[Goronmon]

Well, "Millionaire Next Door" uses examples of millionaires to provide some form of guidance (at least on some level) to non-millionaires on what it takes to actually become wealthy.

Though, I haven't read it, I would assume that "Fooled by Randomness" would explain the wealth of the individuals from "Millionare" as more to do with luck than anything else, and that it's not repeatable. And that fulfilling the "American Dream" has more to do with being lucky than with hard work.

[marknutter]

Wow. No, I'm sorry, but TMND explains very clearly, backed by solid statistics, how people become rich, and it doesn't have anything to do with luck. In fact, the process of becoming a millionnaire is quite boring and unglamorous; invest prudently, cut expenses, don't buy new cars, have a modest mortgage, etc. Very few of the millionnaires interviewed in the book "got rich quick". The vast majority of millionnaires in the U.S. got there over a long period of time of living well below their means; long enough for luck to be completely factored out.

[thecage411]

It's been awhile since I read Fooled by Randomness but I think Taleb's point was that TMND only looks at those who became rich, it doesn't look at those who didn't get rich following the same strategy.

I haven't read TMND so I can't say if that's true, but your post doesn't refute his point.

[marknutter]

I see what you're getting at, but the key point to understand is that the authors of TMND were able to find a pattern among the millionnaires they interviewed. If these successes were primarily based on chance you wouldn't be able to discern a pattern of behavior because the paths they took to becoming millionaire would be wildly different. They weren't, though. There's the old saying "luck favors the prepared". These folks all probably had their ups and downs in life, but because of their frugality and fiscal responsibility they were able to smooth out the valleys and maximize the hills.

[masomenos]

This is the line of reasoning Taleb criticizes. I haven't digested his criticism fully enough to fairly summarize it, but I think it's worth a look.