04 Mar The Millionaire Myth
- A widely held but false belief or idea.
- A misrepresentation of the truth.
- A fictitious or imaginary person or thing.
- An exaggerated or idealized conception of a person or thing.
– Oxford English Dictionary
Forget the Kardashians. Forget Floyd Mayweather, Jr. Forget Jay Z. Forget about Mary-Kate & Ashley Olsen. Forget about Paris Hilton. Forget everything Hollywood has ever taught you about American millionaires.
In fact, forget everything you think you know about American millionaires, because you are wrong. The average American millionaire is nothing like the myth you’ve taught to expect.
As Americans we’ve been taught that our millionaires drive luxury cars, live in palatial homes, and have an entourage. We’ve also been taught that the Tooth Fairy leaves money under our pillows at night.
We’ve been taught that American millionaires travel the world on exotic vacations to private islands, private chalets, and private yachts. We’ve also been taught that the Easter Bunny will leave us a basket full of treats every Easter.
We’ve been taught that our millionaires adorn themselves with luxury watches, designer clothes, and expensive handbags while dining on Russian caviar, Chateau Briand, and the finest imported wines. We’ve also been taught that Santa Clause brings us presents every Christmas.
We’ve been taught that America’s wealthy spend money without a care in the world, as though it grows on trees and is easily replaced. We’ve also been taught that there’s a pot of gold at the end of the rainbow.
The reality is, you’d have better luck taking a selfie with Sasquatch than you would finding the mythological American millionaire you’ve been taught to believe in.
I’m about to burst your bubble, because American millionaires don’t do any of the things you’ve been taught to believe they do. Of course, there are always exceptions, but research shows that those exceptions are rare. And just so you know, my 20 years of experience tells me that the research is correct.
So here’s what real American millionaires look like:
- They have a Net Worth of $1,000,000 – $4,000,000, averaging $3.7 million.
- 86% earned their wealth themselves. They have never received an inheritance.
- 78% grew up in poor or middle class families.
- 23% are small business owners & 8% are senior corporate executives.
- The most common job among female millionaires is school teacher & registered nurse.
- 85% are age 50 or older, averaging 57 years old.
- On average, they earn their 1st $1,000,000 at age 50.
- 86% are married. 65% are still their 1st marriage.
- 85% have children, averaging 3 children.
- 94% own a home. The average value is $250,000 – $500,000.
- Most own 1 home.
- Most live in a rural community located within 60 miles of an urban area.
- Nearly all own their vehicle (as opposed to leasing).
- The most popular vehicles among millionaires is the #1 Toyota Camry, #2 Honda Accord, & #3 Ford F-150. Jeep Grand Cherokees are also very popular.
- Most purchase used vehicles (as opposed to new vehicles).
- Among those that purchase new vehicles, most will own a vehicle for 5+ years before selling or trading.
- They save an average of 23% of all their income.
- 82% cite a strict savings regimen as the #1 way to build wealth.
- 83% believe smart investing is the key to building wealth.
- On average, 43% of their Net Worth is invested in stocks.
- 62% use a professional financial planner.
- The most popular stores among millionaires are Walmart & Family Dollar. The top 5 stores are all “discount stores”.
So, these folks definitely don’t look anything like the “Real” Housewives, nor any one else Hollywood promotes. In fact, they probably look like your neighbors and co-workers.
How do they spend their time, because the media would lead us to believe all they do is travel, shop, & enjoy a life of leisure?
- 86% work 50+ hours per week.
- 88% read at least 30 minutes per day.
- 76% exercise 4+ days per week.
- 67% watch less than 1 hour of t.v. per day.
- 63% spend less than 1 hour per day surfing the internet.
Oh my! It sounds like Hollywood really has filled our heads with lies about how millionaires live! Instead of wasting their time doing nothing, millionaires tend to spend the bulk of their time on productive activities.
If you don’t believe me, Goggle it. I’ve provided a few links below to get you started. You can also read books such as The Millionaire Next Door to find out how America’s wealthy really earned their money and how they really live.
Here’s a few interesting tidbits I’ve seen in 20 years of professional experience, though I haven’t found any research on these topics.
- Most have around 5% of their Net Worth in Cash to handle unexpected expenses, take advantage of investment opportunities, and to make charitable donations.
- Most are coupon shoppers. They’re not extreme couponers, but they do use coupons & discounts when possible.
- Most take 1 low budget domestic vacation a year, spending less than 2% of their annual income on vacation.
- Most are not afraid of the stock market. They view it as a key tool to build their wealth.
- Most hire financial planners & accountants, specifically searching for Certified Financial Planners (CFP) and Certified Public Accountants (CPA) and rely heavily on professionals to take care of their finances.
- Most search for value, not price, when hiring professionals. They are willing to pay to get what they want or need.
Here’s why I bring all of this up today:
- Most people who are not millionaires spend all of their money trying to live like a mythological Hollywood millionaire. Because of that, they will never become real millionaires.
I see factory workers earning $40,000 a year purchasing $80,000 trucks. I see $200,000 worth of vehicles parked outside $15,000 trailers.
I see not-for-profit employees taking annual vacations to Caribbean resorts. I see middle-class families taking a vacation every time a child has a break in school, sometimes 2, 3, or 4 vacations a year.
I see people earning minimum wage buying $150,000 homes and see 1st Level Supervisors buying $750,000 homes.
I see fast food workers with $1,000 smart phones and grocery store clerks with $500 handbags.
I see a lot of things, especially expensive vehicles. Do you know that approximately 95% of luxury vehicles on the road today are leased? That means 95% of those cars are driven by people who can’t afford to drive those cars!
Soooo, compare your Net Worth to the Net Worth of real American millionaires. Compare your spending habits to the spending habits of real millionaires. Compare how you spend your time to how real millionaires spend their time. If you are like most people, your spending outpaces that of real millionaires, which means you will never actually become a real millionaire.
But here’s the good news; it’s easy to become wealthy & you can change.
1,700 Americans become new millionaires every single day! That’s how easy it is to become wealthy in the United States. All you have to do is change your financial habits.
Sapiat Asset Management is an independent registered investment advisor, specializing in financial planning based, asset management for Gen X Individuals & Families, their Businesses, & the Trusts that benefit them.