Last year I read The Millionaire Next Door and it opened up my eyes to the reality that as individuals we are in complete control of how wealthy or poor we end up as adults. The research within this book, though slightly outdated, maintained that the truly wealthy were not the people conspicuously consuming material items. Instead, they were the blue-collar business owners and the middle-management husband and educator wife who saved much more of their income than they spent. They may not have been driving the most current vehicle or wearing the flashy Rolex, but most certainly could afford to do so. The bottom line was that the truly wealthy were prodigious accumulators of wealth (PAW), unlike the symbolic “Joneses” who are under accumulators of wealth (UAW).


After reading Millionaire, I researched where the term “Keeping up with the Joneses” came from and found out it derived from a cartoon strip meant as a parody on conspicuous consumption. I guess the ultimate irony was played on the succeeding American generations as more people than ever before can be categorized as UAW’s. But what I gathered from the book and the epiphany I had after reading it, was that anyone can be a millionaire; it just takes some lifestyle changes and understanding of the qualities leading towards a PAW versus a UAW.

PAW Qualities

• Save more than 20 – 25% of your income. It obviously helps if both spouses within a marriage can contribute a portion of their income towards savings. The earlier an individual or couple can start, the better as compounded interest grows over time.
• Purchase a home within 3-times your income. Most PAW’s own their own homes. However, most remain within 3-times their income limit. It’s even better if the home purchase is 3-times just one income, not two. Think of all the money that can be saved living off just one income and saving the other.
• Drive an older model car. Based on research, most PAW’s keep their cars for 10 years or more. Good quality, reliable cars that are taken care of can last quite a while. The benefits include no car payments and lower auto insurance.
• Marry a frugal spouse. It’s more difficult to become a PAW if one spouse is saving the money and the other is spending it all.

UAW Qualities

• Spend all or more of your income than you can afford. UAW’s often save very little of their income or none at all often relying on credit to cover emergency expenses.
• Live off your parents. The interesting thing about PAW’s is that those who fund their children’s lifestyles create UAW’s out of their children. (I know someone in this category.)
• Keep up with appearances. People of certain professions often feel they must appear successful and purchase the brand new BMW, buy the largest house on the block, and send their kids to Harvard. This behavior leads to an UAW down the road.
• Marry a spendthrift. Even the most diligent saver can be hoodwinked by a spendthrift spouse. If one spouse is depositing their income in the bank as quickly as the other is depleting it, you end up reverting to zero.

Thankfully, I’ve never categorized myself as a “Jones,” partially because I really don’t like shopping and have never been a slave to fashion. However, I’ve learned that by changing my perspective of what a true millionaire looks like with a definite savings plan in place, I may eventually become one myself.

Do you consider yourself a UAW or PAW?

Keeping up with the Joneses

I may be 15 years late, but I  just finished reading The Millionaire Next Door. It was inspiring and eye opening all at the same time. Some chapters I plunged into whole-heartedly, while others I quickly skimmed, such as, “You Aren’t What You Drive.” I really don’t car much for cars, but bookmarked it for my husband to read, the car afficienado! Some of the data is a bit old, but the ideas behind who the truly rich are and how they accumulated their wealth isn’t out dated at all.

I don’t mean to turn this post into a book review, so many people have read this book, but it inspired me to do some thinking about how our society has had the wool pulled over our eyes for so many decades. The opulence we see on television is an illusion of who we’re supposed to think the rich are, the ultimate advertising campaign that drives many people into purchasing items they can’t afford and really don’t need. This misconception, that rich people live in large mansions, drive Bentley’s, and wear $10,000 Rolex’s is what might be keeping the average Joe (there’s something about the J’s!) from ever reaching their financial goal or becoming millionaire’s themselves.  Constantly keeping an eye on the “Joneses” and following their lead may be detrimental to one’s financial health.

But who are the Joneses? Where did they come from? Why do we try to keep up with them?

The Joneses origins come from a comic strip around 1916 written by Arthur R. “Pop” Momand, apparently they were the main character’s (The McGinis Family) neighbors that were never seen in person (Wikipedia). Based on images I’ve researched, the main characters compared themselves with their neighbors with the intention of “out doing” the Joneses through consumer spending. The strip was meant as a parody, or mockery, of the main characters behavior. Who knew that the title of this comic strip would become so ingrained in the lives of Americans!

Nearly 100 years later, the phrase is still used to describe the conspicuous consumption of middle-class families. Of course envy, jealousy, and greed have existed since the dawn of humanity (that’s the anthropologist in me speaking!) We’ve just been able to create a catch-phrase to make is sound snappier and less gauche.

Finishing Millionaire I realized that the Joneses aren’t who we’ve been thought to believe they are. Which is quite ironic considering the Joneses in the comic strip were never seen, so who really knows who they were? Here is a breakdown of how I’m beginning to see the real “Joneses”:

• Deep in debt. In order to continue the illusion of wealth, they purchase items beyond their salary on credit.
• Low or negative net worth. I’ve finally figured out the net worth calculation thanks to the book; age times salary divided by 10 should be your net worth. Today’s Joneses are lucky to be in the positive.
• Living Pay Check to Pay Check. The idea that wealth is based on how much one owns is a fallacy. It’s really how much one’s saved. Unless you have access to their bank accounts, there’s no way to know based on outward appearances.
• Feeling insecure about the future. The Joneses are deep in debt. People up to their eyeballs in debt, spending much more than what they earn must feel very uncertain about what the future holds for them. A loss of income could be devastating.

As popular as Dr. Stanley and Dr. Danko’s book was, not enough people have been exposed to the ideas behind who the millionaires really are and this is deplorable. More education should be dedicated towards personal finance with the hopes of enlightening the masses. Perhaps a new comic strip should be created for today’s readers, entitled with the same mellifluous sound such as The Savvy, Spend-Thrift Smothers. It could be about the trials and tribulations of living frugally, reusing, recycling, and saving your pennies! Each week, the comic could total up the family’s retirement account showing how much the family has saved. It could inspire a whole new generation of conscious consumers.

For what I’ve learned is trying to maintain the illusion of wealth through spending is no way to live. So, forget the Joneses, we never knew them!