Human nature is funny sometimes. Even when we are doing well, many of us remain quietly curious about how we compare with the people around us.
Are our neighbors paying more in property taxes for a similar home? How often do they go out to a nice steak house? Did they just buy another new BMW? How much financial aid are they receiving for two children in college? What could they get for their house if they sold it today? Are they invested in crypto? What is their estimated net worth? And how much did they really spend on that expensive-looking landscaping project?
We are not necessarily nosy neighbors. We are just curious.
That curiosity is understandable because outward signs of wealth can be misleading. The family with the impressive home, new SUV, club membership and frequent vacations may be financially strong. Or they may be spending aggressively to maintain a lifestyle that is more fragile than it appears. Meanwhile, the neighbor driving a ten-year-old sedan, mowing his own lawn and quietly running a small business may be the one with the stronger balance sheet.
That contrast is at the heart of The Millionaire Next Door, the 1996 personal finance classic by Thomas J. Stanley and William D. Danko. The book’s core message remains powerful: Many truly wealthy people do not look especially wealthy. They build wealth through discipline, restraint, planning and a consistent preference for financial independence over status.
That lesson may be more relevant than ever. The United States has seen a significant increase in the number of millionaire households and individuals, driven by long-term stock market gains, retirement account growth, business ownership and rising home equity. BusinessStats estimates that the U.S. has approximately 24 million millionaires in 2026, representing about 8.8% of American adults, or roughly one in 11 to 12 adults (see chart). UBS’s 2025 Global Wealth Report, reports the U.S. is home to nearly 40% of the world’s millionaires; over 379,000 new millionaires were minted last year averages out tomore than 1,000 new millionaires created every single day.
Growth of US Millionaires Over the Last 20 Years
| Year | Estimated Number of U.S. Millionaires | Context and Core Drivers |
|---|---|---|
| 2006 | ~8.3 million to ~8.7 million | Peak of the mid-2000s real estate boom before the Great Recession |
| 2016 | ~10.8 million | Post-recession recovery and an extended Wall Street bull market |
| 2026 | ~24.0 million | Post-pandemic asset inflation, technology gains and rising home equity |
Source: BusinessStats and UBS 2025 Global Wealth Report
The numbers are impressive, but they also require context. A $1 million net worth does not mean what it did 25 or 30 years ago, particularly in high-cost markets where much of that wealth may be tied up in a primary residence. It also does not automatically mean a family has a sustainable retirement income plan, adequate liquidity, tax efficiency or a thoughtful estate strategy.
In other words, becoming a millionaire is one milestone. Remaining financially secure is another.
The Difference Between Income and Wealth
One of the most useful ideas from The Millionaire Next Door is the distinction between people who earn well and people who accumulate well.
The authors describe two broad types of households. Under Accumulators of Wealth, or UAWs, often have strong incomes but relatively low net worth because they spend heavily to maintain a high-status lifestyle. Prodigious Accumulators of Wealth, or PAWs, are more efficient at turning income into lasting wealth. They are not necessarily the highest earners. They are often the best savers, planners and stewards of capital.
The book offers a simple formula to estimate whether a household is accumulating wealth efficiently:
Expected Net Worth = Age × Pre-Tax Annual Income ÷ 10
A household with actual net worth of twice that expected number or more would be considered a Prodigious Accumulator of Wealth. A household with actual net worth of half that expected number or less would fall into the Under Accumulator category.
The formula is not perfect. It does not account for inherited wealth, regional cost differences, career interruptions, divorce, health events or the unique circumstances of business owners. But it remains a useful conversation starter because it shifts attention away from income alone and toward the more important question: How much of your financial opportunity are you converting into durable wealth?
Five Lessons from The Millionaire Next Door
1. Practice defense as well as offense.
High income creates opportunity, but wealth is built by what remains after spending, taxes, and lifestyle costs. Investment returns matter, but household discipline often determines whether wealth compounds or slowly leaks away.
2. Minimize status spending.
Luxury cars, designer goods, expensive watches, and constant home upgrades may signal success, but they can also absorb capital that could otherwise be invested, preserved, gifted, or donated. The goal is not to avoid enjoying wealth, but to ensure spending reflects values—not social comparison.
3. Allocate time and energy intentionally.
Millionaire households tend to plan deliberately. They think about taxes, investments, insurance, estate planning, and major family decisions. They often work with trusted advisors, accountants, and attorneys to bring coordination and clarity to complex financial lives.
4. Be careful with “economic outpatient care.”
Ongoing financial support for adult children can be generous, but it may also weaken independence or create family tension. For affluent families, the question is not simply whether to give—it is how to give in a way that encourages responsibility.
5. Recognize where wealth creates opportunity.
As families accumulate wealth, the need for coordinated advice often grows. Tax planning, estate planning, business succession, philanthropy, and investment management all become more important as wealth becomes more complex.
Meet Sally
Consider a hypothetical client named Sally. She is 62 years old, earns $150,000 annually and has accumulated a $2 million net worth.
Using the book’s formula, Sally’s expected net worth would be:
62 × $150,000 ÷ 10 = $930,000
Her actual net worth of $2 million is more than twice that baseline. Her wealth ratio is approximately 2.15 times expected net worth, placing her in the Prodigious Accumulator category.
What does that suggest?
First, Sally has likely played good financial defense. She may not have had an exceptionally high income compared with many affluent households, but she converted a meaningful portion of her income into lasting wealth.
Second, she may have avoided the consumption trap. Many households earning $150,000 feel pressure to buy larger homes, newer cars or more visible signs of success. Sally appears to have made different choices.
Third, Sally’s next challenge may not be accumulation but stewardship. At age 62, she may need to think carefully about retirement income, taxes, healthcare costs, Social Security timing, portfolio risk, estate documents and family support. She may also need to decide how much help to provide children or grandchildren without disrupting their own financial independence.
This is where wealth planning becomes more personal. The goal is not simply to have a high net worth. It is to understand what that wealth is designed to do.
Putting These Ideas to Work for You
For many families, the “millionaire next door” lesson is not about denying yourself or living with unnecessary austerity. It is about making sure lifestyle decisions, investment decisions and family decisions are working together.
A strong financial plan should help answer several practical questions: Are we spending at a sustainable rate? Are we taking the right amount of investment risk? Are we holding too much wealth in illiquid assets? Are we using tax-aware strategies where appropriate? Are we helping family members in ways that encourage responsibility? Are our estate and charitable plans aligned with our values?
The answers will be different for every family. But the discipline behind the questions is universal.
Years ago, when I lived in Bedford, New Hampshire, some of my most affluent neighbors seemed like “regular” people. They drove used sedans, mowed their own lawns, owned small businesses and did not seem especially interested in showing off. In hindsight, many of them were likely the real millionaires next door.
That is the point. You cannot always know much about your neighbors based on outward signs of lifestyle. The visible trappings of wealth do not always indicate sustainable wealth. Some people who look wealthy may be carrying significant debt. Others who seem modest may have quietly built financial independence over decades.
The good news is that the habits still matter. With restraint, common sense, thoughtful planning and guidance from your Aurelius Family Office team, the millionaire next door does not have to be someone else.
It could be you.
Disclosures
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