"The Millionaire Next Door: Unveiling the Secrets of the Wealthy and How to Achieve Financial Success"

 "The Millionaire Next Door: Unveiling the Secrets of the Wealthy and How to Achieve Financial Success"

 

 

Here are the eight common denominators of those who successfully build wealth:

 

 

1. They live well below their means.

2. They allocate their time, energy, and money efficiently in ways conducive to building wealth.

3. They believe that financial independence is more important than displaying high social status.

4. Their parents did not provide economic outpatient care.

5. Their adult children are economically self-sufficient.

6. They are proficient in targeting market opportunities. Find your niche.

7. The character of the business owner is more important in predicting his level of wealth than the classification of his business.

8. They chose the right occupation. 

 

Additional characteristics:

• Most (97%) are homeowners, about half have occupied the same house for over 20 years.

• About 80% of them are first-generation millionaires.

• Only a minority of them drive the current-model-year car, and only a minority ever lease their motor vehicles.

• They tend to have "go-to-hell funds". They have accumulated enough wealth to live without working for at least ten years.

• They save at least 15% of their earned income.

• They are fairly well educated, with only one in five not having a college degree. They believe education is extremely important for them, their children, and their grandchildren. While only 17% of them have attended a private school, 55% of their children are currently attending or have attended private schools.

"The relationship between education and wealth is negative. High-income individuals are significantly less likely to hold graduate degrees…Millionaires typically indicate on our survey 'business owner' with 'some college', 'four-year college graduate', or 'no college'."

Investing

Perhaps unsurprisingly, the millionaires in the survey are fastidious investors. On average, they invest about 20% of their household income each year. 79% have at least one brokerage account, and most make decisions themselves.

Nearly all millionaires own stocks (95%), but on average, they have just above 20% of their net worth in publicly traded stocks. "They rarely trade and don't follow the ups and downs of the market day by day. Most don't call their stock brokers each morning to ask how the London market did."

Unlike a typical investor in the stock market, only 9% of surveyed millionaires own stocks for less than a year. 42% of them had made no trades whatsoever in their stock portfolios in the year prior to the interview. 32% hold their investments for more than six years. 20% and 25% hold between 1-2 and 2-4 years. 13% between 4-6 years.