The Next City
August 5, 2004
The Millionaire Next Door:
The Surprising Secrets of America’s Wealthy
by Thomas J. Stanley and William D. Danko
(Longstreet Press, 1996. 258 pages) US$22
WHAT DOES IT TAKE TO SUCCEED in America these days? For starters, it helps to have parents who never made it rich. Over 80 per cent of millionaires receive no money from a trust fund or an estate, and their inheritance, if they got one at all, accounts in over 80 per cent of cases for 10 per cent or less of their wealth. Over half didn’t receive a penny in inheritance, and over 90 per cent believe they won’t receive an inheritance in future. Over 90 per cent didn’t get, as a gift, a penny of their family’s business.
But family stock does matter. If your ancestry or ethnic origin is from Russia or Scotland, chances are a whopping 1 in 5 that you’re in a millionaire household; Hungarian backgrounds aren’t far behind the scale of privilege, at 1 in 7. Americans of English origin, at 1 in 14, don’t fare poorly — they’re twice as likely to be millionaires as the general population — but their success generally had little to do with their origins on the Mayflower. The fortunes built up by rich Americans are typically dissipated by the second or third generation.
Not only do minorities do well, the smaller the minority, the better it tends to do. All of the 15 small-population ancestry groups that the authors surveyed have at least twice their share of millionaires given their percentage of U.S. households. Large ancestry groups contain smaller proportions of millionaires on average than smaller groups. The largest ancestry group in the United States — Germans, who form almost 20 per cent of the population — are underrepresented in the ranks of millionaires.
The longer that an ancestry group has been in America, the less likely it is to produce a disproportionately large number of millionaires. According to the authors, descendants of immigrants become increasingly socialized to the high-consumption American lifestyle and to working for others instead of themselves, leading to their financial decline. Nothing is likelier to lead to success than self-employment. Twelve per cent of Inc. magazine’s top 500 business entrepreneurs are first generation Americans. Their children, encumbered by success, will fare less well than they.
The Millionaire Next Door isn’t put out by a think tank engaged in the politically correct wars of this generation — its authors seem more interested in being millionaires themselves and showing others how to do it through a wholly uninspiring how-to book. But their book will undermine the arguments of those urging class war by painting a picture of the blue-collar millionaire. The phonies in this saga are high flyers who live beyond their means and often get caught — the stock promoters, gold-chained lawyers, and other wheeler-dealers who wear $5,000 watches, drive Porsches and live in the tony mansions in the ritziest part of town. The hero is the guy next door: He’s a paving contractor or the owner of a trailer park. He drives a used car and buys clothes from cut-rate clothiers. His wife either doesn’t work outside the home or is a teacher if she does. Unknown to his neighbors, this 57-year-old lump of a guy who has lived in the same house in the same middle-class district for 20 years, who’s been married to the same girl for most of his adult life, who has an undergraduate degree from a lowly local college and who orders a Bud and a club sandwich when he eats out, is the typical American millionaire.
WHILE SMARTS DON’T NECESSARILY LEAD to financial security, having the discipline to save does: What these average joes do best is put aside money — they average 15 per cent of their income — bringing millionairehood within the reach of almost any simple soul willing to forgo flashy cars. A 20-year-old waiter who sets aside $2,000 and each year increases the previous year’s amount by $200, investing it all at an unremarkable six per cent, will be worth a million dollars by age 65.
How many of us would never pay $100 for a pair of shoes, at least once in our lifetime? Twenty-five per cent of millionaires, it turns out, have never spent that much. Ten per cent of millionaires have never even spent $50 on a wrist watch, and another 15 per cent have splurged for one with a price tag between $47 and $100. Ten per cent of millionaires spent less than $13,500 for their last car; your average millionaire spent under $25,000.
Put another way, many if not most middle-class people live better than most millionaires. Being a millionaire is a lifestyle choice that’s well within our reach, but that most of us reject. We claim “life’s too short” to pass up pleasure today for security tomorrow. We rationalize that “you can’t take it with you” to explain why we indulge ourselves with a sleek car, or a trendy vacation, or a big tip to impress a date.
THAT FORTUNES ARE EARNED and not inherited has always been so in American society. In 1892, the U.S. boasted 4,047 millionaires, and, of these, 84 per cent were nouveau riche, having reached the top without the benefit of inherited wealth. A major study completed last year by economists for the Dallas Federal Reserve Bank shows that American society continues to churn out rags-to-riches stories.
Using data of some 50,000 Americans compiled by the University of Michigan, the economists tracked people who, in 1975, inhabited the bottom rungs — the lowest fifth of American society as measured by income. By 1991, most had made it to the middle class and 29 per cent had made it to the very highest quintile. Only five per cent of those poor in 1975 stayed poor.
The moral of this story, in the end, isn’t all that new. The Millionaire Next Door is but a sequel, with numbers, to Aesop’s The Ant and The Grasshopper. Dress the ant in a polyester suit and the grasshopper in pinstripes, and you’ve recreated Aesop’s for the 1990s. Only today much of society sides with the grasshopper when the lean times come and his storehouse is empty.
Slouching Towards Gomorrah: Modern Liberalism and American Decline
by Robert H. Bork
(ReganBooks, 1996. 382 pages) $35.50
SLOUCHING TOWARDS GOMORRAH by Robert Bork is not a pleasant read. Bork has a pompous, braying tone, and his prose is too ornate. The merits of his ideas and argument do not, on the whole, compensate for these failings. Bork’s ideas for saving society from itself are familiar conservative prescriptions. Reading Bork feels the same as reading gender feminist tracts; the author’s bias makes every paragraph an insidious trick.
Bork’s target is “modern liberalism,” the dissolute but inevitable offspring of classical liberalism. While reiterating telling criticisms of the left such as increased bureaucracy, excesses of political correctness and divisive features of multiculturalism, Slouching Towards Gomorrah is deficient in four respects.
First, there are inconsistencies of reasoning. Bork wants to save America, but he also says its problems were built-in at its inception, making it difficult to see what America he wants to save. Moreover, he claims that “modern liberal” cultural and intellectual elites suppress a great conservative populism, but nevertheless he dismisses society as generally and pervasively decadent.
Second, Bork denounces long lists of perceived social ills including animal rights, homosexuality, vulgar entertainment and erotic expression, without bothering to explain why they are bad. Maybe they are, but if so, Bork should justify his assertions. An amusing passage occurs when Bork, inveighing against “obscenity,” describes encountering sexually explicit material on television in a New York hotel: “I watched for some time — riveted by the sociological significance of it all.”
Third, Bork makes numerous unsupported assertions, such as: When “Nixon came to office, the opportunity to win [the Vietnam War] was gone,” and “Fascism and Nazism were faith systems of the Left.” He offers bizarre characterizations such as: First World War soldiers were “capable of admiring courage,” while Second World War soldiers were not. Neither does he hesitate to offer begged questions, “Is abortion always the killing of a human being? . . . there can be no doubt that the answer is yes,” twists of logic, “Why there is a right for adults to enjoy pornography remains unexplained and unexplainable,” and gratuitous slurs, “Some professors were radicals themselves, a few were emotionally unstable.”
Fourth and most disappointingly, Bork fails to refute any of the left’s sometimes persuasive criticisms against the traditional society he espouses. While he laments the diminished importance of religion, for example, those failings of religion that left it susceptible to marginalization go unaddressed. Thus, when Bork prescribes a return to “the better aspects of the 1950s,” he gives the reader no reason to believe that all the worst aspects won’t come along as well. Bork suggests that society discarded valuable institutions on pure whim. He makes no counterargument to the possibility that some were flawed and proper candidates for reform.
These four failings typify the lack of reasoned discourse society labors under. While Bork is quick (and accurate) in puncturing leftist obfuscation, he employs the same tactics in blaming the left for problems that are clearly related to polarization, rather than to one of the poles. He has chosen rhetoric over proof, and so Slouching Towards Gomorrah does not stand up as a useful contribution to social thought.
Nils R. Connor
Zero Tolerance: Hot Button Politics in Canada’s Universities
by Peter C. Emberley
(Penguin Books, 1996. 313 pages) $19.99
THE RIPPLES OF the “Framework Regarding Prevention of Harassment and Discrimination in Ontario Universities,” issued in 1993 by the Ontario NDP government, are felt well beyond Ontario and perhaps even beyond Canada. This document, immediately nicknamed Zero Tolerance Policy, is Ontario’s best contribution to social engineering. For Peter Emberley, Professor of Political Science at Carleton University in Ottawa, zero tolerance is only one of many phantoms haunting the university. They include the corporate right of the privileged Old Boys network and the cultural and feminist left; the demands of “all-inclusivity,” accessibility and financial self-sufficiency; the hyperbolized notions of excellence, performance indicators and total quality management — and this is only the short list. Emberley concludes that the university as a social institution is on the verge of spiritual, political and financial collapse and recommends a return to scholarship to salvage the university from complete demise.
Alexander A. Berezin
Canada from Afar: The Daily Telegraph Book of Canadian Obituaries
Edited by David Twiston Davies
(Dundurn Press, 1996. 270 pages) $16.99
CANADA FROM AFAR: THE DAILY TELEGRAPH BOOK OF CANADIAN OBITUARIES reminds Canadians of our ties to Britain, the mother country. As Conrad Black, publisher of the Daily Telegraph, writes in this odd book’s foreword, “this volume will make a modest contribution to the valued and historic cause of close and good Anglo-Canadian relations.” Black’s Anglo patrician background suggests a natural bond with the United Kingdom. Of 100 obits, this London paper manages approximately 12 on non-Anglos. The obituaries are more biographical sketches than mere announcements and cover a broad spectrum, from political figures like Roland Michener, Joey Smallwood and René Lévesque to Victoria Cross winners such as Charlie Rutherford, Reverend John Foote and Colonel Fred Tilston.