Having read The Millionaire Next Door, I was excited to go through Stop Acting Rich: And Start Living like a Real Millionaire when I received a copy of it. After reading the book, I found the book to be fairly good and would rate it as 3.5 on a 5-point scale. I would have given this book a higher rating had I not read The Millionaire Next Door, or I had found a lot of new information in this book. For most part, the book seemed like an extension of the Millionaire Next Book with the inclusion of updated data, and greater focus on the lifestyles of the rich people.
About the AuthorThe book is written by
Dr. Thomas J. Stanley who is a bestselling author of several books, including The Millionaire Next Door, The Millionaire Mind, Marketing To The Affluent, Millionaire Women Next Door, and Selling To The Affluent. He is considered as an authority on the lifestyles and behaviors of the affluent, and has been quoted several times in the popular media, including Forbes, Fortune, Time, and other magazines. He has also appeared several times on shows like the Today Show, 20/20, and The Oprah Winfrey show.
About the BookStop Acting Rich: And Start Living like a Real Millionaire consists of 243 pages of content (plus a few additional pages devoted to Appendices, etc) and the following nine chapters:
Chapter 1 - The Difference between Being Rich and Acting Rich
Chapter 2 - Everything You Think about Rich is Wrong
Chapter 3 - Do the Shoes Make the Man?
Chapter 4 - Brother, Do You Have the Time?
Chapter 5 - Keeping Up with Your Spirits?
Chapter 6 - The Grapes of Wrath
Chapter 7 - The Road to Happiness
Chapter 8 - Getting Out of the Poorhouse
Chapter 9 - All that Glitters Is Not the Millionaire's Goal
The book focuses on the differences in the spending patterns of the three different categories of people:
- The glittering rich: these are small percentage of truly rich people such as athletes and celebrities. These are the people who can spend lavishly on multiple luxury cars, yachts, watches, and houses, and still have enough money left over because of their huge financial fortunes and incomes.
- The millionaires (of the millionaire next door types): these are the people who became millionaires because of their frugal living. Being financially independent, getting recognized among their peers, and living within their means is more important to these people than wearing and flaunting luxury brands.
- The aspirationals: these are the vast percentage of people who aren't rich but try to appear rich by consuming expensive brands. These are the people who try to emulate the glittering rich by living in expensive neighborhoods, patronizing high-end retailers and restaurants, and buying premium watches, cars, and wines. Their emphasis is on looking rich rather than accumulating riches.
The main point of the book is that if you want to become wealthy, stop spending on expensive brands under the assumption that that's what most wealthy people do. Although the media has been claiming that the recent financial crisis and recession has forced many people to embrace the concept of frugality, according to the author, the slowdown is just a temporary blip and most people will resume their hyperspending lifestyle once the economy improves.
The book contains a lot of data that challenges the various assumptions about the spending behavior of the wealthy people. According to the author, the aspirationals should stop acting rich as their hyperspending is detrimental to their net worth. What's worse - their hyperspending isn't helping them much even on the happiness scale compared to the actual millionaires. Instead, they should emulate the behavior and lifestyles of the millionaire next door types people who aren't glittering rich but have accumulated substantial wealth by avoiding hyperspending and living within their means.
What I like about the book?This book is a good compilation of various misconceptions about the spending patterns of most rich people. While most people focus on the lavish spending of the small percentage of the glittering rich people, most millionaires are value-oriented who aren't affected by the constant pitches of advertisers to consume expensive things.
And the author illustrates his points with many several interesting anecdotes and personal experiences. For example, based on his experience as a caddy at public and private country golf courses, the author found that despite earning substantial incomes, most private club golfers never tipped their caddies. In contrast, most public club golfers not only tipped him but they also offered to buy him hot dogs and drinks for lunch.
Some of the interesting takeaways and quotes from the book are:
- Our society has confused the consumption of certain elite brands with true success.
- There's a difference between looking rich and being rich. Most people who look rich, actually aren't rich.
- Despite their lavish lifestyles, even the glittering rich people live within their means
- While the aspirationals don't mind spending on luxury brands and items, they become ultra frugal when it comes to tipping or spending on things that do not display their socioeconomic success and superiority.
- Between 1997 and 2006, more than $70 trillion in realized or reported income was generated by US households. However, only 3.5% of these households are in millionaire category (with investments of at least $1 million).
- In America, the proportion of people who owned boats in 2005 exceeded the proportion who left an estate of $1 million or more in 2007 by a ratio of nearly 5 to 1.
- Most people take celebrities and athletes as their role models instead of emulating the people who achieved wealth and success by working hard and living non-flashy lifestyles.
- Most millionaires are value-oriented and spend moderately on a wide spectrum of things, including clothing, haircuts, cars, homes, and so forth. Most of them also don't own a vacation home or a boat.
- Basic rule for building wealth: whatever your income, live below your means.
- Most millionaires don't have to "wear wealth" to impress other people. Instead they receive greater satisfaction from activities that involve social interaction with family and friends.
- Millionaires involve themselves in activities that are complements to wealth: analyzing their investments, studying their businesses and product or service industries, and so on
What I dislike about the book?As mentioned earlier, if you have read The Millionaire Next Door and read popular personal finance blogs like
ChristianPf and
Get Rich Slowly, there's not a whole lot new you will learn from this book. The central idea of the book is that most people need to embrace the concept of frugality if they want to increase their net worth but the book spends too many pages, emphasizing this point. As a result, the book often feels repetitive, with a lot of pages devoted to the preferences of rich people in terms of wine, watches, houses, and so forth. Infact, if you read Chapter 1, which I felt is the best chapter in the book, you pretty much get the entire summary of the book.
Final Word
