Breaking Bread with a Millionaire

by Oct 24, 2019Personal Finance

Several years ago, I had lunch with a friend to celebrate his retirement. He had just sold his small animal practice in the rolling hills of Pennsylvania to a younger colleague. He and his wife, also recently retired, were contemplating a care-free retirement.

We chatted about the profession, of course, but also about investments, the state of the nation and retirement. One of the guests was an 18-year-old student who looked utterly bored by our discussion.

After lunch, I told the teenager: “You know, these nice people are millionaires.” He was absolutely shocked. He could not comprehend that these modest, no-nonsense people could be so wealthy.

To him, being rich meant driving a Ferrari, wearing clothes by Versace and living in an extravagant McMansion. His knowledge of millionaires came from movies and music videos. Millionaires lived near Hollywood and were mostly actors, singers and athletes.

We then talked about the best-selling book “The Millionaire Next Door”. Authors Thomas J. Stanley, PhD, and William D. Danko, PhD, discovered that everyday millionaires are very different from stars celebrated in tabloids. The book was released over 20 years ago, but it’s still totally relevant today.

What do everyday millionaires do?

Real-life millionaires have a few traits in common, explained in the book. Here is a summary.


Millionaires next door don’t look or behave like millionaires. They are frugal, i.e. they live below their means, as opposed to buying custom-made, diamond-encrusted purses. Here is the irony: they very well could buy gold-plated trinkets, but choose not to. They don’t focus on instant gratification, but on long-term financial goals.

They tend to live in humble homes in modest neighborhoods. They follow the lead of Warren Buffett, one of the richest people in the world, who has lived in the same house in Omaha, Nebraska, for decades, even though he could easily afford a 50-bedroom McMansion in a fancy community — and pay for it with cash.


Millionaires next door invest their time and money early and wisely. They tend to be compulsive savers. They stick to a strict budget and keep expenses under control. If they take on debt, it’s “good” debt, used to buy assets. Assets tend to appreciate, whereas things bought with consumer debt tend to depreciate. Importantly, Millionaires next door don’t buy things to compete with the Joneses with “plastic.”


Millionaires next door may have a high income, but they are not big spenders. They realize that cars, for example, can become a huge expense over time. Because they prefer financial independence over showing off, they tend to drive modest cars and keep them for a long time, rather than leasing and trading them in every 3 years. Similarly, they would rather wear a Seiko watch than a Rolex. This all relates to their attitude toward money. They consciously choose being reasonable over showing off. 


Many people think that most millionaires inherited their wealth. In fact, more than 80% of Millionaires next door did not inherit their wealth – or receive financial assistance from their parents. Millionaires next door are self-made, thanks to plain old hard work.


Millionaires next door teach their kids to be financially independent. Based on their research, Drs. Stanley and Danko explain that economic support of adult children actually hinders their success. Millionaires know that teaching financial discipline is much more beneficial than financial support. 


Millionaires next door have a knack for spotting market opportunities. One reason for this is that they surround themselves with high-end advisers. Millionaires next door spend money on excellent accountants, estate planners, and tax and legal advisers.


Millionaires next door choose the right occupations, but not in the areas most people would assume. They are not all plastic surgeons in Beverly Hills. According to the authors, they work in dull industries, such as financial services, pest control, dentistry, bowling alleys and construction.

The common denominator is that they tend to own their business. “Self-employed people are 4 times more likely to be millionaires than those who work for others,” say the authors. Millionaires next door dedicate 45 to 55 hours to their business each week.

More Millionaire Advice

Our 18-year-old student friend was surprised by this description — it was not at all what he thought being a millionaire meant. I made sure he understood that working hard, saving compulsively and investing wisely do not require living like a scrooge. 

And I was surprised — pleasantly — that, instead of running off to chat with his friends on Facebook, he asked me questions about our topic du jour. 

We chatted for a few more hours, and he suddenly realized that personal finance was not something boring rich adults care about, but something he should learn ASAP if he wanted to live comfortably and retire one day.

Phil Zeltzman, DVM, DACVS
Co-Founder of Veterinary Financial Summit