5 Steps to Become a “Millionaire Next Door” - Darius Foroux

Here are the 5 steps you can take to build wealth and eventually become a “millionaire next door.”

Stanley identifies several professions in his book that would potentially earn well in the long term. But the most important aspect of a “right” career is a job that won’t become extinct in the future.

The pandemic has shown us that having a single income stream is too unstable. Just ask those restaurant owners who closed for months during the lockdowns. Or those employees who were let go.

Multiple income streams give us options. And options provide us with freedom and peace of mind. That doesn’t mean you need to own many businesses or work 5 side hustles.

“Wealth is a plentiful supply of a particular desirable thing.”

Having specific goals is fine. But try not to get too attached to outcomes.

For example, whether or not your business or job will earn you six figures in a few years is not entirely within your control. You can only control what you do and how you react to things.

Most people don't invest. After all, over 45% of adults around the globe aren’t capable of paying out of pocket for an emergency.

That means most people are not benefiting from the power of compounding. And they’re not leveraging the long-term growth of the market.

For people living paycheck-to-paycheck, the first priority is to build an emergency fund . Even just enough to cover a whole month’s expense. It’s best to start small, then aim for 6-months’ worth of expenses.

“It’s important to associate with people that are better than yourself and actually the most important decision many of you will make, not all of you, will be the spouse you choose. And you really want to associate with people who are the kind of person you’d like to be.You’ll move in that direction. And the most important person by far in that respect is your spouse. I can’t overemphasize how important that is.”

It’s no surprise The Millionaire Next Door data reports that most frugal millionaires have married spouses who are also frugal themselves. This avoids two things.

First, one doesn’t get stuck with a spouse who wastes all the money. Because it doesn’t matter how frugal or wealthy a person is if their spouse spends it all.

And people can prevent one of the top reasons why married couples fight: money.⁴ When you partner with someone who has the same money mindset, you’re less likely to have financial disagreements.