The Millionaire Next Door

To Be Happy-Stop Acting Rich

What explains happiness in life?  I don’t have all the answers.  But, as a review of both my books and blogs,  happiness in life has little to do with the brand/price of the watch one wears, the stores one patronizes, the make of car one drives or the brand of vodka one consumes.  One’s overall happines in life has nothing to do with the overall price one pays for wine, the size or market value of a home, not even the price one pays for a haircut. 

To shed more light on this issue, I examined the relationship between happiness in life and more than 200  characteristics, behaviors and attitudes of 1,574 high income/high net worth respondents from one of my national surveys.  Note that correlations do not necessarily indicate cause and effect.

Beyond health, family and job factors, why are some people more satisfied with life than others?  In terms of statistical significance, the higher one’s level of happiness the more likely he/she is to agree with the following statements [by rank order of variation explained]:

1.  I have more wealth than most people in my wealth/income group.

2.  We are financially better off than our neighbors.

3.  I donated 5% or more of my income last year to charity. 

4.   I live well below my means.

5.   I was raised in an atmosphere filled with love and harmony.

6.   My parents taught me how to invest and manage money.

7.   Politically, I am more conservative than liberal.

8.   I inherited less than 1% of my net worth.

9.   My spouse is more frugal than I am.

10. I invested 10% or more of my income last year.  

Also note that both net worth and income are associated with happiness.  Statistically, net worth is the more important of the two.  But even more important than net worth is relative net worth (as suggested in Item 1 above).  Relative net worth is all about how productive one is in  transforming his/her income into net worth compared to others in one’s income and age cohort as well as within the context of one’s neighborhood environment. 

Those who can easily afford their consumption lifestyle tend to be significantly happier than those who struggle to make ends meet by acting rich.  I have consistently found that those within the same income/age cohorts who were raised by loving and nurturing parents tend to spend less and save more of their incomes than those who are not raised in this type of atmosphere.  

6 thoughts on “To Be Happy-Stop Acting Rich”

  1. 5. I was raised in an atmosphere filled with love and harmony.

    6. My parents taught me how to invest and manage money.

    Unfortunately, there’s nothing I can do to go back in time and try to convince my parents how much more happy I could be if they would have raised me in a better atmosphere. But also, as I grew up and saw their lack of financial literacy it helped me to realize that I had to search for answers elsewhere. Even though they didn’t teach me anything about finances, it was good that they made their mistakes clearly evident. Children aren’t dumb, they know when their parents don’t have the answers — the best thing my parents did was not to try and justify their mistakes and allow me to find people that were winning with money so I could model better behavior.

  2. Love your books. I have TMND, just read Stop Acting Rich, and have a hold on TMM at the library. I love opinion based on statistical information. Keep up the good work!

  3. Bruce Benson (

    I did notice that when I was young I didn’t spend as much on the “toys” that my peer group did (military officers). I found I did need to have a minimum of things that worked and worked well like a car, a couple of good suits, stereo, etc. but they had to be good values (e.g., Honda, Men’s Wearhouse). Once I had these, it allowed me to be comfortable when “mixing” with my peer group or any other social situation. I wanted to feel comfortable in these situations, but I had no need to have the best of anything.

    1. I have more wealth than most people in my wealth/income group.

    2. We are financially better off than our neighbors.

    These two bother me a bit. I’m just not convinced that this is a good thing in the long term. I think of the once wealthy who “jump from windows” when the economy fails (I believe at least one billionaire committed suicide, even thought he was still a billionaire). If my self worth is caught up in my net worth then I’m living on thin ice. This past recession helped me to remember that I am not my net worth nor am I my corporate job.

  4. 5. I was raised in an atmosphere filled with love and harmony.

    Reading your books has helped me to realize, living without credit cards, driving used cars, and no mortgage is a good place to be. I am there. *grin* Yet, I’d like to have a savings and more play money. Maybe that’s normal.

    Thanks for writing ‘The Millionaire Next Door’.

  5. Dr. Stanley,
    I recently purchase the 7 cd set of Stop Acting Rich. I am on cd #5. Thank you so much for putting this book and cds together! It really puts you in the right mindset how the millionaires think and do with their money and how us regular folks just throw away money and try and act rich! I have read your Millionaire Next Door book also my youngest daughter who graduated from Georgia State Univ.this May gave me The Millionaire Mind for a Father’s day gift last year. But, I haven’t read it yet. But, next month I will be reading it too! Thank you soon much in all you do! Keep doing what you do!I hope to meet you one day soon so you can sign my books. Thanks!

  6. I enjoy reading the rags to riches article.I’ve learned to be a saver and began 15 years ago to apply debt free living principles. I wouldn’t consider myself rich with the money that is saved and realize there is another part to increasing assets. This is the part I haven’t mastered- how to create wealth from a business venture or just become a better salesperson at life.

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