Last summer I read a couple of books about millionaires in America, who they actually are, what they did to become millionaires, how they live, how you might identify them.
Thomas J. Stanley and William D. Danko point out in their best-selling book, The Millionaire Next Door, that more than 80% of the millionaires in their study were ordinary people who accumulated their wealth in one generation. Most built their assets slowly and steadily, without the benefit of a financial windfall. Regular folks much like you and me. It wasn’t lottery or inheritances. Most of these individuals had started and successfully run profitable businesses (not usually retail, however) or they had controlled their expenses compared to income, and invested in something that grew with time.
When you think of luxury cars or fancy watches as clues to the amount of a person’s wealth, think again. Such material displays may only indicate a high income, not high net worth. Many millionaires typically do not display high-consumption lifestyles, despite their financial success. Think Warren Buffett.
Stanley and Danko found that wealth is most often the result of a lifestyle based on hard work, perseverance, planning, and self-discipline. High-net-worth investors say the following factors were most influential in helping them attain wealth:
Hard work - Education - Smart investing - Frugality - Taking risk - Luck - Being in the right place at the right time - Decisions made by a financial planner - Inheritance - Running own business Source: Spectrem Group, “The Millionaire Investor,” pg. 28, 2008.
We’ve all heard stories about the unassuming, little old lady who died and to everyone’s surprise, had several million bucks “in the bank”. How could that be? Somewhere along the way she put a little bit away, maybe bought a couple shares of her favorite company stock. That’s something we can all do. Really it’s about making smart choices and sticking to them.
I’m pretty sure I wouldn’t mind being a millionaire; I did buy five Mega Millions lottery tickets last week as proof. But I also know that most likely it’ll just take time and perseverance to reach my personal and financial goals.
Angie Furubotten-LaRosee, CFP® is a financial planner who helps regular people with "big picture" planning, focusing on their money and their lives.
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