From The Millionaire Next Door: Concept of PAW, AAW, & UAW



I have been reading this book written by Thomas J Stanley & William D. Danko.
It is more of a research that the two did in their search who are the real millionaires in the United States. To their surprise, the real millionaires are not the people that you see in TV and news announcing the value of their newly bought house in the Hamptons or their latest  fashion style care of this and that designer. The true millionaires are the ordinary people who has mastered some of the secret of wealth accumulation. I have already mentioned about this topic in a previous post but I would like to expound on the three acronyms.


UAW or Under Accumulator of Wealth are persons who doesn’t know how to manage their finances. You can find a big rock star, a well known doctor, a very good sales person earning a lot of commissions but they still fall under this category for the fact that they don’t know how to make their money work for them in spite of their earning capacities. In layman’s term these are the Spenders. They may have great sources of income but most of those earnings are slipping away from their hands because  they never knew how to make their money work for them….in other words they work hard to spend money and in the end they are broke.
AAW or Average Accumulator of Wealth. These are the normal people. They have regular jobs or they are famous celebrity or a famous neighborhood shop owner. They do there daily routines and that is all. They are able to meet their needs and only sometimes they struggle to fund some of their financial needs. In other words they just have enough for whatever they need. They are actually savers. So in case emergencies comes, their capabilities are only to what they have saved. Savers are good people but not as lucky as the PAW. These group should be able to rise above so that they can well manage their finances and make money work for them.


PAW or Prodigious Accumulator of Wealth are the wise people who knew how to save and how to invest. They don’t mind having a second hand car as long as it serves its purpose and it never break their wallets because they rather wanted their money to work for them. They invest in business, stocks, and other sources of income while still having a regular job. They only spend when necessary and always take advantage of the right bargain. They always weigh options first before buying and if it is possible to delay and wait for a better price they can always wait. The secret is knowing how to invest what you have save.
About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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