A lot of people may think that becoming a millionaire is unrealistic. However, this is simply not the case. First, let us define what a millionaire is. It is when you subtract what you owe from what you own, and that number (net worth) is $1 million or more. Recently, Ramsey Solutions, located in Nashville, TN, completed one of the largest studies of millionaires ever, analyzing “everyday” millionaires (over 10,000) and researching their salaries, what they invest in, what their net worth is, and much more. They found some very interesting results, some of which may surprise you.
If you would like to read more into this study and what was found, be sure to read Everyday Millionaires by Chris Hogan, it is a fantastic read.
Here is some of what they found:
First, 79% of millionaires did not receive any inheritance from family members at all. Millionaires invest in employer-sponsored retirement plans such as a 401(k) and 403(b). In fact, this is the number one wealth-building tool that people use to become millionaires. The reason for this is because employers can match a percentage of your contributions, essentially giving you free money. Other plans that these people used are IRAs (Individual Retirement Accounts) that provide tax advantages. Along with this, millionaires are more likely to own a home than the general population, with their home itself being paid off in 10.2 years with an average size of 2,600 sq/ft, and drive paid off cars that, on average, are 4 years old with 41,000 miles on them.
Some other stats they found:
68% of millionaires work with an investment professional (such as a wealth manager or financial planner) to reach their net worth
92% set long term goals for wealth building and their money, saving and investing for 28 years on average before reaching millionaire status.
94% of millionaires say they live on less than they make and 70% save more than 10% of their income
There is so much more information that can be shared. But in short, to start on the path to millionaire status, create a plan and start now.
Everyday Millionaires – Chris Hogan