6 myths about wealth you need to stop believing
The answer to that question OUGHT to be, for every person living in the United States, an emphatic I DO!, followed quickly by “And I already am”, or “And I’m right on track to become one”.
In a recent coaching session with one of my newer clients, a 40-something year old woman, the topic of becoming a millionaire came up. I don’t remember exactly how, but probably through me explaining that once she gets out of debt and on track with her retirement investing, that she can easily retire as one.
From my perspective, this is just really no big deal, especially for someone like her who makes north of $80,000 a year and has pretty low expenses. But you should have seen her face, once she realized I wasn’t joking...big eyes, jaw dropped, and speechless.
Why do people make such a big deal out of achieving a million dollar net worth? It’s actually a pretty lame goal for anyone who EVER has an annual income over $100K in their lifetime. With that income, your goal to reach by retirement age ought to be more in the neighborhood of $5 million or more.
Check out this news story of a simple blue collar guy in Iowa who surprised 33 local teenagers after his death by covering the entire cost of their college tuitions. The point is that ANYBODY can be a Dale Schroeder if they really want to.
Don’t believe the myths people tell about millionaires and how they got there.
Instead, learn the truths revealed in the largest study of millionaires ever conducted:
Myth: Wealthy people inherited all their money.
Truth: 79% of millionaires never received any inheritance. 84% received zero or up to $100,000, meaning they did not become millionaires because of inheritance.
Myth: Wealthy people are just lucky.
Truth: 76% of millionaires surveyed say that anyone in America can do what they did and become a millionaire with some discipline and hard work.
Myth: Wealthy people make risky investments.
Truth: 79% of millionaires reached millionaire status through their employer-sponsored retirement plan.
Myth: Wealthy people take stupid risks to get rich quick.
Truth: The average millionaire hits the $1 million mark at 49 years old, after decades of hard work. Only 5% got there in ten years or less.
Myth: Wealthy people have prestigious private school educations.
Truth: 79% of millionaires did not attend prestigious private schools. 62% graduated from public state universities, 8% attended only community college, and 9% never graduated at all.
Myth: Wealthy people have high paying jobs.
Truth: One third of millionaires NEVER made more than $100,000 in a single year.
If you want to get into good physical shape, find a physical trainer who looks like Mr. America, and do what he does. If you want to be great at ANYTHING, find someone who is the BEST at what they do, and start doing what they did.
If you want to become a millionaire, follow these DO’s and DON’Ts recommended by millionaires:
DO live on less than you make. 94% of millionaires do this, as opposed to 55% of the general population. Not as a result of being a millionaire, mind you...this was how they became a millionaire.
DON’T go out to eat every night. The typical millionaire spends $200 or less per month on restaurants.
DO plan ahead and pay cash. 95% of millionaires save up for big expenses, compared to 67% of the population.
DON’T try to impress anyone. Only 7% of millionaires feel pressure to keep up with their friends and families when it comes to spending.
DO use a shopping list and stick to it. 85% of millionaires still use a shopping list when buying groceries.
DON’T pay your bills late. 96% of millionaires have never had a past due bill.
DO drive an older car with no payments. The average millionaire drives a four year old car with 41,000 miles on it, and 82% of millionaires have no car payments. Again, that’s not because they’re a millionaire, that’s how they became a millionaire!
DON’T have credit card debt. 73% of millionaires have never carried a credit card balance in their lives.
DO set goals. 92% of millionaires develop a long term plan for their money, compared to 60% of the general population.
DON’T live in a mansion. The average millionaire has lived in the same 2,600 square foot house for the past seventeen years.
DO save consistently. 70% of millionaires saved more than 10% of their income throughout their working years.
DON’T keep your home mortgage for the tax advantage. It took the millionaires surveyed an average of 10.2 years to pay off their homes, and 67% of them live in homes with paid off mortgages.
There is a lot more wisdom on what it takes to become a millionaire in the book “Everyday Millionaires” by Chris Hogan.
I strongly encourage you stop believing what your broke brother-in-law tells you about how to handle money, and instead start learning, and doing, what the typical millionaire did to get there.
If you need help implementing what you learn from the book, schedule a free consultation with me on my website at www.moneycoachbev.com.
All statistics quoted are from the 2018 National Study of Millionaires conducted by Ramsey Solutions. This was the largest study of millionaires ever conducted, and over 10,000 millionaires participated in the 119 question research survey that explored family background, career history, purchasing habits, investing strategies and more. Find out more by reading “Everyday Millionaires”, by Chris Hogan, Published by Ramsey Press, Brentwood TN, 2019, ISBN: 978-0-977489-52-7.