Millionaire Women Next Door

If you’re an avid personal finance geek like me, you probably are well aware of The Millionaire Next Door (one of the four books that changed my financial life). But are you aware that Dr. Thomas Stanley, who also wrote such great books as Stop Acting Rich and Start Living Like A Real Millionaire and The Millionaire Mind, also wrote a book about millionaire women? It’s called Millionaire Women Next Door.

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Yes, it’s true. If you’re a woman (like me), you probably noticed that his original Millionaire Next Door book featured almost all men (92% men, according to Page 11 of this book). This book is primarily about women business owners, although toward the end he does feature women who achieved millionaire status through part-time work, and through regular jobs. He also talks about women who “run the family office”, meaning that they’re a stay at home parent who manages money and finances to help the entire family achieve success.


Interestingly, if you’ve read The Millionaire Next Door and The Millionaire Mind, you won’t find a lot of new insights or advice here. Why is that? Because the path to becoming a millionaire doesn’t care about your gender. Money doesn’t know if you’re a man, woman, or a polka-dot-purple kangaroo. Money will work for you under the right circumstances-and will work against you in the wrong ones. This is a true fact no matter what your gender.

Formulas To See How (Financially) Well You’re Doing

Dr. Stanley again gets out his UAW/PAW (under accumulator of wealth/prodigious accumulator of wealth) formula, in addition to a few others, to help you see where you stack up on the wealth scale:

  • Expected net worth  = 1/10 (age) * annual realized income. Whether you’re under or over this forumla will show how good (or not) you are at transforming income into wealth. This income amount is pretax.
    • Side note – I first read these books in my 20’s, and the formula does not work well when you’ve only been in the work force a few years. Now that I’m 36 and not 26, they work better
    • Example: You’re 30 years old making 70k per year. Your expected net worth is 1/10 (30) * 70,000, or 3*70,000 = $210,000
    • If you’re significantly under this amount, you’re an under accumulator of wealth, and income statement affluent. If you’re significantly over this amount, you’re a prodigious accumulator of wealth, and balance sheet affluent
  • RON, return on net worth = Income divided by net worth. This formula shows you how much of your total net worth you realize as income each year. The higher the number, the higher your taxes – and the less time you could live without an income
    • Example: The same 30 year old making $70k per year has a total net worth of $100k. His RON would be $70,000/$100,000, or 70%
    • So every year, this person realizes 70% of their net worth as income. The lower your number, the more economically productive you are – and the closer you are to financial independence
  • EPI, Economoic productivity index = RON/100. This gives you the number of dollars you have in net worth per dollar of income
    • Example: The same 30 year old above has an EPI of $1.43 – for every dollar of income, they have $1.43 of wealth
    • Higher numbers are better here – the higher the number, the closer you likely are to financial independence

Women in Business

The book opens with a male business owner ranting to the author about how successful women are “unmarried… unkind… uncaring… unliked… undesirable… unattractive… unwanted… a bunch of angry, revenge-seeking workaholics”.

Wow. That guy really must have had some bad experiences.

Of course Dr. Thomas Stanley goes on to show just how wrong that statement is – these millionaire businesswomen are kind, caring, mostly married, and generous. Most (98%) are homeowners, 60% are college graduates, and they have a median income of $240k per year with a net worth of just under $2.9 million. They’re frugal when shopping for themselves, but generous when shopping for others or giving to good causes.

Although he’s profiling women business owners, he doesn’t spend a lot of time on their stories or their businesses. Instead, like with The Millionaire Next Door, he shares a lot of facts and statistics that show that these women, despite their wealth, are not living large and buying a lot of expensive stuff. They don’t spend time regretting the past – instead, they clearly define their goals and work to meet them.

These women are not necessarily intellectually gifted – they do work hard, spend wisely and make frugal choices. They also invest wisely, doing plenty of research and taking less speculative risks than men.

Part-Time Work

Dr. Stanley doesn’t stop at millionaire women business owners, which I appreciated. After all, when I first read this book in my 20’s, and even now, I wasn’t particularly interested in starting/running my own business. Even once I did start to think about starting my own business, my current reality is that I’m not running one, so reading about business owners – while interesting – can’t be directly applied to my life.

This section of the book covers millionaires who’ve achieved that status through income-producing real estate. It features the story of two people – a widow who owns property around a college, and a man who owns $5 million in real estate. To be honest, I did find it relatively annoying that he couldn’t find two women to feature in this section – really, there must be at least two women who’ve been successful in real estate!?! But Dr. Stanley’s reasoning was that the story was inspirational and achievable by anyone.

Alternate Routes – Working Women, Running the Family Office

After covering income-producing real estate, we come to my favorite section of the book – the section that covers millionaire women who work in ordinary jobs (sales, teaching) and who run the family office. This is the part that I feel is most applicable in my own life, and the part I got the most out of.

The first chapter in this section focuses on the story of Beverly Bishop, a high-earning car saleswoman who has achieved great success through study and hard work. Instead of “holding up the wall”, standing around at the dealership waiting for a customer to come in, she goes out and finds customers who need her cars. Sales commissions again don’t care about your gender, or your appearance – if you perform, you’re paid well. And Beverly outperforms everyone else by studying her inventory and car information, making calls, getting referrals, and serving her customers. She has no debt, drives an inexpensive car, and lives in a modest home – so she never feels financial pressure to try and squeeze every dollar out of a single sale.

The next chapter talks about wealthy educators. It might be surprising that educators are among those who are PAW’s. According to IRS data, about 20% of deceased women who had an estate of over $625k were educators. But, only about 7% of total women are educators. Teachers tend to be frugal, and wise spenders/savers. Nearly 70% of educators have no consumer debt. They also tend to donate more of their money to noble causes than high-income earners do.

The last chapter in this section talks about “running the family office”. This is for women who don’t work outside the home, and instead take on running all the family financial and investment decisions. Budgeting, forecasting, cash flow, investments, keeping lifestyle inflation in check – these are all things that people who run the family office can do to help the family become prodigious accumulators of wealth. There are a few letters in the book from women who don’t work outside the home, or who do only to not dilute investments by cash flowing college, who are responsible for their families financial success because of their excellent saving, spending, and investing strategies.

Millionaire Quotes

No Dr. Thomas Stanley book would be complete without a variety of excellent quotes around wealth, and how the lives of the wealthy aren’t what you might think:

These people cannot be millionaires! They don’t look like millionaires, they don’t dress like millionaires, they don’t eat like millionaires, they don’t act like millionaires – they don’t even have millionaire names. Where are the millionaires who look like millionaires?

If you look like, dress like, and drive like you have money to burn, it is unlikely that you are wealthy

Work with frugal people, and you may become frugal. Associate with colleagues who are astute investors, and you may become wealthy one day

If you want to become wealthy to consume, you are unlikely to ever be rich

Do you enjoy your hyper-consumption lifestyle so much that you must fly out of town every week to earn a paycheck to pay your bills? You are not too young to begin making the transformation to a cultivator of wealth.

(Millionaires)…super-ordinate goal relates more to financial independence and the pride of unsubsidized achievements than to owning a gallery of expensive consumer artifacts

Have you read The Millionaire Women Next Door, or its companion, The Millionaire Next Door? What did you think? Let me know in the comments.

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8 thoughts on “Millionaire Women Next Door”

  1. I didn’t realize this book was out there! I’ll have to share it with my wife, I’m sure she’ll enjoy it and learn something. I love the PAW acronym and calc! Balance sheet affluent is what matters to me and I’m proud to say I’m a PAW!

  2. I love the Millionaire Next Door, but I never realized it was predominantly men. Shame on me.

    This was my favorite quote: “If you want to become wealthy to consume, you are unlikely to ever be rich”. How true !
    Thanks for sharing !


  3. I love Millionaire Women Next Door and recently pulled out my copy to peruse yet again. The stories of women who run the family office resonate most with me as that as what I have done over our 30+ year marriage. I always find myself re-inspired when I read that section.

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