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The Middle-Class Millionaire: The Rise of the New Rich and How They Are Changing America
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List Price:
$23.95
Global Home Business Price:
$16.29
Your Savings: $ 7.66 ( 32% )
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Manufacturer: Broadway Books
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Average Customer Rating:   
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Binding: Hardcover
Dewey Decimal Number: 305.52340973
EAN: 9780385519274
ISBN: 0385519273
Label: Broadway Books
Manufacturer: Broadway Books
Number Of Items: 1
Number Of Pages: 240
Publication Date: 2008-02-26
Publisher: Broadway Books
Release Date: 2008-02-26
Studio: Broadway Books
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Editorial Reviews:
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A compelling look at a new class of the affluent - the middle-class millionaires – whose attitudes and values are influencing and reshaping American life
In this groundbreaking book, Russ Alan Prince and Lewis Schiff examine the far-reaching impact of the middle class millionaires–people who enjoy a net worth ranging from one million to ten million dollars and have earned rather than inherited their wealth. Comprising 8.4 million households and growing in number, the attitudes and behaviors of these working rich are exerting a powerful influence over our society. So who are these people? They believe in the benefits of hard work. They believe in investing in themselves, and in self improvement. They are more likely to focus on drawing financial gain from their work, and less inclined to be discouraged by failure. And they don’t spend money on the extravagances indulged in by the very rich; instead, they wield their affluence according to middle-class values and ideals. From home security systems to health care, technology to travel, their spending choices are affecting us all – from the products we buy, to the communities in which we live, to the aspirations and values of the broader middle class and American population as a whole.
In the bestselling tradition of Bobos in Paradise and The Millionaire Next Door, THE MIDDLE-CLASS MILLIONAIRE is a captivating narrative – part sociology, and part aspirational journey into the lives, attitudes, and values of the middle-class millionaires. Based on extensive surveys and research into more than 3,600 middle-class millionaire households around the country, this book will reshape our understanding of what it takes to be successful – and how all of us can achieve similar success.
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Spotlight customer reviews:
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Customer Rating:
Summary: Not as good as Millionaire Next Door and Richistan
Comment: I have read several of Russ Alan Prince's books. These books could be summed up by saying if you want to capture high net worth people as clients for your financial planning business, wine and dine their accountants and attorneys to gain access to them as clients. High net worth people all seem to have accountants and attorneys.
This book has a different focus. It attempts to compare the non-millionaire group with a head-of-household income of $50K to $80K with the millionaire group having a net worth between $1M and $10M. As other reviewers have pointed out, I was surprised to see the authors include house value in net worth. Because of housing differences in the U.S., most studies of net worth do not include housing values.
Growing up in Illinois, I was surprised to learn about some aspects of the hybrid seed corn study. Before hybrid seed corn, farmers kept the best corn from harvest to plant the next year. Hybrid seed corn offered higher yields and better resistance to insects and weather, but it meant becoming dependent on a seed corn company every year versus using your own corn for seed corn. Since this transformation occurred in the 1930's, this probably explains why I never heard of the trade-off decision between independence and reliance on the seed corn company each year. It is an interesting case of the adoption rate of new technology.
The author repeats the long known marketing strategy of selling new technology to the rich first at high prices, then lowering the price and selling to the masses. Automobiles, TV's, VCR's, and computers all used this approach. The author's latest addition is the $100K Tesla roadster, an all electric car as fast as a Porsche.
The U.S. financial planning industry is currently based upon charging about 1% of assets under management for fees. For a client with $500K in investable assets, the financial firm receives $5,000 annually. For a client with $10M, the firm receives $100K annually. There is no appreciable difference in the cost of servicing the $500K client versus the $10M client. The authors repeat the common strategy of trying to find 50 or 100 millionaires as clients versus hundreds of non-millionaire clients.
The authors also point out that fractional ownership has spread from jets to many different asset types.
The authors conclude with the 10 ways to become a middle class millionaire:
1. Get a coach
2. Tip the work-life scale to career versus family, friends, religion, hobbies
3. Focus on finding a job you can make money at and don't focus on careers that make you happy
4. Focus on ownership versus being a wage-slave
5. Don't diversify, focus your efforts
6. Play to win
7. Take calculated risks
8. Don't be afraid to fail
9. Network
10. Get help from other millionaires
The authors point out that wealth has become more concentrated in the last 20 years. They argue that the wealthy really control the amount of consumer spending, not the non-wealthy. They argue that the retirement of the Baby Boomers won't crash the stock market, because the wealthy own most of the stock market and have no need to sell. They also argue that one should not buy stock in Wal-Mart, but instead should buy stock in companies that focus on selling goods to the rich.
All-in-all, not as informative as The Millionaire Next Door or as entertaining as Richistan, but it does make a few interesting points.
If you are interesting in learning more about how to join the wealthy group, I would suggest reading some of the books noted below.
Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's
The Richest Man in Babylon
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
The Millionaire Next Door
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life
The Bogleheads' Guide to Investing
Wealth: Grow It, Protect It, Spend It, and Share It
Retirement Income Redesigned: Master Plans for Distribution: An Adviser's Guide for Funding Boomers' Best Years
Customer Rating:
Summary: There is no such animal as a Middle-Class Millionaire-it's an oxymoran
Comment: The Middle-Class Millionaire by Prince & Schiff
Besides serving as a shrill for some expensive start-up companies, it has little to recommend it. As they say themselves, the US now looks like a community of two classes, the poor and the rich, with the middle-class disappearing, so why use that tag-line in the title?
The market is giving a little comeuppance to those smiling, self-satisfied rich, now finding themselves a little less well-off.
Customer Rating:
Summary: Exceedingly helpful book
Comment: This book held my interest as few financial books can. It was enlightening, humorous, and helpful all in one. I was given some intriguing, and important insight into a base set of individuals it has become imperative to understand.
This book truly doesn't read as a dry text, but it is full of information vitally important to any person or organization dependent on understanding the spending habits of those who can advance their cause.
Customer Rating:
Summary: Some serious methodological issues
Comment: This book starts out by stating that there are 8.6 million "millionaires" in the US--about one in 35 people. However, the recently completed "World Wealth Report 2008" by Capgemini and Merrill Lynch puts the total GLOBAL number of millionaires at just 10 million, and the number of US millionaires at around 3 million--about one in 100 people.
How to account for the discrepancy? The authors of The Middle-Class Millionaire foolishly include housing "wealth" (home equity) in determining who is or isn't a millionaire in the US. That increases the number of millionaires by nearly threefold. That must have made it a lot easier for the authors to assemble a large database of "millionares", but at the expense of meaningful information.
Since the book was published in early 2008, we can assume the surveys took place in 2006-2007, when home values were meaningfully higher. As a result it is not surprising that they found so many "millionaires" on the east and west coasts--these regions of the country contain many house-rich people who've probably seen significant home equity declines since then.
There's a reason the Capgemini study excluded home equity: you can't "eat" your house. Wealth is something you can live on; a house is something you can live in. Certainly there are individual cases where an individual may monetize considerable house wealth to become "wealthy"--imagine an elderly person selling their house for millions of dollars and downsizing. But for society as a whole, it's erroneous to think this is possible--after all, if everybody tries to monetize their home equity, the home equity goes away, as the countless foreclosures around the country are now showing.
So, already, nearly two-thirds of the authors' target group don't belong there in the first place. Another problem is comparing people with one million dollars to people with ten times as much money and pretending they are in the same group. Sorry, but an order of magnitude is a big difference. Many financial advisors will suggest a sustainable portfolio drawdown range of 3-5%. On one million dollars, that is 30-50K a year; on ten million, it's 300-500K a year.
Is it really possible those two groups are really living in the same economic world? Sure, there are many people with small portfolios who live beyond their means, just as there are many rich people who live well within their means--Warren Buffett famously still lives in the same house he bought for 31.5K at the age of 27. But in general, when you have two wealth cohorts separated by an order of magnitude (from 1mil to 10mil), there are going to be big, big differences in perceived reality and behavior. If you include the 5.6 million "house millionaires" like the author did, the disparity between the bottom and top of this so-called middle class becomes even more severe.
I'm not saying people with 10mil live like the people in "Richistan" who have their own private golf courses, yachts, and planes, but come on, you are talking about a very, very small segment of the population. Let's not pretend they are living in the same world, with the same range of choices, as the rest of us.
So, I can't help but be pretty dismissive of the authors' broadbrushed "conclusions". Having said that, this book has some amusing tidbits that made it a worthwhile read to me. Whether it would be interesting to you is a matter of personal taste. I would suggest a thumb-through at the local bookstore.
Customer Rating:
Summary: Middle Class Millionaire
Comment: This book was interesting and well written but I was dissappointed that every chapter came off as an advertisement for some obscure company. If you are looking for a book about the values and habits of the middle-class trying to make their way up the ladder you will be dissappointed. The underlying theme, as I see it, is supposed to be that people with "middle class" values and money are willing to pay for quality services that add value to their life. I think the authors were trying to find a way to package their survey into something that would sell books. Being from the middle-class and being financially independant I do not know anyone like my "peers" in the book who will spend thousands of dollars a year to have someone review tech gadgets for them or get speedy doctor appointments. I would rather have my money working for me, not going into someone else's pocket because I was too busy to look something up on the internet.
This book was packaged as something similar to the "millionaire next door" but falls short in that the surveyed questions seem to be general and open to interpretation. Caring about your kids education does not meean that you are willing to spend $30k for someone to "coach" their college application for them. A middle-class millionaire would think the money was better spent on SAT prep classes and tuition then for someone to write a better cover letter.
The surveys also showed that the millionaires "cared most about their family" but also worked 60-80 hour weeks regularly. You would think if the middle-class family values were so important they would be working less and spending more time with family. Most of the conclusions about the survey seemed to be cherry-picked and sometimes contradicted each other.
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