Do you have a “big hat” but “no cattle”?

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy – Thomas J. Stanley, William D. Danko, Pocket Books

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy – Thomas J. Stanley, William D. Danko

The book Millionaire Next Door by Thomas J. Stanley and William D. Danko is something very often referred by the Personal Finance bloggers and writers around the net. And there is a good reason for it.

People whom are looking for advice in personal finance often hope to become wealthy, millionaires even. However it is important to understand what is it that you are aiming for.

The Millionaire Next Door digs deep into this subject. Authors aim to show how is your everyday average millionaire. What they do, what do they drive, how do they invest and so on. As it turns out the image that so many of us have about the millionaires is plain wrong.

The book claims that this is due to the “big hat no cattle” syndrome. We perceive the wealthy to be the ones with expensive cars, watches and houses. However it is our definition of wealth that fails us. These people have the “big hat”, but “no cattle”.

After an extensive research made by the authors they were able to conclude “7 common denominators among those who successfully build wealth”:

  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 did not provide economic outpatient care
  5. Their adult children are economically self-sufficient
  6. They are proficient in targeting market opportunities
  7. They chose the right occupation

In the book each one of these factors have been built into a chapter of their own. Through the analysis of these denominators you have an unique opportunity to see how do millionaires think and behave.

The Millionaire Next Door has been criticized that the advice given is  too obvious and the book is therefore worthless. I can just say that this is silly (and stupid) and to point these people towards a recent post by J.D. Roth in the Get Rich Slowly.

The financial advice is not the core of this book. It is the revelation based on extensive studies that our perception of the wealth and the wealthy is misleading.

The Millionaire Next Door shows us that becoming wealthy is possible. However on average it is not the life with expensive suits, fast cars and gold watches as many would imagine. It is a question of sacrifice, discipline and trade-offs. In the society where materialism and hyper consumption is nearly considered a norm, it is good to ask: “Do I have what it takes?”

If you are looking for a clear cut financial advice, there are better books out there for you. But if you are interested in personal finance, building wealth and/or achieving financial independence, the Millionaire Next Door is definitely worth a read.

For those who have already familiar with the Millionaire Next Door, Thomas J. Stanley has written several books with the same theme. For example Marketing to the Affluent and Stop Acting Rich: …And Start Living Like A Real Millionaire, both available as paperbacks from Amazon. I have no experience of these  myself though.

The book The Millionaire Next Door: Surprising Secrets of America’s Wealthy is available for example from and

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