Who Wants to Be a Millionaire?

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Did any of you see that headline and say, “Naw, not me!”  Surely given the opportunity, everyone would be interested in having more money, right?  Years ago, a very popular book by Thomas Stanley came out called The Millionaire Next Door.  The premise of the book was interesting, and possibly surprising to some: millionaires are not necessarily the folks that make a ton of income each year.  Rather, most millionaires built their wealth having had more ordinary career positions, or they started their own business.  Furthermore, most millionaires are “average Joes” versus the stereotypical Hollywood “rich guy.”

Stanley’s study was important, because many times people assume that if they could only make the big bucks, wealth will follow.  Stanley differentiated between high earners and high net worth individuals.  He made it clear that while having a high income COULD lead to high net worth (in other words, great wealth), it wasn’t a guarantee.  The lifestyle chosen by the person at any income level is what made the different.

High earners tended to spend their money more ostentatiously, and thus, they did not build wealth.  More modest earners who watched their pennies and saved diligently are the ones that built the most wealth.  This should be great news for all of us!

Recently, I came across a related article by Ellen Stark (what a coincidental name!) in Money Magazine.  Ellen’s piece provided a terrific infographic about 12 Habits of Millionaires.  Her habit list completely coincides with advice I have always given about wealth building.  Let’s look at her list of millionaire habits.

Be a super saver

The majority of those surveyed reported that saving early and regularly was the chief reason they were able to build wealth.  While it wasn’t an overwhelming majority at only 56% of the respondents, I would argue that being a super saver is super important if you want to build wealth.  In addition, it is important to save regularly and leave it alone to grow.  Too often, people fall into the trap of building up savings only to spend it on something that is not a long-term asset.

Another interesting note that supports Stanley’s book premise is that only 26% of the respondents cited “earning a lot of money” as the chief component of their wealth building.  It would be wrong to suggest that all high earners don’t build wealth.  The key is not spending all the income you make, regardless of your income level.

Start early

The Money Magazine infographic gives the average age the millionaire respondents started saving money (age 14), started working for money (age 15), and started investing in stocks (age 25).  An obvious take-away on this habit, assuming you have already surpassed those young ages, is to teach our kids to save, work, and invest as early as possible.

But don’t make the mistake of assuming that just because you are much older than the average ages given, you are out of luck.  First, the ages given are average ages.  That means some of the millionaires who responded were younger than the average when they started the saving habit, but some were clearly older.  Don’t be discouraged about averages.  Second, it is never too late to start saving.  Whether you are in your 20s, 40s, 60s, or 80s, you can benefit from improving your saving habits.

However, the younger you are when you adopt better saving habits, the more time you have to benefit from compound interest.  Teach your kids this!

Work hard

This one should be a no brainer but bears discussion.  The odds of a “get rich quick” scheme panning out are near zero.  Making money and building wealth require hard work.  The sooner you accept that sacrifices need to be made to become a millionaire, the better off you will be.  You cannot make a decent salary and then blow all your income and expect wealth to grow.

Starting and building a successful business can be an excellent path to wealth.  But again, it ain’t easy.  Building a business, while rewarding in many ways, is definitely hard work.

Invest for the long term and manage investment risk

I put these two together because they both relate to investing.  A common reason people fail to build wealth through investments is a lack of patience.  Buying a stock and expecting it to double in value in a year or two is folly.  Choose investments carefully (or seek help doing so) and then commit for the long term.  As they say, time in the market always beats trying to time the market.

The longer your investment time horizon, the more risk you theoretically can take with your investments.  You would be wise, however, to avoid speculation.  Everyone wants to find the next tech start-up that will be the next Google or Apple.  But the truth is, the odds of your choosing a winner is slim.  You would be wiser to invest in a well-diversified mutual fund and let it ride.  For years.

Get help

The majority of the millionaire respondents cited use of a financial advisor as one of the factors of their success at wealth building.  I will be the first to tell anyone that money, financial planning, and investing are not rocket science.  Nevertheless, it does take some time to learn enough to stay out of trouble.  If you are neither interested enough to learn, nor confident enough to make financial decisions on your own, by all means, hire help.  The more advanced your situation becomes (more account choices, more funds to invest, more options in general), the greater the benefit to having a sounding board for your financial decisions.

Educate yourself

The vast majority of the respondents claimed to have graduated from college or at least had some college education.  Taking your education past high school is imperative to be successful in this world.  Does it have to include college?  Not in my opinion.  Whether you choose a college education or not, you must work to keep yourself educated.  The world is changing more rapidly than ever.  You cannot afford to be left behind due to lack of an education.

Watch your splurges

This habit goes hand-in-hand with building a saving habit.  Becoming a millionaire doesn’t require living a life of no fun and no frivolous spending.  But it does require that you are careful about how much of your income is spent on such things.  In general, you want to minimize the amount of money you spend on depreciating assets (cars, boats, clothes, electronics, etc.) in favor of assets that grow, such as stock investments and real estate.

Lifestyle creep is a huge factor here.  Lifestyle creep occurs when your spending level rises at the same pace as your income over time.  The sooner you can stop this pattern and direct your additional income into assets that will grow, the better.


The Money Magazine infographic indicates in two of the millionaire habits that people with wealth are thoughtful about their spending.  Whether it is using coupons, shopping at discount stores, buying second hand, or not hiring out for tasks they can complete themselves, people who build wealth are careful about their spending.  Selective is probably the better word.  Just like with splurges, wealthy people don’t go overboard.  They might hire help in some areas of life but not others.  They also might buy more expensive, higher quality items occasionally, but shop for discounts in other areas.  The bottom line is that they tend to be mindful about where their hard-earned money goes.

Make a plan and set goals

Yippee!  I couldn’t believe planning and goal setting were so far down the list, but I’m sure the list wasn’t in any particular order.  You don’t build wealth accidentally, as a rule.  Being successful with your money requires that you have some sort of plan.  Sure, the plan could be pretty loose: if you just started socking away 25% of all your income into long-term, growth investments, you’ll build wealth even without a clear plan for where you are going.  A better approach, however, is to set a target for yourself and then relentlessly work your plan.  Goal setting is part of the program, but don’t be scared off.  You can adapt your goals and your plan as your life changes over time.

Going through life adrift without any direction is bound to cause you to end up . . . nowhere.

Be generous, don’t gamble

Gambling might be fun and exciting, but it surely is a fast way to whittle away your wealth.  The probability of being consistently successful at gambling is infinitesimally small.  Make gambling a tiny, or better yet nonexistent, part of your financial life.

A far better use of your money is to give back to your community and to people and causes in need.  Help others and be generous with your money as a regular part of your financial plan.


How about you?  How many of these millionaire habits are you following?  Share below!  Or if you want to start a discussion with some like-minded friends, join the free SimpleMoney Community on Facebook to share your thoughts!

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You might also enjoy:

Saving Money on College

How to Find the Right Financial Advisor for You

Avoiding Lifestyle Creep: A Cautionary Tale, Part 1




2 responses to “Who Wants to Be a Millionaire?

  1. This is a great post! It follows all the thinking my dad shared with me. As someone who likes to travel to see new places and visit friends it is easy to fall out of my carefully laid budget plan. I always keep the big picture in mind. I have never been a big earner but always saved and invested.

    1. Thanks, Ellen! No one is perfect, and the main thing is that you keep your focus on the long haul and get back on track. Being a consistent saver and investor is the key, so good for you!

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