In studying how people became wealthy, Stanley and Danko made an interesting discovery: Many people in affluent neighborhoods actually had less wealth than those in middle-class areas. They define wealth as having amassed money and assets as opposed to having a high income. Many people with high incomes spend all their money and are actually cash poor.

The authors found that hard work, perseverance, planning, and frugality are more important in becoming wealthy than intelligence, college degrees, or inheritance. Most millionaires are not celebrities or heirs, but regular people who built wealth through strong financial practices. Of all the millionaires in America, 80% are first-generation rich, meaning they don't come from wealthy families. These people tend to live below their means, value freedom over appearing rich, choose the right profession, and spend their time, money, and energy wisely. The authors' repeated references to wealthy people’s frugality and sound financial practices suggests that becoming rich depends on learnable skills and work ethic.

At the time the authors were writing, half the wealth in America was concentrated in 3.5% of the population. Aside from home equity, the authors found that most households did not have many, if any, financial assets. Much of the population lacked the skills and knowledge to make investments. The authors lament that so many Americans live paycheck to paycheck, creating insecurity and instability in their lives and depriving them of the chance to build wealth and ultimately, independence.

The authors studied millionaires in America, relying on hundreds of interviews and surveys of wealthy people and their financial advisors. Stanley and Danko caution the reader that becoming wealthy involves hard work and making sacrifices, but promise to help them become more prosperous and secure.

Chapter Lesson

• Most millionaires are not heirs or celebrities, but regular people who work hard and have strong financial practices
• High incomes can finance nice lifestyles, but don’t necessarily lead to real wealth
• Wealthy people tend to live beneath their means to ensure they are continually saving funds

Reflection Questions

• The authors caution the reader that becoming wealthy typically means working hard and living frugally. What kind of changes, if any, would you be willing to make to your lifestyle in order to save money? Write down some possibilities and work them into your budget.
• Reflect on the possible difference between living a desirable lifestyle and having accessible wealth in the bank. Which is more important to you, and why?