Stop Reading “The Millionaire Next Door”

The Millionaire Next Door, by Thomas J. Stanley and William D. Danko, is a book that is constantly recommended as the gold standard for personal finance.

Here’s a summary quoted from Wikipedia:

The authors compare the behaviour of those they call “UAWs” (Under Accumulators of Wealth) and those who are “PAWs” (Prodigious Accumulator of Wealth). Their findings, that millionaires are disproportionately clustered in middle-class and blue-collar neighborhoods and not in more affluent or white-collar communities, came as a surprise to the authors who anticipated the contrary. Stanley and Danko’s book explains why, noting that high-income white-collar professionals are more likely to devote their income to luxury goods or status items, thus neglecting savings and investments.

There’s nothing wrong with the book itself, and a lot of the advice is practical. You learn about the dangers of playing status games, and why it is important to buy assets…