Stop Acting Rich . . . and Start Living Like a Real Millionaire."

I've read a couple of reviews of this book and it looks like a winner.

By Liz Pulliam Weston
The neighborhood you choose can have a powerful impact on how rich you become and how wealthy your children will be.


The richest neighborhoods in the US
But the link between where you live and how much you're worth may be different than you expect.

So says wealth myth buster Thomas J. Stanley in his new book, "Stop Acting Rich . . . and Start Living Like a Real Millionaire." Stanley is on a mission to change how Americans view money, starting with the blockbuster he co-authored in 1996, "The Millionaire Next Door."

Too many Americans are what Stanley calls "aspirational spenders" -- people who spend money to make themselves look richer or more successful than they are.

But their "hyperconsumption" effectively torpedoes any chances they would have at accumulating real wealth, which typically requires spending significantly less than you earn and investing the difference.

In his latest survey of millionaire and nonmillionaire households, Stanley ranked more than 200,000 U.S. neighborhoods for wealth, then followed up by surveying select households, more than half of which were millionaires, which Stanley defines as having $1 million in investments, excluding their homes.

Here's what Stanley found:

The neighborhood in which we live influences a lot of our spending. The more expensive the house, the bigger the mortgage tends to be, and the more we'll spend on heating, cooling, insuring and maintaining the place.

But we also feel pressure to match our neighbors' spending on cars, vacations, furnishings and other trappings.

The "keeping up with the Joneses" mentality means the fancier the neighborhood, the less wealth we may accumulate, Stanley said. The opposite is also true: When our surroundings are more modest, we tend to spend less, regardless of our incomes.

"The propensity to spend," Stanley said, "is directly related to the typical home price in that neighborhood and to the price you paid for the house."

Interestingly, most of the people Stanley surveyed who lived in $1 million-plus homes weren't millionaires.

"They may have a big mortgage," Stanley said. "They don't have a lot of money."

In fact, Stanley found that three times as many millionaires live in homes worth $300,000 or less than live in homes worth $1 million or more.

"People who have a tendency to accumulate wealth live in neighborhoods that are easy to live in," Stanley said. "That's a hallmark of an accumulator."

Whom you hang out with matters. The ideal neighborhood, Stanley said, would be populated with engineers and teachers, two professions he found were associated with higher-than-expected levels of wealth accumulation.

Educators were especially good at turning sometimes below-average incomes into above-average wealth, something Stanley -- a university professor for 20 years -- credited to the culture in which they work. Frugality and saving for the future are valued in many teaching settings, he said, and that culture can have a profound effect.

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

Our neighborhoods influence our kids' future wealth accumulation, too. Stanley asked his survey respondents a simple question: Growing up, were they better off or worse off financially than most of their neighbors?

People who perceived their childhood family's income as below the average for their neighborhood tended to become aspirational spenders and below-average wealth accumulators, Stanley said. They spent more to compensate for childhood feelings of somehow being "less than" their neighbors.

"They said things like, 'I went to high school with kids who had a lot more money,'" Stanley said. "They're making up for that scar."

By contrast, those who felt their families were in the upper half of their neighborhood's wealth hierarchy were more likely to be accumulators, rather than spenders.

"They're not looking for ways to consume to make up for the past," Stanley said.

Most millionaires have just one house. Many people associate a second or vacation home with having arrived. In Stanley's surveys, though, 64% of millionaires had never owned a second home. The net worth of second-home buyers at the height of the real-estate boom was actually considerably lower: a median of about $380,000, Stanley estimated.

Houses cost a lot to run and maintain. Stanley postulates that money-savvy millionaires find one home to be enough and prefer not to pour money into a property they may not use often -- or might feel pressured to use more often than they want to.

A mere recession won't change Americans' spending habits. Actually, this wasn't a survey finding but is Stanley's own assessment of the long-term impact of the Great Recession on our likelihood of accumulating wealth.

Yes, people have cut back their spending because of job losses, less access to credit and the desire to build up savings, Stanley said. But that cutback is likely to be reversed as the economy improves, he said.


The richest neighborhoods in the US
"It's not going to change the fabric of people," Stanley said. "Our whole (economic) structure is based on hyperconsumption."

Liz Pulliam Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "Your Credit Score: Your Money & What's at Stake." Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board and helps middle-class families cope at Building a Brighter Future.

One of the teachers I knew in our last town probably was the "richest" in terms of savings and plans for the future. Her husband had a good job as well, but wasn't extremely well-paid. However, they lived modestly and other than having several children in college, there wasn't an obvious sign of wealth. Dh and I both admired them.