Many people get discouraged by discussions of financial planning and wealth building because they are uncertain whether their financial goals are actually achievable. They may even feel like their current financial position makes it unrealistic to change. In these situations, it may be helpful to understand who has been able to actually build wealth in the United States.
Two interesting studies have been done that related specifically to millionaires in the United States. The first was for a book titled The Millionaire Next Door. The second was also published for a book titled Everyday Millionaires. Both of these books were focused on what types of individuals have been able to save money and build wealth. There is a perception in the United States that everyone with wealth started a technology company, is a professional athlete, or is an influencer. Here are some of the interesting statistics of those who have actually built wealth, all taken from the two cited books above:
- Many millionaires do not drive luxury cars. Ford is the second most popular car brand.
- Over 80% went to public schools
- They spend $200 or less per month at restaurants
- The vast majority never had credit card debt in their entire life
- Nearly 80% of millionaires never received ANY inheritance
- Nearly 80% of millionaires come from families at or below middle-income levels
- Nearly 65% of millionaires averaged below $100,000 in income per year of their career
- The average millionaire takes 28 years to have a net worth of $1,000,000
In reality the vast majority of people with a net worth of at least $1,000,000 are first generation millionaires that received no inheritance, had average career incomes below $100,000, live a lifestyle that avoids consumer debt and spend money prudently. Clearly there are some circumstances in life that make it very difficult for individuals to save and build wealth. However, there are steps that the majority of people can take to make progress.
Elon University’s Center for Financial Literacy strives to promote the basic principles that individuals can know and follow to make this a reality. We also seek to promote learning of topics that play an important role in building and protecting wealth such as budgeting, investing, health insurance, and home buying. Through increasing knowledge in these areas, we believe individuals can overcome financial discouragement and confusion – and instead feel confident about their financial decision-making.