Take a moment to imagine a millionaire. What comes to mind? For some, you might think of someone greedy or stingy. Or perhaps your mind goes immediately to doctors, lawyers, and celebrities. But do you know all the facts about millionaires?
A couple of years ago, Ramsey Solutions conducted the largest study EVER on millionaires in the United States. The results may very well surprise you! In fact, you may find that many of your neighbors are what they call Everyday Millionaires!
All the facts about millionaires in this article come from Chris Hogan’s book Everyday Millionaires. And I have to say, this is a fascinating read! It includes stories from real millionaires and tells you how they did it! If you want more details about how to become a millionaire, click the link above and check out Chris Hogan’s book!
Now, are you ready to learn about millionaires? First, we need to define what it means to be a millionaire.
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What is a Millionaire?
To put it simply, a millionaire is someone who has a combined net worth of $1,000,000 or more. But what is a net worth?
Your net worth is your assets minus your liabilities. In other words, it’s what you own minus what you owe.
Assets include things like your home, cars, bank accounts, retirement accounts, and anything of significant value.
On the flip side, liabilities include any debt you may have. That means your mortgage, car loan, credit card debt, or any other debt count against your net worth.
So, are you curious about your net worth? If so, you can check out this awesome net worth calculator. This will let you know where you stand on becoming a millionaire!
Notice that the definition of a millionaire is not someone who earns a million dollars a year. This means there are a whole lot of millionaires you didn’t know about!
For example, let’s say someone is 67 years old, has a house worth $250,000, and has a retirement nest egg of $850,000. That person is a millionaire even if they still drive old Toyotas and have a tiny TV.
So there you have it! See, you’re already learning some fascinating facts about millionaires! Now let’s dive into some more!
5 Fascinating Facts About Millionaires
Previously, I mentioned that the majority of these facts come from Chris Hogan’s book Everyday Millionaires. For this book, Ramsey Solutions studied more than 10,000 American millionaires. And before you raise the objection, they had a third party conduct the study. Therefore, some were familiar with Dave Ramsey’s teachings while others had never heard of him.
Yet, they found some consistencies with their findings regardless of whether they had followed Dave Ramsey. As the old saying goes, great minds think alike!
So, let’s begin!
1. Most Millionaires DID NOT Inherit Their Wealth
Chris Hogan notes that 74% of millennials and 52% of baby boomers believe millionaires inherited all of their wealth. However, the facts tell us something different.
In reality, only 21% of millionaires received ANY inheritance. 16% inherited more than $100,000, while only 3% inherited more than $1,000,000.
In fact, about 80% of millionaires came from middle-class or lower-class families and received no inheritance. And even many of those who received an inheritance received it AFTER they were already millionaires!
This busts the myth that the majority of millionaires just ride the coattails of their parents.
2. Millionaires Reached Millionaire Status by Investing in Their Company Retirement Plans
Guess what? Most millionaires didn’t get to where they are by making risky investments. Nor did they do it by coming up with some invention, or building a huge business. Nope! They did it by contributing to their company retirement plans. In fact, 79% of millionaires reached their status just by pouring money into their 401(k).
Pretty boring, isn’t it? It just goes to show that building wealth isn’t always this big flashy story. On the contrary, for most people, building wealth is a slow and tedious process.
Have you ever read the story of the Tortoise and the Hare? Of course, there are a lot of variations of the story. But one thing remains consistent: The tortoise wins every time.
The truth is that the average millionaire hits the million-dollar mark at age 49 after decades of investing. Conversely, only 5% of millionaires hit the mark in five years or less.
Therefore, patience and consistency are the key!
3. Millionaires Have Regular Jobs
What kinds of jobs do you think millionaires have? Are they movie stars? High-level executives? Or maybe professional athletes?
True, a lot of people in those fields are millionaires. But the vast majority of millionaires work regular jobs. Here are the top 5:
Teachers, who receive notoriously low pay, made the top 3! Not only that, but according to the Ramsey Solutions study, only 31% of millionaires averaged over $100,000 during their working career. And one-third NEVER made six-figures during any single year.
So, how did they do that? For most of them, by patiently investing in their company retirement plan.
This just goes to show that becoming a millionaire is more about managing your money wisely. Big salaries? While they help, they’re not the biggest factor.
4. Millionaires Live on Less Than They Make
I know, it’s a genius concept, isn’t it? However, it may surprise you to know that only 55% of the general population lives on less than they make. Conversely, 94% of millionaires live below their means.
Not only do they live on less than they make, but they also plan ahead. 95% of millionaires said they save in advance for big purchases. Typically, this means they saved and paid cash! They don’t fall for the 0% financing lure.
Finally, 93% of millionaires stick to their budgets. Do you still think budgeting can’t get you ahead? Think again! Making a budget allows you to plan ahead. And guess what? Even millionaires budget!
Also, you’ll find that most millionaires live pretty modest lifestyles. On average, they spend less than $200 per month on restaurants, drive used cars, and spend less than $35 on a pair of jeans.
Sure, some live extravagantly. But the majority are just your average, everyday people.
5. Millionaires Work Really Hard
Remember the myth we tackled earlier that said most millionaires inherited their money? Well, it’s still wrong! Instead, millionaires work hard and invest wisely.
Hard work consistently characterizes millionaires. In fact, 99% of them say their friends and family would describe them as hard workers. And no, I’m not using 99% as a generalization. That’s how they actually responded to the survey!
Not only that, but they also wake up early (70%), enjoy their jobs (96%), and consistently set goals for themselves (92%).
Now That You Have the Facts About Millionaires, How Do You Become One?
So, now that you have all these facts about millionaires, the next logical question is how do you become one? Well, I’ve got good news for you! I’m about to tell you!
The plan I personally follow is Dave Ramsey’s 7 Baby Steps. Dave outlines this plan in his book The Total Money Makeover. And I can’t recommend this book enough! It’s a step-by-step guide on budgeting, getting out of debt, and living generously. Check it out today!
1. Make sure you budget!
This may sound basic, but budgeting works! Budgeting allows you to take control of your money. Furthermore, budgeting allows you to tell your money where it needs to go every month. Otherwise, your money disappears at the end of the month. And you’ll never find it again.
Remember, 93% of millionaires stick to their monthly budgets! Having a budget, even if you have an irregular income, is a key factor to success!
2. Get out of debt and stay away from it!
Next, you need to learn how to hate debt. Debt will only steal from your dreams and from your future. After all, millionaires hate debt, too!
That’s right, most millionaires pay off their homes within 10.2 years! The majority of them (67%) currently live in homes with no mortgage. Furthermore, 73% never carried a credit card balance and 80% pay cash for used cars.
I know what you might say. “Of course they pay cash for everything! They’re millionaires!” But here’s the rub: They did this even before they were millionaires. That’s how they became millionaires! Remember, they live on less than they make and they don’t borrow money to get nicer stuff!
If you want to succeed with your money, you need to get out of debt. I’ve put together a step-by-step guide on how to get out of debt. Check it out!
3. Once you’re out of debt, invest 15% of your gross income into retirement
Remember, 80% of millionaires reached millionaire status just by investing into their company retirement plan. That means you should, too!
Once you get out of debt, you’ll have a lot more cash flow to start investing well. Start with your company retirement plan, if one is available to you.
What’s really nice is that many companies also offer a match. For example, if you put in 3%, then the company will also match that and put in 3%. That’s gravy on the biscuit right there!
But I also want to offer a warning: make sure you put in 15% regardless of the match. The reason for this is that your company can take away matching if they run into tough times. Therefore, you want to make sure you fully protect your future.
Use These Facts About Millionaires Well
As they say, knowledge is power! Now, how are you going to use these facts about millionaires?
I hope this inspires you to set goals, invest wisely, and change your mindset. You CAN become a millionaire!
Once again, I really hope you’ll check out Chris Hogan’s book, Everyday Millionaires. I didn’t even scratch the surface on some of these amazing millionaire facts! It’s really worth the read and you’ll find it inspirational!
And if you’re ready to start tackling your debt using the Debt Snowball Method, download your FREE Debt Snowball Worksheet today! Just enter your email below and I’ll send it right to you!