't have a second home isn't because they can't afford it. It's just a hassle."

"What I'm trying to tell people, especially young, impressionable people, is this ain't the way the world works. If you're looking at being happier by having more things, get a life."

They are not deprived and miserable. "On a scale of happiness, they're quite happy," Stanley said. "In fact, the more wealth you have, the higher your satisfaction." But their happiness comes not from material things but from achievement and being financially independent. It comes from satisfaction with their family and job.

They don't drive away wealth. The No. 1 make of car owned by millionaires in 1996 was Ford. Today, it's Toyota, according to Stanley's new study. Luxury brands do not top the list, and many millionaires, 37 percent in 1996, bought used cars.

They don't care about the Joneses. "In a lot of the surveys we've done, you find people making 200 grand a year, which is in the top 2 percent of American households, and they're not happy," Stanley said. "Those are the people who are living in neighborhoods where the median income is $300,000. That's the problem. I don't think people really understand that. The people who try to keep up with the Joneses and ahead of the Smiths, well, they are the Smiths.

Read the whole thing!

Also be sure to check out Stanley's first book, "The Millionaire Next Door".  It is an excellent read and has some findings I think most people will find unexepected about American millionaires.  I look forward to reading Stanley's new book when it comes out.