This book1 tells the story of a typical (1996!) Americal millionare - and it’s not the story people usually think it is.

Typical millionare does not spend much. Usually, they all live below their means as much as possible. They save compulsively, they drive cars that aren’t new or luxury imported. They believe financial independence is more important than displaying social status. Most of their time and energy is spent in ways “conductive to building wealth”.

Most of the (then) millionares were first-generation affluent, meaning they earned it themselves by having occupations with moderate-to-high income (doctors, attorneys, entrepreneurs etc) and frugal lifestyle, and did not receive much financial help from their parents. This surprised me, since I was under the impression that most of the people considered rich came from rich backgrounds.2

While most of the book relies on general advice, such as saving money and not buying expensive status products, there are quite a few concrete guidelines:

  • Don’t buy expensive homes more that 2 times the yearly income
  • Cars lose 60% of value in 5 years (bad investment)
  • You don’t need to pay more than $300 for a watch and more than $1000 for a suit, or $54000 for a car3
  • You can’t buy back your childhood

The last parts of the book touch on family and children. It seems to be important for your spouse to be as frugal as you are, because you’ll never manage to save enough if one of you spends too much. It also seems important to instill frugal values in children, otherwise they’ll expect monetary gifts from you all the time (the authors call it “economic outpatient care”). At last, the book gives advices for occupations that the affluent may need in the future. It what you’d guess anyways: doctors, dental techniciants, niche attorneys like income tax and real-estate, private tutors in niche areas like music and SAT exams, accountants, house builders and interier decorators, travel experts etc. I’ll admit I skimmed the last parts as I didn’t find them too relevant at the moment, but I wrote the notes anyways.

It was interesting to read how most of the affluent parents don’t want their children to go through what they did go through. Most of the millionares are entrepreneurs, but they want their children to become self-employed specialists like doctors, accountants and attorneys.


The narration is done through quite a few case studies. I’m impartial about this: while it seems to drive the point home, the cases sometimes sound made up just to tell a story. This gets tedious after a while and, near the endm starts to read like a dramatic script.

But, I’ve never read a book that tells the main point (“Don’t overspend, save and invest as much as you can”) in so many different ways, in various situations and with various actors. I got to see how a multitude of (alleged4) millionares think, what are their values are, how they spend or allocate their money, how they search for cars, suits, shoes and so on. Really made me think about what have I spent money on, that I didn’t (or still don’t) need.


On good education 1:

Being well educated has certain economic drawbacks.

On good education 2:

They can take your business, but they can’t take your intellect!

On having your own business:

Most people have no business ever working for themselves.

On building wealth 1:

To build wealth, minimize your realized (taxable) income and miximize your unrealized income (wealth/capital appreciation without cash flow). (but not by cheating on taxes, but allocating resources in a smarter way)

On building wealth 2:

Your plan should be to sacrifice high consumption today for financial independence tomorrow.

On freedom:

Most successful business owners will tell you that they have tremendous freedom. They are their own bosses. Also, they tell us that self-employment is less risky than working for others […] as they get more sources of income.

  1. The book was an assigned reading from another, very short, book on personal finances 

  2. Then again, this was in 1996 

  3. Then again, this was in 1996 

  4. I’m still kinda sceptical on all these personas