Stop Acting Rich: ...And Start Living Like A Real Millionaire

I read Thomas Stanley's The Millionaire Next Door three years ago and was thoroughly impressed by the insights and research. While reading it I wished the author had published a revised edition with updated numbers - the book was published in 1998. This book (Stop Acting Rich...) covers similar themes as the book I previously mentioned. However, it has updated numbers and includes insights gained from the financial crises of 2008-2009.
The central theme of this book is that there is a difference between those that are genuinely rich and those that act like they are rich. This book details the differences between these two groups of people - what they wear, drive, eat, drink, etc. These differences, presented throughout the book in the form of several tables and lists, are backed by empirical data that are drawn from the author's extensive research on the affluent.
We live in a culture of hyperconsumerism. It is far easier to act rich than to become truly rich. All we have to do is to buy the luxury goods/services that we think the rich buy and we get the feeling that we are rich. But this kind of excessive consumerism is detrimental to our net worth. The author explains that most rich people become wealthy and stay that way by being frugal and by being investment oriented as opposed to consumption oriented. As for wealth and happiness he warns, "those who think that acting rich must be predicated on hyperconsumerism are likely to end up on the short side of both the wealth and happiness scales".
Throughout the book many myths about the rich are dispelled. Their consumption habits are described and compared with those of the pretenders. What brands of shoes, suits, watches, etc do they wear? What wines and spirits do they consume? What motor vehicles do they drive? Where do they shop? And how much do they pay for the goods listed above? The insights are illuminating and thought provoking.
During the financial crisis of 2008-2009, many articles were published regarding the benefits of frugality and the dangers of excessive consumption. In many ways the root of this crisis (sometimes referred to as the Credit Crisis) was excessive borrowing and consumption. I share the author's belief that as soon as the economy improves, people will resume their spendthrift ways. This is most unfortunate since it could lead to a repeat of the crisis we just experienced.
Bottom line - I highly recommend this book as the single best personal finance book I have read. You cannot save the whole of society from this disease of hyperconsumerism. But by educating yourself, you can simplify your lifestyle so that you can be truly rich as opposed to just acting like you are rich. If my review was helpful to you, I request you to select "Yes" so that the rating is improved and more readers will get to read it.

I'm a big plan of Tom Stanley's research and books. I first encountered Stanley at a trust conference many years ago, and I've read and recommended his books to dozens of clients and prospects. His insights are helpful and entertaining.

His newest book, Stop Acting Rich: And Start Living Like A Real Millionaire, reveals the differences between what we say and what we do. He chronicles the spending patterns of genuinely rich people, and the lifestyles they enjoy. It's interesting, because there are two groups of people with serious money: the glittering rich (think Donald Trump or Bill Gates) and the millionaires next door. And, as you'd guess, they consume differently.

Spending by the glittering rich, well, glitters. These are the few folks with so much money that spending really doesn't matter. They own multiple cars, multiple timepieces, and they tend to entertain lavishly. We all know who they are and they set a remarkable standard for living.

Other rich people are remarkable for differing reasons. As Stanley has recorded previously, they stand out for their modesty and good sense. These millionaires drive Toyotas, wear Seiko watches, and surround themselves with value-oriented merchandise. We know who these neighbors are, too, but we probably don't realize how financially successful they truly are. They set a different kind of standard.

Here's the paradox of this book. Almost everyone else (and that's a huge chunk of our society) dwells in yet another culture. This is the culture of false wealth. Where looking rich is more important than being rich. It's the world of luxury goods sold to high-income buyers. But, sadly, that spending pattern yields no genuine wealth. The simple act of buying those goods, by itself, is financially counterproductive.

These are residents of mini-mansion neighborhoods. And owners of luxury automobiles and Rolex watches. They send their children to private schools and belong to expensive country clubs. They buy Brooks Brothers suits and shop at exclusive department stores. They are glittering rich wannabes, and they spend most of their income on a prestige lifestyle. There's nothing left for saving.

The depressing truth is this book won't change much. Most of us would rather look rich than be rich. We like those luxury goods and that luxury lifestyle, even if we can't afford them. We can see how sensible living might bring stability and success. We know Tom's right, but we don't want to live in sensible neighborhoods or drive sensible cars or wear sensible clothes.

That's the paradox of Stop Acting Rich. We don't want to.

I looked forward to reading "Stop Acting Rich" but I found it to be too repetitive. Although the book is 200+ pages, I felt as though the first chapter covered the ultimate message and the remainder of the book only served to reiterate the concepts without significantly furthering them. Sure, some examples and data in later chapters further reinforced the message but one could easily get the message within the first few pages, skip the rest of the book, and still understand the point that less consumption, decreased spending, and more frugal living is more likely to help you gain wealth than buying fancy cars, expensive clothes, and enormous homes. I liked the book but felt a bit short-changed when I found the chapters to be so repetitive.

I absolutely adored "The Millionaire Next Door" and loaned my copy out regularly. The message of that book was spot-on and there were mounds of research to back it up. I was brought up with depression-era parents who were value-oriented and frugal. They didn't do without and splurged on things that were important to them but didn't waste a dime. I can remember going out to eat and not being able to order a cheeseburger and had to order a hamburger because the cheese cost 5 cents extra and that wasn't worth it. Cars were a means of transportation and were driven until they became undependable. The cars were also ordered without radios since they didn't listen to the radio when they drove, so why pay for something you weren't going to use?

As an adult I have largely maintained the basic philosophy of not worrying about what other people think of you and spending money based upon doing what makes me and my family happy. I have had friends who drove the BMW, that had the huge house, that took the elaborate vacations (philosophy they lived by was that if you can make the payment, you could afford it). Now that I am in my late 40's and time as moved forward, many of those same friends have filed bankruptcy, had to sell the house due to drop in income, etc. and several are having a hard time making it with the current economy. Saving was considered boring and I was actually ridiculed for not spending more money by one friend who eventually filed bankruptcy. Even after all of that, it seems that most people don't really learn their lesson. As soon as they are able, the spending on luxuries ramps back up, little shoring up of savings is done and they are no better off than they were before.

The series of books by Thomas Stanley really hits the nail on the head with who is truly wealthy (largely defined as assets of $1,000,000 or more) and those who are spending it as fast as it comes in so that they can live what they perceive to be the lifestyle of the "rich". What he started in that first book is continued on throughout his other books including this latest one "Stop Acting Rich ... and Start Living Like a Real Millionaire." I would love to make all these books required reading for college students right before they enter the world of work. It would be a real eye-opener for many of them and the ones that "get it" could be saved a lot of financial mistakes.

My bottom line on this particular book:

1) Holds a mirror up to the reader's face to take a good, hard look at the financial decisions being made
2) Pokes holes in the perception that spending money and buying things make you happy
3) Shatters the perception that people who are "rich" spend lavish amounts of money on luxury goods including cars, homes and other things to impress the people around them.
4) If the reader learns nothing else but the phrase "Big Hat, No Cattle" it's worth it.
5) On the negative side - it is pretty repetitive at times particularly when large amounts of time is spent on particular items - for example, the price of wine purchased and the number of bottles in the home

Many people won't like the message - talk about an "inconvenient truth" -- but all of us should listen.

I have read and enjoyed a few of the Stanley books. This one is as good as all his others. Reading books like this will help keep you from falling into the consumptive lifestyle. My wife and I own a small business that I started. We have a net worth of about $4 million, of which about $2 million is in cash and stocks. We have no debt. We give 10% to charity each year. I grew up on welfare, my wife not much better. We live below our means, drive Honda cars and have a $500k house in a MN suburb. We have maybe 20 years or so before retirement. I worked 100 hour weeks for years on end. I'm in no way trying to brag or be arrogant. If you can live below your means, save religiously, not succumb to our consumer oriented society, and give to charity, I think you have a recipe to easily be a millionaire someday. I'd like to retire with $10 million. If I don't make it, that's ok because I'm already so far away from those 18 years of welfare that I know I'll never be back there---ever.