INSIGHTS FROM THE MILLIONAIRE NEXT DOOR

The Millionaire Next Door by Stanly and Danko

Only 3.5% of America’s 100 million households are in the million dollar league. Therefore, 3.5 million out of 100 million households are millionaires.

About 50% (1.75 million) of these millionaires have at least 1.6 million, 6% (210,000) have over $10 million. The average household net worth is about 3.7
million.

Only one in 20,000 households earn more than $5 million per year.

80% of America’s millionaires are first generation rich. Most never received an inheritance.

They typically work a 45.55 hour week.

Wealth is not the same as income. Wealth is what you accumulate not what you spend. Being frugal is the cornerstone of wealth building.

Wealth is most often the result of a lifestyle of hard work perseverance, planning and self-discipline.

The seven common denominators among those who successfully build wealth include:
-Living Well Below Your Means
-Allocate Time, Money, and Energy Efficiently
-Financial Independence is More Important than Status
-Their parents did not provide economic outpatient care
-Their adult children are economically selfsufficient
-They are proficient in targeting market opportunities
-They chose the right occupations
·
Self-employed people make up 2/3 millionaires in America. Yet, the self employed represent less than 20% of the workers in America.

They live on less than 7% of their wealth.

97% of the wealthy are homeowners and have occupied the same home for more  than 20 years.

Most of the wealthy wear inexpensive suits. Most millionaires never pay more than $399.00 for a suit and own American made cars that are not the current year model.

The wealthy are fairly educated. 4/5 millionaires are college graduates. 18% have master degrees, 8% have law degrees, 6% medical degrees and 6%PhDs.

Education is extremely important to the wealthy. They spend heavily on education for their offspring.

20% of the household’s wealth is in transaction securities such as stocks and mutual funds. They rarely sell their equity investments.

Over 20% of the household wealth are in pension plans while 21% of the wealth is in private business.

They recommend accounting and law as professions for their children. Tax advisors and estate planning experts will be in big demand over the next 15 years.

The business millionaires are in are classified as dull to normal and include careers such as rice farmers, pest controllers, stamp dealers, paving contractors
etc.

Only 17% attended private school as a child. Yet 55% of their children attend private school.

12% of business entrepreneurs are born elsewhere and are first generation millionaire. However, the children of first generation millionaires usually enter
the labor market and live the typical high consumption lifestyle.
·
The Top 10 Millionaire Ancestry Groups
Russian 22%
Scottish 20%
Hungarian 15%
English 7.71%
Dutch 7.23%
French 5.5%
Irish 4.88%
Italian 4.00%
German 3.32%
Native American 1.99%

To find what your net worth should be multiply your age times your realized pretax annual household income divided by ten.

The typical millionaire never spends more than $140.00 for a pair of shoes.

Millionaires are very punctual. They are never late for meeting and strive to be at work each day at 6:30 a.m.

Over half of all millionaires never spend more than $235 for a wrist watch.

Johnny Millionaire lives in a fine home but has no mortgage.

Johnny Millionaire funds his children’s college accounts before they even begin attending college.