It has been nearly 25 years since The Millionaire Next Door: The Surprising Secrets of America’s Wealthy was published, but its concepts of money and wealth still hold true. Authors Thomas J. Stanley and William D. Danko offer timeless lessons for achieving financial independence.

Here are seven of those lessons:

1. Income and the material possessions you accumulate are not wealth. Some people think nice incomes and high living standards are wealth. Luxurious cars, big homes, expensive watches and clothes, lavish home furnishings, private schools for kids, etc., may project the appearance of wealth, but they do not contribute to net worth — the real measurement of wealth.


2. Net worth is the value of your appreciable assets, minus your liabilities/debts. Appreciable assets represent stakes in “ownership” that increase in value over time. These include stocks, a business, or properties (minus the mortgages).

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3. Most wealthy folks in America are people you would never know are wealthy. “Wealthy” is defined here as a net worth over a million dollars. The wealthy are thrifty with their money. They accumulated their wealth by not spending on material goods that do not contribute to net worth. They minimized their expenses and maximized their allotments to wealth creating assets.


4. Over 80% of the "wealthy" in America are ordinary workers who live in ordinary homes, drive ordinary cars, own their cars for a long time, furnish neatly but not extravagantly, and wear ordinary clothes. They committed to a life and career of living below their means to enable them to invest in ownership assets to build wealth.


5. In America, we are told that high incomes and our collection of trinkets determine our success and status. It’s time to set the story straight. (You may be of an age beyond improving your situation, but your children or grandchildren may need to hear this lesson.)

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6. Want to determine where you are on your journey to reach your appropriate net worth? Multiple your age by your total pre-tax incomes. Then divide it by 10. This equals your expected net worth for your age and income level.


7. Net worth provides for future financial freedom. Living on career income alone means you can never retire as continued income is your only means of living.