Want to know what it takes to be a millionaire? Well, Ramsey Solutions went straight to the source and surveyed 10,000 of them. And some of the findings were surprising. Like: eight out of 10 invested in their company’s 401(k) plan.
But wait. Aren’t millionaires supposed to live off Mumsy’s trust fund and coddle the family cash pile in their Martha’s Vineyard seaside homes? Not exactly — in fact, not even close. Dave Ramsey, personal finance expert and founder of Ramsey Solutions, says this myth of primarily inherited riches is “flat wrong.”
When Ramsey’s National Study of Millionaires asked where the riches came from, they found that a whopping 79% didn’t receive any inheritance from parents or other family members. Not one cent. Unpaid bills perhaps (though the study didn’t ask). But coffers of jewels and blue chip stocks? Nope.
So how did they achieve millionaire status, and what can you do to replicate their success?
Choose the right career
The Ramsey study found that five careers produced the most millionaires: engineers, accountants, management, attorneys and teachers.
While these careers strongly correlate millionaire status to a higher education, that didn’t require attending a swank school. In fact, only 8% of those in the study attended “prestigious private schools,” with 62% attending state schools.
And one crucial detail to note: Millionaire status doesn’t equal sky-high salary.
“Only 31% averaged $100,000 a year over the course of their career,” the study found, “and one-third never made six figures in any single working year of their career.”
On top of that, the millionaires in the Ramsey survey didn’t necessarily hold senior leadership roles: Only 15% belonged to that category. By contrast, more than nine in 10 (93%) said they got wealthy because they “worked hard.”
Where hard work meets smart finance
Great job performance goes into financial hyperdrive when teamed with savvy preparation for retirement. In fact, the study found eight in 10 invested in their company’s 401(k) plan. These plans not only offer tax breaks as you build up savings but also feature, in many workplaces, an employer match that may run as high as 6% of your paycheck.
Careful spending is also crucial as 94% of respondents said that they “live on less than they make,” while about three-quarters “never carried a credit card balance in their lives.”
Read more: The great escape: Rich young professionals earning over $100K are fleeing California and New York — here’s why and where they are headed
The key is to create a budget and stick to it. These millionaires spend less than $200 each month on restaurants, and 93% use coupons while shopping.
(Consider, though, whether there’s a higher value way to spend your time. You might do much better putting in an extra hour of work than spending that time clipping $10 in coupons.)
Waking up to the American Dream
If Ramsey’s survey highlights any salient fact, it’s this: A negative attitude, inaction and bad spending habits may present the biggest roadblocks to millionaire status.
To put it differently: You have to believe it. You have to take action. You have to guard yourself against frivolous spending and embrace smart saving. This is the stuff the American Dream is made of, and what turns it into a million-dollar reality.
What to read next
Inflation eating away at your budget? Here are 21 things you should never buy at the grocery store if you are trying to save money
The US now has just 25 days of diesel supply — the lowest since 2008. Here’s why that’s more alarming than a dwindling ‘oil piggy bank’
‘Not the time to get greedy’: Home flippers are now getting burned by the US housing downturn, slashing prices to cut losses — here are two big reasons why
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
#born #Dave #Ramsey #millionaires #didnt #receive #inheritance #parents #family #members #heres #big #money