This week, Money360 is conducting a detailed review of the often-lauded personal finance book The Millionaire Next Door. First published in 1996, the book has held a consistently high level of popularity for more than a decade. What valuable insights does this book contain? Let’s find out.
Yesterday, we learned that the typical millionaire approaches life decisions with a steady hand and a plan, thus concluding the book. The next question to address is whether or not the book is worth reading or buying.
The Millionaire Next Door has a substantial amount of good content – more than two hundred pages of non-filler written in a reasonable sized typeface. This is in contrast to many personal finance books which are written in an enormous typeface in order to spread out a small amount of content to the point where it appears to fill a larger book.
The material in the book is cohesive and presents a logical and straightforward worldview, meaning you won’t find contradictory statements throughout. The writing is very readable; I’d even go so far as to call it a “quick read,” though the book wasn’t all that short.
My primary nitpick with the book is the prevalent age bias. There is very little of this book that addresses people under 40 or people who are just getting started with personal finance outside of some general guidelines that can be found in any personal finance book. The meat of this book is written for people who are approaching retirement and are dealing with adult children, a situation that (for me) feels a long way off.
I give the book a “buy” recommendation if you are over the age of forty, if you have substantially greater assets than many people in your age group, or you are interested in long-term financial planning. The book does a great job of outlining what people should be doing in middle age if they want to build substantial wealth (and enable their families to carry on this tradition) for their later years.
On the other hand, I give the book a “not buy” recommendation if you are young and without appreciable assets. At this point in your life, the focus should be on building a solid foundation for your financial life and this book does little to address that topic. Your time and attention is almost assuredly better spent somewhere else.
Next week, Money360 will begin a five part series on another personal finance book, so come back Monday to see what we have in store!
The Millionaire Next Door is the first of fifty-two books in Money360’s series 52 Personal Finance Books in 52 Weeks.