Complaining about books is not something I often do. This book was brutal to read. While the idea behind the book is interesting, the book beats the topic to death through excessive repetition. If you struggle to sleep and often lie awake at night buy the Amazon Kindle version of this book and read it on your glare-free, e-ink Kindle and you will be dreaming in no time (I did this for months).
With that kill-joy of a disclaimer out of the way, this book could have been condensed in to a few paragraphs that describe how wealth is created: investing a large portion of your income. By investing in their private enterprises and forgoing consumption like John D. Rockefeller and Sam Walton became two of the Wealthiest people to ever live. Both titans of industry were remarkably frugal. In "The Millionaire Next Door" (TMND), authors Thomas Stanley and William Danko assert most self-made millionaires are also frugal by nature.
The concept is simple math. Wealth accumulates and grows in an exponential function (read: the more money - capital - you have, the faster it will grow). If you save (invest) a greater portion of your income, your wealth will grow faster.Stanley and Danko provide countless (and altogether too many) examples of people who save and invest and other examples of people who spend too much to generate vast wealth.
A useful discussion, also beat to death by TMND, was the relationship between a person's savings rate and their parents' wealth. Children often inherit a standard of living from their parents. If parents earn much higher incomes than their children, and the children assume a similar standard of living the children must then assume a much lower savings/investing rate. Stanley and Danko proceed cite examples of wealthy parents that subsidize their children’s lifestyle.
Two important lessons can be drawn from TMND. First: to achieve financial independence we must prioritize investing over consumption. Pay yourself first and build your capital base before you treat yourself to fancy clothes or expensive vacations. Second: instead of passing along our standard of living to our children we must focus on teaching them to invest and generate their own capital to grow.