The book is simple to read, to understand, and to apply.
For the most part these people do not own their own businesses and do not work for Internet start-ups. Rather they average 57 in age, $120,000 in annual income, have $500,000 in savings, and own a home worth $256,000 with a mortgage of $142,000.
These people carry a long-term home mortgage, even though they could pay off their mortgage. The benefits are that they are more liquid financialy should job-related adversity strike, get more tax deductions, and have more funds to invest.
They invest their retirement accounts into a diversified set of stocks. That asset allocation decision gives them the ability to compound money rapidly over time. They make frequent, small investments (usually through monthly savings) that give them the benefit of dollar cost averaging -- which gives you more stock when the prices are lower. They rarely trade.
They have helpful mental habits, too. They focus on a goal of how fast they want their money to accumulate, rather than comparing their results to market indices. This allows them to avoid taking on risks or getting emotionally confused. Further, they spend little time thinking about their investments. They track costs to trim them, rather than doing elaborate budgeting. Many use Quicken to help them.
There are several other valuable sections. One is on how to avoid making mistakes, which identifies stalls that can cause losses from harmful emotional states like fear, greed, overconfidence, lack of confidence, regret, loss aversion, and fixation. I especially liked the section on the biggest mistakes that people had made in their lives (not starting investments soon enough, making a bad investment, getting bad financial or tax advice, and taking on too much credit card debt). There is also good material on what people did right.
The book's main weakness is that it does not give any advice on how to create greater wealth through entrepreneurial activities. Most of the wealthy people I know are entrepreneurs, not people who saved money while earning normal incomes working for someone else. With a slightly different methodology, Mr. Edelman could have helped his readers with that information, as well. I graded the book down one star for missing this important area. See Rich Dad, Poor Dad and Cash Flow Quadrant if you doubt the importance of this point.
After you finish reading this book, ask yourself how the future will probably be different from the past so that you should adjust what you do to create a more favorable risk-reward ratio. Copying what worked well in the past is seldom a perfect recipe for future prosperity.
Ordinary People, Extraordinary WEATH can be summed with the following points:
1) Carry a mortgage on your house, even if you can afford to pay it off.
2) Don't diversify among different asset classes, the money you throw into a 401k
3) Invest whatever you can, lots of little investments add up to a lot.
4) Buy and Hold
5) Ignore the Dow, S&P, NASDAQ
6) You don't need to spend lots of time analyzing your money
7) Talk with, and educate the family about money.
8) Tune out the fodder the analysts are constantly spewing.
Generally speaking, good principles to follow. If you want to read explanations for each of these, then read the book. Half of the 300+ pages of this book is "In Their Own Words" consisting of clients reinforcing what the author talks about. The cocky writing style the author utilizes gets annoying, as do the constant plugs to buy to more of the authors books.
Bottom line: Even though this feels like a sales brochure, it is better than many of those published during the net bubble (because its realistic). Half of it could be cut out without losing anything. It's a two or three star book at best.