Millionaire myth busters (2024)

Millionaires just inherited their money. All they do is drive their brand new cars to the golf course while the rest of us toil away. The evil rich people.

We've all heard statements like that about millionaires, right? Maybe from a politician making the rounds on cable news or from your bitter uncle after one too many drinks.

But what if everything we think about millionaires is completely wrong? What if the mental image we have created in our minds of millionaires and their lifestyles is actually just fiction?

The research team at Ramsey Solutions conducted the largest survey of millionaires ever, calledThe National Survey of Millionaires. Our team spoke to more than 10,000 millionaires to finally get a clear picture of what asincerelywhat a millionaire looks like and what it takes to reach a seven-figure net worth.

Guess what? Many of our culture's views on how millionaires made their money are simply flatwrong. Let's debunk some of the most common myths about millionaires so you can discover the truth: that anyone in America can become a millionaire today, includingvan!

Millionaire Myth No. 1: Millionaires Just Inherited Their Wealth.

This is perhaps the most common millionaire myth out there. Many people would think that millionaires are just a bunch of trust fund kids sitting back and whizzing by on old money. While that image of millionaires is something you might see on a stupid TV show, it's just not reality.

Here are the facts: Nearly 8 in 10 (79%) millionaires received no inheritance at all.¹That's right: the vast majority of millionaires never received a cent from their parents and are first-generation millionaires who come from middle-class or lower-middle-class families.

The one thing most millionaires inherited from mom and dad was a strong work ethic and a fierce determination to achieve their goals.

Millionaire Myth #2: Millionaires took big risks with money to get rich quick.

Take a guess at how most millionaires reached millionaire status. They were not individual stocks. It didn't get in on the ground floor of their friend's exciting new "investment opportunity" (which probably never came to bevanthe earth). And theabsolutely certainwas not through cryptocurrency.

Ready for the answer? The main factor contributing to their high net worth was investing in retirement plans.²It's true! Most millionaires used their 401(k) and IRA to build their wealth. It's not flashy or luxurious, but it's proven: If you invest 15% of your gross income over 25, 30, or 40 years in tax-advantaged accounts,shallbecome a millionaire!

And when we talk about 'time', you will tooneedtime to become a millionaire! The average millionaire earns $1 million after age 49decadeswork, save and invest.³So if you thought most millionaires struck gold or won the lottery, think again. Building wealth is more like cooking with a crockpot than using a microwave. It takes more time, but the end result is much tastier and more satisfying!

We discovered that there was a special group of millionaires we call Baby Steps Millionaires – people who followed usof 7 babytrinpaying off debt and building wealth – hitting the million dollar mark20 years or lessfrom the beginning of their journey.

On average, Baby Steps Millionaires took about two and a half to three years to complete Baby Steps 1-3 (which includes paying off debt and building an emergency fund). And then another 17 years or less to complete Baby Stages 4-7 (this stage involves investing 15% for retirement and paying off the house early) and reaching a net worth of a million dollars. This process has worked for millions of Americans across the country, and it can work for you too!

Do you want to know more? Dave's latest book,Millionaires taking small steps, shows you the fastest way to follow the small stepsrightway to become a millionaire.Get a copy todayto learn how to break the barriers that keep you from becoming a millionaire.

Millionaire Myth No. 3: Millionaires went to prestigious private schools.

Newsflash!Vandoesn'tgoing to Harvard or a fancy private (expensive) school to become a millionaire. Our research found that only a handful of millionaires earned their degrees from Ivy League schools. Most millionaires (62%) actually graduated from state public schools.⁴And here's another fun fact: 1 in 10 millionaires (10%)never completed a university education at all.⁵

While a college degree is a worthwhile goal (88% of millionaires graduated with a bachelor's degree, compared to just 33% of the general population), don't consider aotherthat piece of paper is your golden ticket to success or wealth building.⁶

The truth is that millionaires come from all kinds of educational backgrounds. It doesn't matter what school you went to,vancontrol your destiny. The path to a million dollar net worth is available to everyone, no matter who your alma mater is!

Millionaire Myth No. 4: Millionaires got their net worth because they have high-paying jobs.

If we asked you to guess which careers are most likely to create millionaires, you would probably have doctors, business owners, or executives at the top of your list. After all, those jobs come with pretty high salaries (which certainly doesn't hurt). Butsurprise-none of these jobs made it to the top of the list!

When we asked the 10,000 millionaires what they did for a living, the top three answers were engineer, accountant and teacher.⁷It's true! Although teachers are criminally underpaid, teaching is still one of the most common professions among millionaires. Perhaps teachers understand better than most the importance of working hard and planning ahead with a long-term vision.

Here are the cold, hard facts: Nearly 7 in 10 millionaires (69%) diddoesn'taverage $100,000 or more in household income per year – and (get this) a third of millionairesneverhad a six-figure family income during their careers.⁸

When it comes to becoming a millionaire, it's not about how much you make; it's about what you do with what you have.

Millionaire Myth No. 5: Millionaires lead lavish lifestyles.

Many people have an image in their heads of what a millionaire looks like. They drive around in smart sports cars. They wear the latest designer clothes. They eat at five-star restaurants every night. We hate to burst your bubble (actually that's a lie - we actually enjoy it!), but most millionaires are more like your lowly neighbor than the fantasy we've created in our minds.

What do millionaires drive? The two most popular car brands among millionaires are Toyota and Honda, with almost a third of all millionaires (31%) saying they drive one of these brands.⁹

Do millionaires carry their money with them? Nothing! The millionaires in our survey said they spend an average of $117 per month on clothing.¹⁰Meanwhile, the Bureau of Labor Statistics reports that the average American household spends $146 every month.¹¹

Do millionaires eat steak, lobster and caviar every night? If so, they must be getting a good deal somewhere, because the average millionaire spends less than $200 on restaurants every month.¹²That's less than the average American household, which spends about $265 on dining out every month, according to the Bureau of Labor Statistics.¹³

It's about millionaires: many of them are simple, down-to-earth people who have no debt, live on less than they earn and save for their future. They developed habits that helped them build wealth over time, and these are the same habits that help them tooretaintheir wealth.

Millionaire Myth No. 6: Millionaires built their wealth all by themselves.

It's important to remember that building wealth is not a solo sport. Millionaires acknowledge that they don't have all the answers – and they probably never will. That is why most of them are lifelong learners and are constantly seeking wisdom and knowledge wherever they can find it.

Whether it's contacting a mentor or making an appointment with a professional, they aren't afraid to get help finding the answer when they have questions about something they don't fully understand.

That's probably why 68% of millionaires said they used a financial advisor to help them reach their net worth.¹⁴And the truth is, you don't have to be a millionaire to get help from a financial advisor; you can work with an advisor wherever you are on your financial journey.

Our SmartVestor program can connect you with financial advisors and investment experts in your area who can help provide answersVANquestions about investments and capital accumulation.

Find your financial advisor today!

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