Book review: Stop Acting Rich





I’ve been a Dr. Stanley fan since “The Millionaire Next Door” in 1996  . He’s made an entire career out of studying the lifestyles and buying habits of the rich and the not-so-rich. Thanks to his research, my family has been able to figure out what’s important in our lives and what’s worth the money. Thanks also to his research we’ve become nearly immune to the miracles of modern consumer marketing.

“Millionaire Mind”  has also been a big help with raising our daughter. We couldn’t just dump the books on her pillow with a “Read these!” note, but we could talk about some of his stories and compare them to her “earning”, “shopping”, and “owning” experiences. It even helped her decide what classes she wanted to take in high school and what she wanted to study in college. And of course “Millionaire Women Next Door”  taught her how to dream big.

“Stop Acting Rich”  has been out for a couple of years, and its latest edition is repeating the same best-seller trajectory followed by his other books. It’s not as startlingly novel as TMND, but it’s the same voyeuristic pleasure (and even schadenfreude) of learning how to be (and not to be) rich.

Stanley divides his subjects into four categories: the “glittering rich”, the “balance sheet affluent”, the “income affluent”, and the “aspiring rich”. The glitterati are over $20M and so rich that they don’t even bother to budget. They can spend as if they’re truly rich, because they are! Some of them became that way through inherited wealth, but the majority of Stanley’s subjects did it the old-fashioned way: through earning a high salary (and saving it) or by growing their entrepreneurial businesses. Now that they’ve arrived, they can spend their income as they please. Note that the spending didn’t start until after they’d arrived.

“Glittering rich” is a critical difference from the other three categories, because these people will probably not be able to spend it before they die. (Notwithstanding a few celebrity examples to the contrary.) Even if they’re no longer working full time, the vast majority are still growing their businesses. They’re not worried about their annual six-figure spending because they’re earning seven or even eight figures each year. For them, wealth is more a means of keeping score than a threshold of financial independence.

The “balance sheet affluent” are Stanley’s true millionaires next door. They’re typically business owners, although a few of them were high-income earners who managed to continue a frugal lifestyle. These are the people you’d never expect to discover are worth seven figures. They drive older mid-size cars (or pickup trucks), buy suits on sale, drink cheaper brands of beer & alcohol, and don’t wear status badges. Their spouses are exceptionally frugal because that’s how they started out in their marriage, and they continued those habits even as their wealth accumulated.

The “income affluent” and the “aspiring rich” tend to be lumped together when Stanley’s describing their behavior. The former are earning plenty of money and spending nearly all in pursuit of lifestyle upgrades. If they lose their job or take on too much debt then they’re immediately in financial jeopardy. The aspiring rich are in trouble from the start: they’re not earning very much and either have a negligible net worth or are heavily in debt to the lifestyle that they feel obligated to be living. Although they’re every bit as discerning in their expensive tastes as their glitterati counterparts, they haven’t earned the fortune (or built their own business) to support their spending.

These last two categories are the focus of “Stop Acting Rich”. Stanley points out that they’re merely acting rich in the image that the media has created for us. Luxury marketers and high-end retailers want them to drive the rich cars, wear the rich clothes, and drink the rich beverages. The world’s advertising and marketing campaigns are very good at selling this image– but it’s not the way that real millionaires live.

Stanley debunks each aspect of this carefully crafted image. His surveys and his research compare the public perception of millionaire shoes, watches, cars, wine, liquor, and other accessories to the actual brands favored by the real millionaires. His best chapter describes “premium vodka”. Americans can choose among nearly 300 brands, and most of the vodka distributors don’t even distill their own– they buy thousands of gallons of alcohol in railroad tank cars or tanker trucks from agricultural producers like Archer-Daniels-Midland. A little extra flavoring, a special bottle, a few million dollars of image grooming, and voilà: a premium vodka is born.

If you’re an oenophile (or if you think you are) then you should just skip Stanley’s wine research. He repeatedly makes the point that conspicuous symbols of wealth (homes, cars, clothing, beverages) are better indicators of the owner’s credit-card use than the size of their investment portfolio.

So how do you start living like a real millionaire? First, live below your means. Don’t aspire to be rich by chasing the costly symbols that the marketers would have you believe are “used by rich people”. Read Stanley’s survey data to learn what lifestyles and brands are truly valued by the rich, and choose the aspects that suit your values. If you’re living the lifestyle of the aspiring rich, then perhaps it’s time to change your values before your money runs out.

Next, save your income and invest it for financial independence. If you’re “income affluent” then it’ll happen faster, but your goal is to become “balance sheet affluent”. (Note: Land is an asset. The house built on it is a rapidly depreciating asset, and its taxes & maintenance costs are a liability.) Don’t feel obligated to compete with the rest of society in displaying the trappings of wealth. Instead try to have your values reflected in your assets, not your income or your spending or your liabilities.

Finally, if you still must spend, then don’t start spending like the glittering rich until you actually are glittering rich. Too many “aspiring rich” and “income affluent” are spending their income with the assumption that their possessions (or their looks) will help them make it to the big time. The reality is that most millionaires plowed their income and their hard work back into growing their businesses until they could live off the profits.

If you’ve been reading Dr. Stanley since TMND then you’ll enjoy a pleasant stroll down the familiar paths of his research. If you’re new to the genre, however, you’ll have your eyes opened to amazing new vistas of how to behave like a real millionaire.

This book will be on our daughter’s reading pile soon!

You’ll find more advice at Dr. Stanley’s blog.

Related articles:
Book report: Dilemmas of Family Wealth
Book Review: “Get Rich Click!”
Book review: Eric Tyson’s “Personal Finance in Your 20s For Dummies”
Book review: The Complete Idiot’s Guide to Social Security and Medicare
Book Review: Liz Weston’s “The 10 Commandments of Money”

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About Doug Nordman

Author of "The Military Guide to Financial Independence and Retirement" and co-author of "Raising Your Money-Savvy Family For Next Generation Financial Independence."
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4 Responses to Book review: Stop Acting Rich

  1. Arthur Herold says:

    Thanks for the review. I need to make a note to have my teenager read your blog tonight and I need to look on Amazon to find that book for him to read. That is what I have been preaching to him, but, coming from someone who is not a parent might hold more weight!
    Thanks again!

    • Doug Nordman says:

      Thanks, Arthur!

      Yeah, the “preaching” approach wasn’t workin’ so well for us, either…the “living like a poor college student” approach, though, seems to be working great.

  2. Doug Nordman says:


    I used to get teased about my car or about commuting by bicycle until I pointed out that they reflected my values, not my assets.

    We tell our daughter that we hope she finds an avocation that she loves, but that financial independence gives her the choice to do what she loves…

  3. m.s.russo says:

    It’s good to get this reminder with the heavy advertising and constant, constant press of marketing. I work with the lower ses african-american community and this bit of education might be helpful for them – there is much to the look like I’m rich philosophy that goes on there. I get harrasses about wearing the “same clothes” everyday – loved my uniform – economic in terms of time and money. Also like the way you slipped in “helped my daughter” so parents could use that excuse to think this over.

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