Economist Nassim Nicholas Taleb noticed, in his own book, “Fooled by Randomness,” that the picture painted by “The Millionaire Next Door” was the product of survivor bias - “the authors made no attempt to correct their statistics with the fact that they saw only the winners,” he wrote. Olen reminds us that the Stanley millionaire model was a bit fraudulent from the start. Remember Mitt Romney? As a presidential candidate, his advice to young students was: “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.” But what if your parents don’t have any money? That makes a big difference, because it’s rarely appreciated that many small businesses start with family investments. “Only a minority of us drive the current-model-year automobile.”īut as Helaine Olen points out in the most clear-eyed valedictory to the late Stanley, his book “was already describing a vanishing world when it was published.” Fewer young people starting their careers today have had even the middle-class upbringing or family resources of so many of Stanley’s quiet millionaires. “We wear inexpensive suits and drive American made cars,” the book said in the voice of its putative heroes. Danko, defined the “prototypical” American millionaire not as an ostentatious Gatsby or Trump but as the proprietor of a “dull-normal” small business - “welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.” His (mostly) or her median income was $131,000, and median net worth $1.6 million. Stanley’s 1996 book, co-written with William D. The other is the death of one Ronald Read, a Vermont retiree who appeared to be one of Stanley’s emblematic secret blue-collar millionaires - after a lifetime of low-wage menial work and frugal living, he was discovered to have amassed a fortune worth about $8 million.
Stanley, coauthor of the bestselling book “The Millionaire Next Door,” in a car accident. The first is the death last week of Thomas J. Two recent events are both driving it forward and exposing its basic phoniness. The idea that the average guy can become rich via hard work and rigorously virtuous thrift is one of the compelling myths of the American experience.īut for the most part, myth it is.