Ramsey Solutions, an American company created by personal finance specialist Dave Ramsey, launched what it says is the largest survey of millionaires with 10,000 participants.
The National Millionaire Study was done to understand how your behavior and attitude towards personal finances determine your financial success. The nationally representative sample was conducted from November 17, 2017 to January 31, 2018, using a third-party research panel and the company’s own research panel.
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What’s interesting about this research exercise is that it basically showed a dramatic difference between how Americans believe wealthy people get their wealth and what they actually do to earn and spend their money.
If you wonder how did they get to the million dollar mark? The answer is this: They did it through constant investing, avoiding debt like the plague, and spending wisely. No lottery tickets, almost no inheritances, no six-figure income. You want to know more? Stay until the end, you will be surprised.
How do millionaires invest?
According to the survey, 8 out of 10 millionaires invested in their companies’ 401 (k) plan, and that simple step was the key to their financial success. The 401 (k) is a retirement savings and investment plan offered by employers. Contributions are automatically withdrawn from employee paychecks and invested in funds of their choosing from a list of available offerings. Workers can exempt taxes by making voluntary contributions and withdrawing their earnings when they reach retirement age.
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And not only this, because 3 out of 4 millionaires surveyed also invested outside of their companies’ plans, although beware! They did not risk their money in investments of the type “it is an opportunity that they could not pass”. In fact, no millionaire in the study said that investing in a single stock was a major factor in their financial success. Individual stocks weren’t even on the list of three factors for reaching their net worth.
Study participants became millionaires by constantly saving over time. In fact, they worked, saved, and invested for an average of 28 years before hitting the million dollar mark, and most of them reached that milestone at age 49.
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Three out of four millionaires (or 75%) stated that regular and constant investment over a long time is the reason for their success. “So the story of the young computer genius who developed an application that made millions overnight is the exception, not the rule,” warns the study.
The rich are careful what they spend
Although most of us believe that a rich person automatically acquires the right to rest on their laurels, reality says otherwise … or at least what this survey reflects, since 94% of the people consulted said that they live with less than what they earn and Almost three-quarters of millionaires have never had a credit card balance in their life, they spend $ 200 (approximately $ 4,000 pesos) or less each month in restaurants, and 93% use coupons when they shop.
In short, by not getting into debt and keeping an eye on expenses, they are able to grow their bank accounts instead of trying to get out of a financial hole every month.
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Another interesting finding from the National Study of Millionaires was that 79% of millionaires in the United States did not receive an inheritance from their parents or other relatives, only 1 in 5 millionaires (21%) received an inheritance, and only 3% received an inheritance. inheritance of a million or more.
In fact, most millionaires did not even grow up with a lot of money, as 8 out of 10 millionaires come from middle-income or even below-average families. Only 2% of the millionaires surveyed said they came from a high-income family.
What is the salary of a millionaire?
It turns out that most of the millionaires in this survey did not have high-level jobs or high salaries: only 15% held senior leadership positions, such as vice president or executive positions (CEO, CFO, COO, and so on). 93% of those surveyed said that they actually got their wealth because they worked hard, not because they had big salaries.
Moreover, only 31% reached an average of $ 100,000 dollars (two million pesos approximately) a year throughout their professional career and a third never reached six figures in any year of their career.
Where do those who became millionaires study and what careers do they choose?
And, by the way, the 5 majors from which the largest number of millionaires have graduated in the neighboring country to the north are engineering, certified public accounting (CPA), teaching, management and law.
In addition, almost two-thirds of millionaires (62%) graduated from public schools, while only 8% attended a prestigious private school. But beyond the alma mater, the relevant thing is that the majority of millionaires worried and took care of obtaining that role.
Finally, the survey of millionaires found that 88% of them graduated from college, compared to 33% of the general population. And more than half (52%) of millionaires have earned a master’s or doctorate, compared to 12% of the general population.
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