Weekend Edition Book Review: The Millionaire Next Door

A few years ago, I made my weekly trip into the local library and did a little bit of browsing in the Getting Rich section of the bookshelves (I’m a big fan of the good ol’ 332.024 part of the Dewey Decimal system).

I found an intriguing book called The Millionaire Next Door, The Surprising Secrets of America’s Wealthy, by two Ph.D researchers named Thomas Stanley and William Danko.

Now, regulars on the financial blog circuit will already know all about this book, but for me it was quite a surprise, and it provided a nice mixture of Advanced Mustachian Training as well as affirmation of principles I had suspected were right all along.

Now that a few years have passed and I have become Mr. Money Mustache, I re-read the book to see what benefits I could pass on to you, the readers.

You can soak up the overall message within the first paragraph:
“Twenty years ago we began studying how people became wealthy. Initially, we did it just as you might imagine, by surveying people in so-called upscale neighborhoods across the country. In time, we discovered something odd. Many people who live in expensive homes and drive luxury cars do not actually have much wealth. Then we discovered something even odder: Many people who have a great deal of wealth do not even live in upscale neighborhoods”.

The book goes on through 270 pages of interesting findings by these researchers who actually conducted thousands of surveys of real millionaires around the US. It took them years to do it. The overwhelming results of these surveys show that these people are not Velvet-Bathrobe wearing gentlemen smoking pipes in their West Palm Beach seaside compounds. They are not even Suburban Ultraconsumers with a 4500 square foot McMansion and two Lexus SUVs in the driveway.

95% of the millionaires of this country are, in fact, what you and I would call Senior Mustachians. They all got there by spending way less than they earn, working hard when they had the chance, and looking to all the outside world like they were actually somewhat low-income.

There’s actually one of these guys three doors down from me on my own street. One of those well-trimmed-grey-mustache-and-full-beard types with a bald head, silver glasses, and a big smile. He lives in a much smaller house than me, and we talk over the leaf-raking occasionally. This man does all his own home and car maintenance, and is often happily covered in mud and grease. It was only when we got to talking about the fact that we are both out often in our front yards on weekdays, that he revealed he “mostly lives off of the passive income from his 300-unit apartment building these days”. Mr Money Mustache shut his own mouth at this point, feeling like quite a silly beginner.

There are loads of amusing individual stories in the book, including one about two contrasting Doctor families each making $700k per year. One of them spends $30,000 on clothing alone and is completely broke, the other one merely spends a moderately luxurious amount on everything and is an ultramillionaire. And inspiring stories about firefighters and secretaries who became millionaires while sharing a $50,000 income.

My personal favorite statistic was the one that over 66% of people driving $70,000 luxury cars in this country are actually non-millionaires. Millionaires typically spend $29,000 or less on their cars, representing less than 2% of their net worth. If you’re not a millionaire yet, your spending should be the appropriate ratio lower, probably translating into a $5,000 car or less!

So when I bike down the street on my 3-year-old $299 commuter bike, wearing ripped jeans and a plaid construction shirt, and someone passes me in a brand new BMW 7-series, I actually get to feel pity for that person and their very-likely poor financial situation. That is true joy.

So if you want some backup tracks to go with Mr. Money Mustache’s own rhymes, you might consider checking this book out of the library. The main thing it will do is give you reassurance that I am not actually making this shit up. I’m following a very time-honored formula for making you rich here. The only difference is I’m trying to make things a little more concrete, telling you EXACTLY how you can cut your spending to a level that allows riches, using real numbers instead of sissy guidelines, and weeding out any hidden losses of your precious employees. That way it will happen automatically, and you can increase your odds dramatically above the default 3.5% chance a person has of becoming a millionaire.

Ready to go further next week? OK, see you then.

  • Mr. Frugal Toque May 15, 2011, 7:17 pm

    I tried growing a mustache once … well, actually, I just shaved the rest of my face to see how I’d look. I looked like a police officer from Northern Ontario, possibly the kind who rides a horse.

    And yet, while I’m not quite worth a mil, all of my car purchases combined wouldn’t add up to a single $70k luxury vehicle, so I guess I’m on the right track.

    Also, I saved about $45 by buying crackers and cheese in bulk. Did you know you can freeze cheese? Someone told me that. I certainly hope it’s true.

    • MMM May 15, 2011, 9:35 pm

      Yes! You have been guided correctly. I have successfully frozen and thawed cheese many times.

      In fact, having a 5-year-old who requires a small pizza baked fresh for him every day, I buy shredded mozzarella in 10 pound bags from Costco and freeze them.. then keep a cache of only 2 pounds or so of it in the fridge for on-the-fly pizzamaking.

  • Happy clam May 25, 2011, 8:12 am

    What do my european eyes read here?
    Dudes, if you freeze cheese it dies. It’s a living thing. Thawed cheese looses it’s taste completely. That is, if it ever had a taste to begin with (not the biggest fan of square-shaped cheddar here)

    • MMM May 25, 2011, 8:45 pm

      What you talkin ’bout Sukka? I just ate a delicious pizza made from recently thawed shredded mozzarella today! And last month, I discovered a big brick of Cheddar I had carefully wrapped and frozen before going on a month-long roadtrip in January, and subsequently forgot about. I made wonderful nachos and quesadillas and vegetable/cheese platters with it with no complaints from the eaters.

      Maybe United States freezers work better than European ones? :-)

      Also, does Cheddar cheese taste better when it is in a shape other than a square? If so, tell me which shapes I should create for ultimate deliciousness.

      • Happy clam May 26, 2011, 8:05 am


        Like I thought – the processed squarey cheeses don’t have much taste to loose :). Everything that comes in the shape of a square can probably be frozen, thawed, re-frozen, and buried in the backyard for the time after the 3rd world war.

        Now if it comes in a round shape like these here:


        I can confidently say that it’s not a good idea to freeze that! Even using an American freezer.

        But then, we europeans also don’t use deodorant, so what do I know about aroma…

        • Steve May 26, 2011, 9:33 am

          There is a difference between frozen and non-frozen cheese, just like there is a difference between frozen and non-frozen vegetables. I eat frozen vegetables and fresh vegetables. I eat fresh and frozen cheese.

          However, I don’t freeze cheese blocks. I just store them in the fridge as I figure if it has aged 2 years, it can age a few more months in my fridge and be even better.

          I do freeze shredded cheese because it doesn’t last long once opened. I do freeze the fine cheeses you advise against freezing because a recipe that calls for Gorgonzola or Stilton doesn’t call for much, and it doesn’t last long in the fridge before it looks like a blue disgusting furball.

          So, I store it in the freezer. And even though you could probably taste a difference between it and fresh, by the time you add sliced steak, cream, and garlic, I seriously doubt that would still be the case.

          • Laurie March 1, 2013, 7:14 am

            You can wax the cheese, and then you don’t have to keep it in the fridge. Bulk wax is inexpensive and you can keep cheese indefinitely in a cool dark spot.

  • Macs May 26, 2011, 8:15 am

    “Maybe United States freezers work better than European ones? :-)”

    Nah, the difference is in Europe we have CHEESE, not ‘processed dairy by-product’.

    “Also, does Cheddar cheese taste better when it is in a shape other than a square? If so, tell me which shapes I should create for ultimate deliciousness.”

    The shape is a by-product of the manufacturing process – square cheese usually made in vast vats from pasteurised, homogenised milk using standardised cultures, pumped full of E-numbers, rapidly matured by artificial means and made by poorly-motivated factory workers with no feel for the art of cheesemaking. Whereas GOOD cheese is hand-crafted in small batches from fresh milk, treated with unique location-specific cultures and lovingly matured in perfect conditions by skilled craftspeople.

    I’m afraid American ‘cheese’ is an international laughing stock ( a bit like English coffe is over there, I guess….). Insensitive, I know, but someone had to tell you guys :-)

    • Happy clam May 26, 2011, 8:51 am

      Hahaha, English Coffee :)!!
      But I am perplexed – Mr. Money Mustache claims to be Canadian, and Canadians have wonderful cheeses. In fact, we usually bring back cheese from Montreal (young ones that is, so that they can mature to taste before being consumed some weeks later, without having to freeze them :)). He needs to know the difference..
      And yes, you were more insensitive than I was.

    • Mr. Meager Mustache March 3, 2013, 7:45 am

      I never realized just how big the difference in taste is until a few weeks ago. My wife and I seek out different types of raw milk (non pasteurized) cheese to keep around the house for breakfasts, snacks, etc. When I was walking around Costco the other day around the frozen/fridge stuff, there was a 2lb brick of Colby Jack for 5 bucks. I bought it thinking we might be able to cut our cheese bill if this stuff was any good. It literally was like eating a mixture of plastic and rubber. We ended up giving the rest to my wife’s parents. We’re currently enjoying a nice 5 year aged gouda instead.

      As for shredded cheese, that stuff literally has wood pulp in it!

  • Spork October 12, 2011, 3:07 pm

    Forget the cheesy replies and return back to topic. That book changed my life. I don’t remember when I read it… probably 10 years or so ago. It opened my eyes. I started seeing how the wife and I were really making a pretty insane amount of money… and spending 85% or more. We thought we were saving.

    It about that same time that we had a 40% cut in pay (wifey quit her job). That 40% pay cut was the biggest raise I ever had.

  • BC February 13, 2012, 5:30 pm

    These arguments about freezing cheese remind me of ancient Chinese saying:

    “Person who says it cannot be done must not interrupt person already doing it.”

  • hands2work September 4, 2012, 11:28 am

    Hi Mr. Moustache, I read that book years ago and was flabbergasted. I love that feeling of watching ridiculous SUV’s and luxury cars pass me in traffic and knowing that my car has been paid off for years and costs me little more than gas and oil.

    I just found you a week or so ago and am enjoying your blog from page one…yes I’m hardcore! I have to say that my favorite metaphor is when you refer to dollars as our employees…I really needed that.

    I have always been frugal, but now I’m in overdrive. I drive a ’96 Mazda Protege that I bought new in ’96 and which now has 211k miles. My previous car was an ’88 Mazda 323 that lasted 12 years and 237k miles without ever needing to replace ANYTHING but the oil and the tires and the brakes!! When it died, it really died! I buy almost all my clothes at thrift stores, but I work in a very professional office and my wardrobe is beautiful. No one would believe that I pay $3 for skirts and sweaters! I currently have a leather purse that I get compliments on all the time that I paid $7. I don’t wear make-up, I don’t drink coffee, I don’t get my nails done and the mall just holds no interest for me whatsoever. I did pre-paid college tuition for my son, who just started his freshman year at VCU. His entire 4 years only cost me $15k.

    I own a 1986 RV which I paid less for than some people pay for one vacation. In 7 years when my boyfriend’s youngest child graduates from high school we intend to hit the road for full time travel. We can’t wait.

    Thanks for this blog. You are inspiring me to work even harder at amassing more employees!

  • PFgal December 27, 2012, 3:03 pm

    If you like this book, try reading The Automatic Millionaire by David Bach. The first example is perfect proof that this way of living really does work. I think that people try to overcomplicate saving, and these books are great reminders of how simple it can really be.

  • Rob aka Captain and Mrs Slow March 29, 2013, 2:51 pm

    Another great book is Millionaire Teacher by Andrew Hallman (will probably have to buy it unlikely to be at your local library) he opens up with a great story about an executive’s wife who,could barely afford to pay to tutor her son inspite of making over half a mill a year.

    Second part is how,he buys cars, found a way to trade up to a “new” car every two years with out having to pay for it.

    I’ll give you a hint of how he does it, it has to do with depreciation.

    • Mr. Money Mustache March 29, 2013, 10:19 pm

      Yeah, I got the chance to exchange some emails with that guy earlier this year. Sounds like a good fellow.

      But changing cars every two years? What would be the benefit? I could see every 10 or 20 years perhaps, just for variety’s sake.. but two years.. man, that’s about how often I need to change the oil (every 7500 on my maintenance schedule).

  • That Guy April 13, 2013, 12:02 am

    Two years later and I am the first to say this?

    (I’m a big fan of the good ol’ 332.024 part of the Dewey Decimal system)



  • Carrie September 23, 2013, 9:46 pm

    The wealthy barber is another good book similar to the millionaire next door. I believe it was written by a Canadian.

  • L'Ingenieure October 24, 2013, 9:29 am

    There is now a book called “Millionaire Women Next Door”. Is it worth the read? I’d be interested to read Mr. and Mrs. MM’s opinions on the book.

    • Sharon April 28, 2020, 12:58 pm

      Scrolled down to see if anyone mentioned it, I recommend it. It covers some stuff in more detail. For the most part, it covers the same ideas again, and all of the examples are women of a broad sample of society.

  • Ian Robinson July 7, 2014, 11:49 pm

    One thing I loved in that book. The most popular car for millionaires was a Jeep Grand Cherokee. :)

    • Mr. Money Mustache July 8, 2014, 9:47 pm

      Yeah, a pretty antimustachian choice. But then again, the book was written before this blog. Now many more millionaires drive a Honda Fit or similar :-)

    • Gary October 5, 2014, 4:51 pm

      Cool! My ’94 is still going strong.

  • Erik August 1, 2014, 9:54 pm

    I began reading through the articles at budgetsaresexy and started reading this book based on his recommendation. Loved it, and I definitely found it eye opening. I also found your website within an article there and I fully intend to read through your “classics”. I especially like that you provide a gameplay to back up the ideas and statistics presented in the book. Hopefully after a ton more reading I’ll be in a place to ask you some education questions regarding MY finances…

    Keep it up, I’ve been sharing the blog with everyone I know!

  • Mike C August 29, 2014, 2:45 pm

    I feel pity for you with your expensive $299 bike! I purchased three hybrids for a total of $200 off of Criagslist. I use the extra two as spares for me and my kids whenever a bike is temporarily sidelined.

  • David December 9, 2014, 1:18 pm

    I’m going through your blog one post at a time and am fascinated.

    One question from this – what did you think about The Millionaire Mind by the same author (assuming you’ve read it)?

  • Lamont Cranston April 8, 2015, 5:00 pm

    Just want to second the Millionaire next door, my wife and I are that. No one would suspect that we are. We have never bought a new car, but my wife is a very patient shopper, we have had a 97 toyota pickup for about 15 years, the most expensive vehicle we ever bought ($10,700) lt still looks great with about 95,000 miles. We also have a 97 Lexus ($6,500) we’ve had about 10 years and a 2001 Avalon ($8,000) ours for 5 years. We just sold our business 97 van $3,500 and upgraded to a 2005 ($6,500), woo, woo! All vehicles were very nice vehicles that my wife found and negotiated.
    We have been married 34 years and saved from day one, our first year we grossed $18,000 and saved $5358, plus the $642 of wedding money, so we had $6,000. Many years we earned lower middle income, had some middle income years in the 80’s, spent about 7 yeras in the 90’s making around $22,000 for two of us. In 2000 we started a business
    and have earned $40k to $50K each. No matter what our income was, we always saved some of it. We have always lived fruguly, maybe not to Mustachian levels, but that’s why it took us 34 years :-) We rarely eat at restaurants, my wife stock up when there is a sale on items we use regularly. We haven’t vacationed for over 15 years. But we lack for nothing.
    Once I realized we were going to have assets, I learned about Vanguard and have invested in index funds.
    We are close to our second million, when you have it in stocks and stocks are doing well, I can tell you,
    the second million is a Lot easier and it comes a lot faster than the first!
    Retirering in a few years, if we use the 4% rule and add SS income, that will be over 2-1/2 times what we have been spending in recent years. No sympathy please, I’ll figure out a way to deal with that. The life challenge now is to stay healthy.
    It can be done, with this quote in mind “Mr. Money Mustache may seem like a mystical and impossible role model, but his only superpower is his ability to not buy things.”

  • Rebecca N. McKinnon June 29, 2015, 10:22 am

    I’ve been reading your posts from the beginning of time onward as you suggested, and I’m really loving the ride. I appreciate your blog. I am at the beginning of the road when it comes to being financially smart but one thing I’ve always had is an appreciation for simplicity. I’ve never wanted to own a luxury car or live in a luxurious mansion. The most luxurious car IMHO is an early 90s Honda Prelude, but I won’t be affording that for a long time. We share a paid off 2008 Toyota Yaris (financed new before we knew better) and I’m getting a used bicycle in a few weeks.

  • Alyce July 5, 2015, 10:53 pm

    Wow. I’ve read a few articles on this site, but have found them so interesting I’ve now committed to reading all of the articles/posts from the beginning. I love the light tone, sense of humor, and yet fanatical commitment by MMM and others. I am one of those next door millionaires no one suspects, and yet I’ve sure made my share of mistakes! I’m a single woman, and started over basically from scratch eight years ago. I lived overseas in a war zone for almost a decade, made a lot of money, lived in a shipping container, and saved over ninety percent of what I earned while people around me spent it all. It reinforced what is truly important and what one needs to live well, as opposed to all those societal luxuries we think we need that are imposed by our social peers back here in the U.S. Light, heat, electricity, a place to wash my clothes, a few good books, the occasional decent bottle of wine, an opportunity to work out, connectivity to the world/friends, a few candles in the evening, and a comfortable bed. Not living all that differently, albeit on seven acres of land now, in Oregon! And I’m still spending more than I should, as a single person, at between two and three thousand per month! But one thing I learned a while ago was to live on way less than I earned, and pay off your debt. Keep up the good work! I love the free wheeling and relentlessly practical nature of the advice on this site! We all have emotions about money and the surrounding issues; but the number don’t lie!

  • Bill September 29, 2015, 10:35 am

    >these people are not Velvet-Bathrobe wearing gentlemen smoking pipes in their West Palm Beach seaside compounds

    Why, I’ll bet some of them don’t even have monocles, or fancy mustaches.


Leave a Reply

To keep things non-promotional, please use a real name or nickname
(not Blogger @ My Blog Name)

The most useful comments are those written with the goal of learning from or helping out other readers – after reading the whole article and all the earlier comments. Complaints and insults generally won’t make the cut here, but by all means write them on your own blog!


welcome new readers

Take a look around. If you think you are hardcore enough to handle Maximum Mustache, feel free to start at the first article and read your way up to the present using the links at the bottom of each article.

For more casual sampling, have a look at this complete list of all posts since the beginning of time or download the mobile app. Go ahead and click on any titles that intrigue you, and I hope to see you around here more often.

Love, Mr. Money Mustache

latest tweets