By Lucas Counts
Do you want to be a millionaire?
Who wouldn’t want to be? Though becoming a millionaire seems way out of reach for many people, a lot of beliefs about the wealthy are simply untrue. Being a millionaire simply means that your assets add up to more than $1 million. These days, that isn’t as much as it seems. Millionaires are more common than you’d think, too. A 2021 report from Credit Suisse found that there are roughly 22 million millionaires in the U.S. alone!
If you want to have a net worth $1 million dollars (what you own minus what you owe), you have to look critically at the lives of millionaires, and see whether their habits (or lack thereof) may or may not align with what we think.
On a societal level, we tend to think of a millionaire as someone who owns sports cars and mansions, but this isn’t generally the case. While $1 million is more than the average American may be worth, it’s not enough to get you a private jet, in most cases. As such, there are other misconceptions about millionaires that many young people, such as Gen Zers, should do away with.
Here are a handful:
1. Millionaires inherited their money
A 2021 survey of the general population by Ramsey Solutions found that 74% of millennials believe millionaires inherited their money. While true in some cases, it’s often not. Only 21% of millionaires received an inheritance at all, and 16% received more than $100,000. And, in what will be a shocker for some, only 3% receive a sum at or above $1 million dollars.
The takeaway? Most millionaires were not given their wealth.
2. Millionaires always have expensive degrees
There is another big misconception that is quite prominent among Gen Zers in particular, and that’s the notion that all or most millionaires earned fancy, expensive degrees from big-name colleges and universities. Again, it’s not necessarily true.
Diplomas and degrees are important, but earning one requires a big investment, and sometimes, the debt incurred isn’t worth it. In today’s workforce, some companies are much more concerned with the skills and work-ethic employees bring to the table rather than where the degree came from.
If you went to a school that charged $50k a year for tuition instead of $12k, congrats. A study of over 10,000 millionaires, this research also by Ramsey Solutions, showed that it’s the degree people get that matters, not where it came from. If you get a degree in left-handed puppetry from Cornell, I wish you the best of luck translating this certificate into a marketable and relevant service as a professional.
While it is true that nearly 90% of millionaires have a diploma, almost two-thirds of millionaires (62%) from the Ramsey study graduated from public state schools (gotta get in on that in-state tuition), while only 8% attended prestigious private schools. What this means is that going to podunk state university does not mean you will make no money and suck at life.
Something many teens and twenty-somethings need to hear: a higher number on what you pay for your degree doesn’t guarantee success later on. Someone’s habits and the way they live their life is a far better indicator for future success. Some of the smartest and most successful professionals I’ve met either never graduated from college, or they went to a state university.
3. Millionaires only do it for the money
Some hard-working millionaires don’t enjoy their work (like everyone else!) but grind to make a good amount of money. This, however, doesn’t describe the vast majority of wealthy people.
In fact, 80% of millionaires love their work and find meaning in it, according to the Ramsey Solutions survey. After all, if you have no purpose in what you do, the work you do will be directionless and won’t have the same quality of someone working with a passion and love for the same job.
4. Millionaires all earn big salaries
There is another big misconception that millionaires are people with big salaries. While this is sometimes the case, many high-level executives with high salaries still find themselves in financial trouble.
This isn’t because they don’t make bank. It’s because they don’t save and invest their earnings.
As such, it’s not about what you earn, it’s about what you spend, save, and invest. Of the thousands of millionaires from the Ramsey Solutions study, only 31% averaged earnings of more than $100,000 over the course of their careers. One-third of millionaires never make six figures a single working year of their life.
So, how’d they do it? Chances are, many of them lived below their means for years, and invested in assets that gained value over time! It can be done. Teachers consistently prove this misconception to be inaccurate, as teaching is the profession with the third-most millionaires.
Big keys to financial success:
Here’s a quick recap:
- Work hard: High-net-worth individuals usually build their fortunes through hard work and persistence, not a windfall from an inheritance or lottery win.
- Go to school, but realize the importance: Where you went to school isn’t as important as what you do with your education after graduating!
- Have a purpose and passion in your work: Having a love or passion for what you do is very important, as you’re going to spend a lot of time doing it.
- Have a lifestyle and plan that fits your paycheck: Making a large annual salary does not make you a millionaire over time. Wealth is acquired through what you keep, not what you make.
To wrap it all up, the path to wealth often has a lot less to do with what you earn, and much more to do with lifestyle choices. Keep that in mind, and make it a habit to revisit your financial plan and budget every so often to make sure you’re saving, investing, and living within your means.
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