Ramsey Solutions conducted the largest millionaire survey in the US with over 10,000 participants. The survey was conducted from November 17, 2017, to January 31, 2018.
The results of the survey were things that you would expect to see in these types of surveys. Here are a few examples:
8 out 10 millionaires invested in their company's 401(k) plans.
3 out of 4 millionaires said regular, consistent investing leads to success.
8 out of 10 millionaires were first generation.
However, there were three things that I did not expect to see from the survey:
The most common careers of millionaires.
The types of schools millionaires went to.
The way millionaires spend their money.
Let’s talk about each. This post is 732 words, about a 4 min read. Enjoy!
What do you think the most common careers are to become a millionaire?
Take a second.
According to the study, these are the 5 most common careers of millionaires:
We would all nod in agreement to the careers on the list, except for one.
TEACHER?
Yeah! I had the same reaction when I read the report.
The report also said, "Only 31% averaged $100,000* a year over the course of their career, and one-third never made six figures in any single working year of their career."
Quick interjection: Unfortunately, the survey did not provide demographic breakdown of participants. But I believe this survey is very likely to have a large number of Baby Boomers as participants. A very important note about the Baby Boomer generation is that they entered their core working years during one of the best times to be a working American citizen (1960s to 1980s). However, this does not take away from what they accomplished because not everyone became a millionaire under similar circumstances. Alright back to it.
Another observation from the survey is that most millionaires did not go to a prestigious college. Most went to a public university or state school. Only about 8% of millionaires went to a prestigious private school.
This is very different from the message we are told in society.
We are told to become a millionaire, we need to:
Go to an ivy league school,
Be in a high-flying and fast-growing industry,
Earn a high-paying income,
Or drop out and become an entrepreneur.
Now, I would be a fool to say none of these things matter. They certainly help and can increase the pace of becoming a millionaire. Plus they also make life a lot easier but they are not absolutely needed.
So then the question becomes, what is the disconnect between what we are told and how to actually become a millionaire?
The key to the success of each of these millionaires was in the way they spent their money. The survey pointed to five factors:
94% of participants said they lived on less than they made.
75% of participants never carried a credit card balance in their entire life.
93% of participants used coupons when shopping.
85% of participants used a list when shopping.
On average millionaires spent $200 or less at restaurants a month.
None of these things by themselves are necessarily groundbreaking. However, taken together they paint a clear picture of what it takes to succeed with money.
I love what Morgan Housel wrote in his book Psychology of Money:
“Saving money is the gap between your ego and your income, and wealth is what you don't see. So wealth is created by suppressing what you could buy today in order to have more stuff and more options in the future.”
The key to succeeding with money is not just making more money (although this helps tremendously). To be successful with money, you must be aware of what you are doing with it. As they say, it is not about how much you make but how much you keep.
This does not mean you do not spend money or enjoy life. However, it is spending money on the things that matter to you and doing it in the best way possible for you.
As Ramit Sethi says, "Spend extravagantly on the things you love, and cut costs mercilessly on the things you don't."
But to do this, you must eliminate your PRIDE and ignore the crowd.
Recommended Reads
Morgan Housel, my favorite writer and thinker, started a podcast.
Nick Magguilli, from Of Dollars and Data, always finds a way to blow my mind and make me so much more optimistic about the future.
*100,000 in 1990 is the same as $228,000 in 2023