Revisiting the Millionaire Next Door

[AthenaAwakened]

The death of the 'Millionaire Next Door' dream

But as Helaine Olen points out in the most clear-eyed valedictory to the late Stanley, his book "was already describing a vanishing world when it was published." Fewer young people starting their careers today have had even the middle-class upbringing or family resources of so many of Stanley's quiet millionaires.

That makes a big difference, because it's rarely appreciated that many small businesses start with family investments. Remember Mitt Romney? As a presidential candidate, his advice to young students was: "Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business." But what if your parents don't have any money?

Olen reminds us that the Stanley millionaire model was a bit fraudulent from the start. Economist Nassim Nicholas Taleb noticed, in his own book, "Fooled by Randomness," that the picture painted by "The Millionaire Next Door" was the product of survivor bias -- "the authors made no attempt to correct their statistics with the fact that they saw only the winners," he wrote. What of the millions of investors who invested in the wrong things or whose paving companies failed? They outnumber the winners by a large margin.

Interesting article

 

[Derec]

I think it's still quite possible to amass a fortune by living significantly below your means for a working lifetime. But is it really desirable anyway? You can't take it with you anyway so why not spend some of it on nice things and enjoyable experiences like travel? In a way people like Read are the polar opposite of people living beyond their means we talked about in the poverty threads. Both are misguided.

 

[Loren Pechtel]

The death of the 'Millionaire Next Door' dream

Interesting article

Doesn't make it right. Following the article to it's source I find this stupidity:

According to a 2013 survey by U.S Trust, around a third of Baby Boomers worth more than $3 million claim to have grown up in a lower middle class home, versus 18 percent of Generation Xers, and 12 percent of Millennials. Why the change? In our increasingly class stratified society, it takes money to make money—frugal habits be damned. Even Mitt Romney suggested youngsters on the make turn to mom and dad for the funds to start a business. People who have taken that advice include Jimmy John Liautaud, the founder of Jimmy John’s, and Steve Ells, the man behind Chipotle.

Of course they found this, it's not a rebuttal at all. It's simply a matter of time.

The ones that made it to the millionaire realm quickly probably had a head start.

 

[Axulus]

Doesn't make it right. Following the article to it's source I find this stupidity:

According to a 2013 survey by U.S Trust, around a third of Baby Boomers worth more than $3 million claim to have grown up in a lower middle class home, versus 18 percent of Generation Xers, and 12 percent of Millennials. Why the change? In our increasingly class stratified society, it takes money to make money—frugal habits be damned. Even Mitt Romney suggested youngsters on the make turn to mom and dad for the funds to start a business. People who have taken that advice include Jimmy John Liautaud, the founder of Jimmy John’s, and Steve Ells, the man behind Chipotle.

Of course they found this, it's not a rebuttal at all. It's simply a matter of time.

The ones that made it to the millionaire realm quickly probably had a head start.

Yeah, really shoddy reporting. The age of the individual makes a huge difference on wealth.

 

[AthenaAwakened]

Doesn't make it right. Following the article to it's source I find this stupidity:

According to a 2013 survey by U.S Trust, around a third of Baby Boomers worth more than $3 million claim to have grown up in a lower middle class home, versus 18 percent of Generation Xers, and 12 percent of Millennials. Why the change? In our increasingly class stratified society, it takes money to make money—frugal habits be damned. Even Mitt Romney suggested youngsters on the make turn to mom and dad for the funds to start a business. People who have taken that advice include Jimmy John Liautaud, the founder of Jimmy John’s, and Steve Ells, the man behind Chipotle.

Of course they found this, it's not a rebuttal at all. It's simply a matter of time.

The ones that made it to the millionaire realm quickly probably had a head start.

A rebuttal of what specifically? You bring this book up more often than a baptist preacher brings up John 3:16. I'm starting to think it is the only book you have ever read. That being said, surely you can elaborate on exactly what critics get wrong about this truely miraculous tome.

Tell me Loren, does the book talk about the would be millionaires or just about the success stories? Does it talk about why everyone who shoots for being a millionaire doesn't make it, and what is the failure rate?

Since you forgot to link to your quote, I'll do it for you.

http://www.thebaffler.com/blog/millionaire-next-door/

And oh look at what follows that quote

Truth be told, there were signs of trouble with Stanley’s thesis early on. The Baffler’s own Tom Frank took the book to task in his book One Market Under God, published in 2000, calling it “filled with questionable science and repulsive ethnic stereotyping.” Nassim Taleb piled on a few years later in his book Fooled by Randomness, making the astute point Stanley and Danko failed to account for survivor bias (most small businesses fail!) when making claims that small business owners shared character qualities that led to their financial success. “This tells me the unique trait that the millionaires had in common was mostly luck,” Taleb wrote.

...

So what explains the continued popularity of The Millionaire Next Door in our current age, an age that celebrates personal excess and extravagance, even as more and more fall financially behind? Think of it this way: the book offers a virtuous cover for the financial sacrifices all too many are forced to make, telling its often-struggling readers that their cutbacks and continued downsizing will lead not to more sacrifices, but to prosperity. Like any self-help manual, The Millionaire Next Door claims to offer up a scheme for success, but is really in the business of selling optimism and hope. And those are forever popular commodities in the United States.

Hmmmm.

 

[ronburgundy]

Doesn't make it right. Following the article to it's source I find this stupidity:

According to a 2013 survey by U.S Trust, around a third of Baby Boomers worth more than $3 million claim to have grown up in a lower middle class home, versus 18 percent of Generation Xers, and 12 percent of Millennials. Why the change? In our increasingly class stratified society, it takes money to make money—frugal habits be damned. Even Mitt Romney suggested youngsters on the make turn to mom and dad for the funds to start a business. People who have taken that advice include Jimmy John Liautaud, the founder of Jimmy John’s, and Steve Ells, the man behind Chipotle.

Of course they found this, it's not a rebuttal at all. It's simply a matter of time.

The ones that made it to the millionaire realm quickly probably had a head start.

Their inference from cross-generational data that there has been a "change" in how people become millionaires is incorrect. But the data itself still shows how much one's wealth depends upon parental wealth. You said it yourself, you get to that $3 mill net worth more quickly if you "had a head start", meaning you were handed the countless advantages of being born into more wealth. IF they are getting there more quickly at a younger age, then it also means that a higher % of them will ever get there, and they will get farther past that benchmark than those born into less wealth. IOW, the likelihood someone "next door" will become a millionaire and exactly how many millions they will have is directly impacted by which side of tracks that neighborhood is in.

So long as Stanley fully acknowledged these undeniable empirical facts, then you're right, it isn't a refutation of his book.

 

[Loren Pechtel]

Doesn't make it right. Following the article to it's source I find this stupidity:



Of course they found this, it's not a rebuttal at all. It's simply a matter of time.

The ones that made it to the millionaire realm quickly probably had a head start.

A rebuttal of what specifically? You bring this book up more often than a baptist preacher brings up John 3:16. I'm starting to think it is the only book you have ever read. That being said, surely you can elaborate on exactly what critics get wrong about this truely miraculous tome.

I already explained it--age. It takes time to become a millionaire on one's own. The cohorts they are showing with a low rate of self-made millionaires are young--they haven't had the time to do it the normal way. It's like going to the university and concluding that old age is a myth because just about everyone you see around you is young.

Tell me Loren, does the book talk about the would be millionaires or just about the success stories? Does it talk about why everyone who shoots for being a millionaire doesn't make it, and what is the failure rate?

The reason I bring it up repeatedly is because your side believes about the only route to wealth is to inherit it.

Since you forgot to link to your quote, I'll do it for you.

Given how badly they missed the target on the age bit the rest of it should be taken with a whole shaker of salt, a grain isn't enough.

 

[Loren Pechtel]

Doesn't make it right. Following the article to it's source I find this stupidity:



Of course they found this, it's not a rebuttal at all. It's simply a matter of time.

The ones that made it to the millionaire realm quickly probably had a head start.

Their inference from cross-generational data that there has been a "change" in how people become millionaires is incorrect. But the data itself still shows how much one's wealth depends upon parental wealth. You said it yourself, you get to that $3 mill net worth more quickly if you "had a head start", meaning you were handed the countless advantages of being born into more wealth. IF they are getting there more quickly at a younger age, then it also means that a higher % of them will ever get there, and they will get farther past that benchmark than those born into less wealth. IOW, the likelihood someone "next door" will become a millionaire and exactly how many millions they will have is directly impacted by which side of tracks that neighborhood is in.

So long as Stanley fully acknowledged these undeniable empirical facts, then you're right, it isn't a refutation of his book.

Some people have a head start from parental wealth. A much larger number will reach that plateau on their own but they won't reach it as fast.

 

[AthenaAwakened]

A rebuttal of what specifically? You bring this book up more often than a baptist preacher brings up John 3:16. I'm starting to think it is the only book you have ever read. That being said, surely you can elaborate on exactly what critics get wrong about this truely miraculous tome.

I already explained it--age. It takes time to become a millionaire on one's own. The cohorts they are showing with a low rate of self-made millionaires are young--they haven't had the time to do it the normal way. It's like going to the university and concluding that old age is a myth because just about everyone you see around you is young.

Tell me Loren, does the book talk about the would be millionaires or just about the success stories? Does it talk about why everyone who shoots for being a millionaire doesn't make it, and what is the failure rate?

The reason I bring it up repeatedly is because your side believes about the only route to wealth is to inherit it.

You didn't answer the question AGAIN and I really want to see a quote from someone on these boards that says the only way to gain wealth is to inherit it. Answer the question and show the quote please.

Since you forgot to link to your quote, I'll do it for you.

Given how badly they missed the target on the age bit the rest of it should be taken with a whole shaker of salt, a grain isn't enough.

Wrong again Loren. but being wrong is your natural state at this point

 

[untermensche]

Some people have a head start from parental wealth. A much larger number will reach that plateau on their own but they won't reach it as fast.

I missed your data on these people who reached the hill top without any parental help.

Where are your figures? What is your source for these claims?

 

[arkirk]

I think it's still quite possible to amass a fortune by living significantly below your means for a working lifetime. But is it really desirable anyway? You can't take it with you anyway so why not spend some of it on nice things and enjoyable experiences like travel? In a way people like Read are the polar opposite of people living beyond their means we talked about in the poverty threads. Both are misguided.

And of course...you are well guided.

 

[Loren Pechtel]

Some people have a head start from parental wealth. A much larger number will reach that plateau on their own but they won't reach it as fast.

I missed your data on these people who reached the hill top without any parental help.

Where are your figures? What is your source for these claims?

What book is the subject of this thread?

 

[untermensche]

I missed your data on these people who reached the hill top without any parental help.

Where are your figures? What is your source for these claims?

What book is the subject of this thread?

Books are not scientific studies.

What studies did this data you speak of come from and what specifically is the data?

 

[Loren Pechtel]

What book is the subject of this thread?

Books are not scientific studies.

What studies did this data you speak of come from and what specifically is the data?

Books can report on scientific studies, though.

 

[Derec]

I think it's still quite possible to amass a fortune by living significantly below your means for a working lifetime. But is it really desirable anyway? You can't take it with you anyway so why not spend some of it on nice things and enjoyable experiences like travel? In a way people like Read are the polar opposite of people living beyond their means we talked about in the poverty threads. Both are misguided.

And of course...you are well guided.

Do you have any specific objection to what I wrote or are you being contradictory for its own sake?