Who Wants to Be a Millionaire? Compare Your Net Worth with the Millionaire Next Door

Thomas Stanley and William Danko's book, The Millionaire Next Door, is an excellent book that describes the somewhat surprising qualities of the average millionaire. For the most part, the millionaire next door makes an average salary. Although his income is not extraordinary, his ability to save money is. He lives well below his means. Unlike many high income producers like doctors and lawyers, he usually drives an older car and lives in a modest home. He is not concerned with his social image and therefore doesn't feel the need to spend money on status items. The fact is that the millionaire next door is basically an average guy with the uncommon ability to live on substantially less than he earns. This information is encouraging. Perhaps there's hope for us all to become millionaires!

One common measure of wealth is your net worth. If you're not sure what your net worth is, you should probably figure it out. It is easy enough to do. Simply add together all of your assets and subtract all of your debts. The remaining figure is your net worth. You should include the current market value of your assets such as your house and car. Also, don't forget to include any retirement savings or investments you may have. Your debts are usually easier to remember as you always receive that helpful monthly bill to jog your memory. Hopefully, when you subtract your debts from your assets you are left with a positive net worth. If your net worth is over a million dollars, you would be considered a millionaire. For those of us whose net worth figure falls a little shy of millionaire status, how can you judge whether or not you are on the right track financially? Well, Thomas Stanley and William Danko have included a formula to do just that in their book The Millionaire Next Door.