May 05, 1997 12:00 PM

So you think of millionaires as bejeweled Vanderbilts and Armani-clad movie producers? Actually, say Thomas Stanley and William Danko, the super-rich are far more likely to be schlubs wearing paint-spattered jeans and driving Ford F-150 pickups. “Most millionaires are nondescript, humble,” says Danko. “They make no effort to stand out in a crowd.”

Such truths are revealed in The Millionaire Next Door, the bestseller that Stanley, a former Georgia State University business professor, and Danko, who teaches marketing at the State University of New York in Albany, spent 20 years researching. The pair sent surveys to thousands of the 3.5 million American households with net worths of a million or more. Among those who responded, the main secret to wealth was modest spending. “Anyone can be wealthy if they make apian, be frugal and work hard,” says Stanley.

He and Danko have never lived extravagantly themselves. Married and a father of two, Stanley, 53, occupies an unassuming brick house outside Atlanta—and was recently scolded by his wife for splurging on a wedding-anniversary diamond. Danko, 44, lives with his wife and one of their three children (two are in college) in the two-story wood-frame house his grandfather built in Schenectady, N. Y. Neither author is wealthy—yet. “If this book keeps selling, “says Stanley, “I expect in two years we’ll be millionaires.” The two spoke to reporter Jill Jordan Sieder about the club they may soon join.

How do most millionaires make their money?

Stanley: Eighty percent of millionaires in America made their fortunes in one generation. Most of them own a business. Two-thirds of them are self-employed, often in blue-collar industries where you don’t need to wear a suit—the roofing contractors, the dry cleaners, the scrap-metal dealers. These people were not the A students in high school, they were the B and C students—what we call the smartest kids in the dumb row.

Are women less likely than men to become millionaires?

Danko: Yes, unless it’s through marriage. The high-paying jobs in this country—physicians, lawyers, optometrists—are more male oriented, and the women who go into them earn significantly less than the men.

Stanley: Also, we found that women in all professions tend to receive more of what we call outpatient care—financial help—from their parents. Daughters of the affluent aren’t encouraged to be as resourceful and self-reliant as sons, and that prevents them from building their own wealth.

Why aren’t there more millionaires in the white-collar professions?

Danko: If you’re a doctor or a lawyer or a stockbroker, you have to look the part. You’re under pressure to become part of the high-consumption culture, so you buy into the country-club memberships, the Caribbean vacations, the Jaguars—and that bleeds earnings away.

What are millionaires’ spending habits like?

Stanley: The median value of a millionaire’s home is $320,000. They’re more likely to buy their clothes at J.C. Penney or Sears than Saks Fifth Avenue—50 percent of the people [mostly men] we surveyed said they’d never spent more than $400 for a suit. They have a budget and stick to it.

How much do they tend to save each year?

Danko: The typical millionaire has earnings of $130,000 a year and saves about 20 percent of it annually.

Stanley: They spend time managing their money, planning their financial future. They convert their assets into investments that appreciate without paying immediate capital-gains tax.

Does education help you accumulate wealth?

Stanley: Education and good jobs are great offense. But saving and investing are great defense.

Danko: Parents tell their kids all about getting a good education and making a good living, but they never say “Save some of what you earn and be financially independent,” and kids need to hear that.

Can someone who makes $33,000—the average household income in America—really save enough to become a millionaire?

Stanley: Yes, certainly. What people don’t understand is how little it could take. We did an analysis of cigarette smoking and found that people who smoked three packs a day for 46 years, if they’d invested that money in Philip Morris stock over the years instead, they’d be millionaires.

Why squirrel your money away until you’re too old to enjoy it?

Stanley: You can enjoy it. But enjoy it by driving a four-year-old car and fishing in an old bass boat.

Danko: You don’t have to live a spartan life to attain wealth. You just have to live below your means

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