Recent studies have shown that the notion that most millionaires are born into wealth is a myth. In fact, over two-thirds of millionaires are self-made, according to a 2019 study by Wealth-X and a study by Fidelity Investments. These studies found that self-made millionaires often share a few core characteristics, such as setting ambitious goals, seeking mentorship, taking calculated risks, learning from failure, managing time effectively and diversifying their investments.
Dave Ramsey, personal finance expert and founder of Ramsey Solutions, also found that the majority of millionaires – 79% – did not receive an inheritance from parents or other family members. Instead, they achieved millionaire status through hard work and smart financial choices.
The National Study of Millionaires by Ramsey Solutions found that five careers produced the most millionaires — engineers, accountants, management, attorneys and teachers. While these professions strongly correlate millionaire status to higher education, that didn't necessarily mean having to attend a swank school. Only 8% of those in the study attended prestigious private schools, with 62% attending state schools.
The millionaires in the Ramsey survey didn't necessarily hold senior leadership roles. Only 31% of self-made millionaires averaged $100,000 per year over the course of their careers. One-third of millionaires surveyed never earned a six-figure salary in any single working year.
Although 93% of the millionaires said they "worked hard," the key to their success was not just hard work. They also made smart financial decisions.
More than 94% of respondents disclosed that they live within their means, while nearly three-quarters have never carried a credit card balance throughout their lives.
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The Ramsey survey also found that 80% of millionaires have a 401(k) account. This is a significant statistic that speaks volumes about the effectiveness of these retirement savings plans.
Self-made millionaires are more than just lucky – they possess a certain set of personality traits that have played a major role in their financial success. Living on less than they earn, avoiding high-interest credit card debt, spending $200 or less each month at restaurants and using coupons are ways these millionaires achieved their financial goals.
The path to becoming a millionaire isn't an easy one. It takes time, patience and persistence. The average millionaire worked, saved and invested for 28 years before hitting the coveted million-dollar mark. Many of them didn’t achieve this milestone until around the age of 49.
Investing in the next generation of innovation
Building a diversified, long-term portfolio is critical to any wealth-building plan. Thanks to changes in federal law, investors have a new tool at their disposal that has minted many of the world’s billionaires: startup investing. Platforms like StartEngine allow anyone to invest in high-growth startups alongside some of the top venture capitalists in the world, like Bill Gates, Andreessen Horowitz, and more. This includes investing in StartEngine itself, which boasts Kevin O'Leary as an investor and spokesperson.
See more on startup investing from Benzinga.
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