The Millionaire Next Door

The Millionaire Next Door is one of the best business book I’ve ever read.

It carries a very inspirational message: anyone can become financially independent (=wealthy) having earned just an average income for their entire life.

The Millionaire Next Door secret is to limit personal spending and keep investing a portion of income.

To build wealth, minimise your realized (taxable) income and maximise your unrealized income (wealth/capital appreciation without a cash flow).

Very short excerpt from the book:

Who becomes wealthy?

  1. They live well below their means.
  2. They are compulsive savers and investors.
  3. They believe that financial independence is more important than displaying high social status.
  4. They are proficient in targeting market opportunities.
  5. They chose the right occupation.
  6. They have made their money on their own.

80% of America’s millionaires are first-generation rich.

I highly recommend reading this book to everyone. It breaks every stereotype commonly associated with the perception of ‘wealthy people’.

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