The Millionaire Next Door

Almost everything Americans think they know about millionaires comes from TV. Stanley and Danko did the unglamorous work of actually surveying thousands of real ones, and the result is a book that quietly demolishes the conspicuous-consumption myth. The headline finding — that high income and high net worth are weakly correlated, and that frugality is the single best predictor of accumulated wealth — has aged better than almost any finance book of the last 30 years. The "PAW vs. UAW" framework (Prodigious vs. Under Accumulator of Wealth) is one of the most useful self-assessment tools in personal finance. Take your age, multiply by your income, divide by ten — that's roughly what your net worth should be. The chapters on "economic outpatient care" (parents bankrolling adult children) and the corrosive effect on both generations are uncomfortable and important. Yes, some of the cars and neighborhoods are dated. The principles aren't. Five worms. The book Jim recommends to anyone who looks at their wealthier- looking neighbor and assumes they have it figured out.