Spotlight interview: Thomas J. Stanley, Ph.D.
If you want to be rich, you need to stop acting like you have money in the bank and start living beneath your means. That's the message in the most recent book from Thomas J. Stanley, author of "The Millionaire Mind" and the "The Millionaire Next Door."
At a glance
Thomas J. Stanley, Ph.D.
Ph.D. in business administration, University of Georgia.
- Best-selling author of "The Millionaire Next Door" and "The Millionaire Mind" plus his most recent book, "Stop Acting Rich ... and Start Living Like a Real Millionaire."
- Author of more than 40 published articles on affluence in America.
- Chairman of the Affluent Market Institute, which develops strategies for marketing to the rich.
- Before researching and writing about America's millionaires, Stanley was a professor of marketing at Georgia State University.
Bankrate asked Stanley to explain what's fueling America's hyper-consumptive ways and unquenchable thirst for top-shelf brand vodka -- among other indulgences.
In your book "Stop Acting Rich ... and Start Living like a Real Millionaire," you say that rich people don't necessarily act the way that the rest of us might think they do. In fact, millionaires are more likely to be extremely frugal. Why is that?
There are many factors that explain frugality among the rich.
First, their parents tended to be not only frugal, but well-disciplined. Most millionaires today came from middle-class backgrounds. Their parents were not wealthy, but somewhat comfortable. Millionaires tell me that they never felt embarrassed by where they lived or the type of home they had. To a considerable degree, it is the uniquely American upward socioeconomic mobility that fuels much of the hyper-consuming engine of the market for luxury goods, prestige products, upscale brands, expensive homes and so on.
Beyond income, one's vocation has much to do with accumulating wealth. Educators, engineers, business owners and retail store managers have a tendency to live below their means and to be quite efficient in transforming their income into wealth.
It is the home/neighborhood environment that most explains one's ability to accumulate wealth. It may be useful for people to understand that there are 1,138,070 millionaire households living in homes valued under $300,000. This is far more than the 403,211 who live in homes valued at $1 million or more.
You describe different levels of wealth in the book. There are the glittering rich, the income (statement) affluent and the balance sheet affluent.
The glittering rich make up a small fraction of 1 percent of the household population. They have a minimum annual household income of seven figures and a net worth of eight figures and more. They are extremely wealthy people, and they spend accordingly.
But, as I said in "Stop Acting Rich," no matter what they spend their money on, it is just a fraction of their overall net worth. In other words, even the glittering rich spend below their means. There are no more than 80,000 glittering rich households in a nation of more than 115,000,000 households.