Book Review: Millionaire By Thirty

by Ron Haynes

Millionaire by Thirty: The Quickest Path to Early Financial Independence was written by Douglas R. Andrew and his two sons, Emron and Aaron.

The book takes a different approach than many financial authors in that it doesn’t advocate cutting up your credit cards, paying off all your debt, or discouraging you from drinking a latte every day for forty years. Apparently this is a slam against Dave Ramsey and David Bach, both of whom are recognized as knowing a thing or two about personal finance! But many people arrive at wealth from different directions and this book certainly advocates an approach that many in the personal finance community will find uncomfortable, especially in the current credit and real estate climate.

The book uses a lot of anecdotal evidence, story-telling, and reminders that Emron and Aaron, ages 26 and 27, are millionaires because of information used in the book. Peppered throughout are conversations that the sons have had with classmates and friends, none of whom seemed to have a clue about how their money works. Supposedly, the boys were able, in only four years, with incomes of only $30,000 each, to amass personal net worths in excess of $1 million each and assets in excess of $1.5 million. They also claim to have passive income streams of $3,500 per month and portfolio incomes of $1,000 per month.


The book is divided into ten chapters:

Chapter 1 Wake up and step out of the financial darkness
In other words, be open to some different approaches to wealth.

Chapter 2 Mapping your future
Mostly Chapter 2 was a big pep rally, working to convince the twenty-somethings that they are in a great position to make something of themselves. I agree.

Chapter 3 The millionaire mindset
This was the chapter of the three point list. Nothing new here! With money, you can either spend it, lend it, own with it.

Chapter 4 Pay yourself first
This chapter had some potential because the premise is sound, but it’s sample budgets were completely unrealistic. On a $3,500 per month income, only $450 to pay all state tax, Federal tax, local tax, Social Security, Medicare? Um, no. Just the Social Security and Medicare would be over $250, leaving only $200 to pay state and Federal taxes.

Chapter 5 Don’t give Uncle Sam gifts
Don’t allow the government to withhold too much money in taxes during the year, itemize your taxes aggressively, and invest only in tax free or tax deferred retirement plans.

Chapter 6 From renter to homeowner in one leap
Borrow, borrow, borrow from anyone you can find so you can get into your first home. Borrow the down payment from the seller, parents, friends, relatives, or anyone you can and then get an interest only mortgage.

Chapter 7 Real estate equals real wealth
Refinance your home as often as possible to “pull put” equity for investment into more real estate. Acquire as many properties as possible with this method and continually refinance to gain access to those equity dollars.

Chapter 8 Think smart now, retire smart later
Your IRA and 401(k) may not be the best investment vehicles to save for retirement. Investments should pass the “LASER” test, liquid, safety, and rate of return. Only one investment meets all these: maximum funded, tax advantaged life insurance contracts.

Chapter 9 Insure your future financial well being
This chapter went into detail on the advantages of those maximum funded, tax advantaged life insurance contracts.

Chapter 10 Touch all the bases
Wealth is more than money so spend time with your family. Seek clarity, balance, and focus in your life. Abundance creates more abundance.

What I liked

The book starts on solid footing by suggesting that recent college graduates should not be in a hurry to pay off their student loans, because the rates are usually low and the interest deductible. Okay, that makes sense. The authors also recommend buying a home, instead of renting, because mortgage interest is deductible and houses usually appreciate. Usually, but not always. I would personally advocate buying a home, but in a far different way.

What I didn’t like

The authors seem to forget that when a home is refinanced over and over, there are significant fees as well as the possibility of the home losing value and the mortgagee being “upside down” in a home, owing more than the home is worth, sometimes much more. I’m sure you can still find the interest only mortgages the authors advocate, but at what transaction costs? The examples used in the book mention no transaction costs, like fees for continuously refinancing, or points on mortgages.

Arguing that real estate is a great way to become a millionaire reeks of late night infomercials. They advocate buying numerous properties, arguing that real estate is safer than stocks. Try telling that to the huge number of people facing foreclosure. Safer? The current housing and credit crisis has taught many people that real estate isn’t entirely safe.

Let’s just say you borrow $15,000 of $30,000 to use as a down payment to buy a $300,000 home. If it appreciates 10 percent in one year — don’t laugh, the book uses this growth percentage number quite a bit — then, in theory, you have made 200 percent on your money (except that you still have to pay back that other $15,000). But as the theory goes, you put down only $30,000 (10 percent of $300,000), and the house, on paper at least, is now worth $30,000 more than you paid.

The National Association of Realtors says on its Web site (see page 23 of the pdf file) that typically “home values rise at the general rate of inflation plus 1.7 percentage points.” Now, since 1926 inflation has averaged about 3 percent/year. If we use the Realtor’s numbers, the average house price has risen only about 5 percent a year, and that ignores the current real estate downturn! By comparison, stocks over that time have returned 10.4 percent, annualized, and bonds 5.5 percent.

They also assume that people can easily find an interest free mortgage with only 10 percent down. Assuming you were able to find this mortgage opportunity, the authors advise you to take that $30,000 out of the house, by refinancing, and use the profits to buy another house or to fund another investment.


If this book had come out in 2006, a lot of this would have seemed to have made sense, but because the economic, credit, and real estate climate has changed so much, these ideas seem risky and wrong.

Timeless advice is timeless for a reason.

It doesn’t change under different market conditions and doesn’t rely on timing the market, any market, even the real estate market.

1. Spend less than you earn.
2. Avoid high interest debt on non-appreciating assets (sometimes this includes real estate).
3. Set aside money for emergencies.
4. Invest for the long term in reliable, trusted, understood investment vehicles using tax advantaged accounts where possible.
5. Avoid being a “borrower.” The truly wealthy don’t have to lie awake at night wondering if they will have to pay off everything because a loan is called.

I’ll be the first to admit that I don’t know everything and that there are many roads to wealth. In some markets, the advice in this book will work, but it isn’t the best of advice in my opinion. But, if you would like the opportunity to win a FREE COPY, simply leave a comment on this post. I’ll draw a name to win my advance copy on Friday evening, May 30th!

[tags]millionaire by thirty, money, personal finance, real estate, housing crisis, book, credit, debt, house, interest, review[/tags]

About the author

Ron Haynes has written 1001 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.

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I agree that the real estate advice sounds a bit on the optimistic/simplistic side. That said, gearing into a property during at down turn (especially a distressed sale) is a sound way to build wealth – so long as you can keep up the payments until the market moves in your favour. While I understand the interest only mortgages are ideal from a cash flow perspective, I prefer long term P+I to build some equity. Depending on which market you are in, you can usually get longer terms (removing roll over risk) and lower interest costs on P+I than interest only.

A couple of comments on the real estate numbers. The NAR number for appreciation is potentially misleading in at least two respects. Average house sezes have also increased and the fittings component of the typical house has also increased/improved over the last 40+ years. It makes price comparisons somewhat difficult. It also goes without saying that a national average in a country as large and diverse as the US is close to being meaningless.

Lastly, for the comparison of returns between real estate and equities, I think you may be comparing capital appreciation only (i.e. not including rent earned if an investment property or rent saved if an oweber occupied property). The number quoted for stocks includes both captial gains and dividends. That said, the return for stocks should still come out a bit higher.

As a general statement, any book that advocates life insurance as a form of investment is likely to be largely rubbish. Life insurance investment policies are inevitably very expensive, illiquid and offer low rates of return. Tax advantages (if any) will not come close to compensating for the costs.




I don’t disagree with buying anything when it’s on sale. And real estate is certainly on sale right now. Where I thought the book went wrong was in using the interest only mortgages. With those you can only hope for capital appreciation.

On the NAR numbers, you’re right, the average is a poor number to use and the US real estate market is very large and diverse, but the book was written to the whole US population. “Average” isn’t the best of statistical methods (though it is the simplest), but I think people understand it better than regression analysis or other statistical methods. For that matter, I’ve found that a lot of people don’t even understand “median.”

Like I said in the post, if this book had been published 3 years ago, it would have gotten better reviews. Most of the reviews I’ve found on the web haven’t been too flattering, but when housing prices have declined by up to 20% in the last year, what would you expect from a book that advocated using the methods and techniques that have contributed to our current housing and credit crisis? ;)

Great comments. Keep ‘em coming!


5. Avoid being a “borrower.” The truly wealthy don’t have to lie awake at night wondering if they will have to pay off everything because a loan is called.

When times are good, the opposite is true. Speculators are on a borrowing binge, that is called leverage, they have the money but preferred to use loans to achieve higher rates of return.



Maybe so, but I’ve been on the receiving end of having a $2.6 million dollar loan called because a loan officer and his boss were nervous about the economy.

I never want to go through that again. Leverage cuts both ways and when the 900 lb gorilla on the other end has his boss sit with him on that end of the see-saw, you will lose. At that point, you become desperate and cannot flip your debt to another lender. They will wonder what’s wrong and make a few phone calls. You’re just plain out of luck at that point.

I’ll have to write a post about it sometime.


Absolutely ridiculous advice. I’m tempted to enter the giveaway and throw away the book if I win. (I know, I know…I won’t. :)

Look. I am these guys’ age (26) and I also have a high 6-figure net worth. But I RENT. Why? Because it costs twice as much here in CA to own a property as it does to rent one! For investment purposes, you shouldn’t own property that’s valued at more than 100-120x rent. Yet I didn’t see any of these metrics mentioned in your review of the book — and I doubt they’re there — making this book ridiculous cheerleading instead of actual sound advice.

Getting an interest-only loan and hoping that properties will appreciate 10% per year is a sure sign of a bad investment. I wouldn’t even take out a loan to invest in the stock market — even though it has appreciated 9.2% per year over the last 30 years. These guys are really going to have egg on their face in a few years when we’re in the downturn of this 16-year real estate cycle. In the meantime, I’ll use actual metrics like 100x rent to go in and buy investment properties that cash flow properly. In the meantime, I have my money in solid investments and mutual funds — and I’m starting another business.



I just read through this book, I’ve now read 10 “millionaire” books and I am (25 yrs) making less than $50K, I have no savings, and I live at home (after living in a rental that was foreclosed upon!)…I’m willing to try anything but every time I read one of these books I seem to make the authors “millionaires” and myself just $30 poorer. I’ve gotten a few ideas from this book, but common, a lot of this stuff I knew already thanks to “rich dad, poor dad”. Is there a book that exists that shows “real people” how to make “real money” at this point I think I’m giving up on the “millionaire” quest and just looking to be able to provide for myself and my future family… :?:


Although I am passed my 30′s I picked this book up at the bookstore and read through it. I found some of the advice to be good common sense, but I have to agree that I found the illustrations and ‘case studies’ simplistic and unrealistic in the use of the 7 and 10% returns on real estate. Sure it happens, but historically, not close in many markets. Thanks to the bursting bubble, I don’t see a return like that anytime soon. Completely missing from any of the content was cost of ownership of multiple properties. The use of leveraging your primary residence to finance the purchase of rental properties is not new and is sold by every get rich quick in real estate infomercial out there (including the “rich dad poor dad guy” – who reminds me of the late Charles Givens – anyone remember him?).
I’ll stick with slow and steady accumulation through investing in tax advantaged accounts, paying off my mortgage and living below my means. One thing I will agree with is to buy as much life insurance as you can afford as early as you can – TERM – it’s cheap and you can invest the difference you would have paid in premium for a whole life policy.

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