When I was a teen, my dad gave me “The Millionaire Next Door,” kickstarting my fascination with saving, investing, and the markets. Back then, being a millionaire had even more cache than today – thanks a lot, inflation. Since I was young, my dad hammered home the value of financial independence and this book felt like the ultimate guide. Only it didn’t reveal the Lifestyles of the Rich and Famous you might expect. In studying the habits of more than 500 millionaires, the book’s research uncovered something far different. Here are four of the most valuable takeaways:

Rich vs. Wealthy

People often interchange “rich” and “wealthy.” It’s a big mistake when you consider many people are rich but not wealthy. And conversely, many are wealthy but not rich. According to the author Thomas Stanley, being “rich” means earning a lot, while being “wealthy” means accumulating a lot. It’s not just about what you make but what you keep.

Spotting a Millionaire

Millionaires aren’t always easy to spot. Two key contributors that Stanley found in millionaires was a propensity to live below their means and be diligent savers. In other words, millionaires were like human chameleons blending in with others who earned less and spent more than they did. These millionaires were hiding in plain sight, one might even say — next door.

Monkey See, Monkey Do 

My kids are a great reminder that we model what we see much more than what we hear. Turns out, people are great at learning by imitation. So it’s easy to see why people would be exceptional at being rich (or acting wealthy) but not actually being wealthy. The only way to be wealthy is not to spend the money that you have. How can you learn from actions and behaviors that you literally can’t see?

Wealth is Stealth 

How many basketball players have said they modeled their game after Michael Jordan or Kobe Bryant? How many authors could tell you the great authors that inspired them? To become wealthy, who would be your role model? Where would you see spending less and saving more? This is why becoming wealthy is so hard — it’s easy to watch hours of Jordan or Bryant on YouTube and observe the nuance that made them great. Building wealth is a different story because it’s invisible.

How to Become the Millionaire Next Door

The older I get, the more I’m drawn to people who are experts in their field who have been very successful though it’s not wildly apparent. They don’t drive flashy cars or tout their brilliance. Rather, it’s almost like a riddle that you have to solve. I like to say these types of people “walk quietly but carry a big stick.” Think Mr. Miyagi, the wise karate master from “Karate Kid.”

The parallels are fitting when considering the difference between rich and wealthy. Many rich individuals walk loudly but yield a surprisingly small stick. Meanwhile, those who are truly wealthy often look much more like Mr. Miyagi, hiding their tremendous financial might in plain sight. So how do you become the millionaire next door? In the book’s research, many millionaires:

• Don’t live in extravagant neighborhoods or drive flashy cars
• Prioritize living below their means – think used cars and quality clothes over brand names
• Invest significant time and money budgeting and planning to achieve financial independence
• Don’t offer financial assistance to their adult children – it’s these children that tend to accumulate more wealth as they learn self-reliance and financial discipline
• Do help their children by funding education or supporting business ventures

In essence, it’s the everyday, unglamorous actions that can make all the difference between being rich vs. wealthy. It’s about walking quietly but wielding a significant financial stick, just like Mr. Miyagi.

Castle Quote: “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” — Albert Einstein