Why 'Don't Act So Rich' May Be the Only Financial Advice You'll Ever Need

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.
— Stanley & Danko

When Thomas Stanley and William Danko studied American millionaires, they wanted to understand how they got and kept their fortunes. What they found overturned a lot of popular assumptions.

Wealth, they discovered, is not the same thing as income. You can earn a high salary and still be broke. You can own a luxury car and still owe more than you save. That’s not wealth. That’s spending.

Wealth is what you accumulate, not what you spend.
— Stanley & Danko

Their research showed that the true markers of wealth were usually invisible from the outside. Quiet homes. Modest neighborhoods. Old cars. The truth is, the financially independent often live in the least flashy places.

Stanley and Danko also found that having wealth didn't depend on luck or IQ. It just required living beneath one's means.

Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.
— Stanley & Danko

When they published their book in 1997, more than seven million households in America earned over $100,000 a year, a very good income at the time. Even so, many of those families lived paycheck to paycheck.

Stanley and Danko believed that anyone earning a solid income had the chance to build real wealth. But to do that, they had to stop measuring success by how it looked from the outside. They had to prioritize savings over status symbols. Or, as Stanley put it in the title to his follow-up book, they had to stop acting rich so they could start being rich.

The Millionaire Next Door is still a great read, as is Stanley's follow-up book: Stop Acting Rich. They are invaluable for inculcating the right outlook and habits.

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