Fifteen years ago, Thomas Stanley and William Danko published The Millionaire Next Door: The Surprising Secrets of America's Wealthy. It was an instant bestseller, and today, there are more than two million copies in print. According to one of the authors, with whom I recently spoke, the lessons of the book hold firm, including that the identity of the person in your neighborhood with the highest net worth could come as a surprise. It might not be the private equity trader down the street. Or the doctor or lawyer up the block.
"The consistent finding that I have had for the last 30 years is that most who are wealthy are business owners, often of blue-collar businesses, that most others have ignored," Stanley told me.
Think janitorial. Or scrap metal (now "recycling"). And dry cleaning, especially the industrial variety. It's the successful owners and operators of such unglamorous businesses who have often been able to make money in one generation.
Stanley told me that these entrepreneurs tend to be more frugal than others of the same age and income. For example, his research shows that they typically live in areas where they have "five, 10, or 25 times more wealth than their neighbors." The median value of their homes? In the "low to mid-$400,000 range." And those homes are highly concentrated in the Midwest and the South, not in California or the Northeast, where, he said, you actually have the lowest probability of becoming a millionaire.
Another fascinating detail is what you are likely to find parked in the driveway of the millionaire next door: a Ford or Toyota. According to Stanley, the median price for a millionaire to spend on a car is $31,000, and most of them buy (not lease).
