What Makes A Millionaire?
97% of millionaires are home owners, and 50% of those have occupied the same home for more than 20 years.
What does the most common millionaire look like? He is 57 years-old, married to his first and only wife, and has three children.
What does the millionaire spouse look like? The spouses are typically "meticulous budgeters and planners and are more conservative that the millionaires are." The spouses are also most likely to be housewives. If they are employed they are most likely to be an elementary or high school teacher.
Most entrepreneurs live well below their means, and in fact, live so conservatively that if they make $200,000 in a year, they will most likely live off of $80,000 and invest the rest in an effort to accumulate more wealth.
By what means do they live frugally? They just don’t live extravagantly. Half won’t spend more than $400 on a suit, they also won’t spend more than $140 on a pair of shoes. They most likely haven’t bought a car in the last couple of years (if they did it’s probably used), and they are most likely driving an inexpensive domestic car.
What does all of this mean for you? It means that there is light at the end of the tunnel. Living frugally is not easy, in fact it’s hard, but as you can see from these that statistically the way to wealth is becoming an entrepreneur and living frugally. Most small businesses owners make less than $250,000 per year, but they live frugally enough that they live well and save a ton.
Hopefully this has served as a pat on the back for conservative living because it helps us see that there is long term gain from making your own meals, carpooling, owning a home, and consuming less.
Penny-Pinching Billionaires
Consider:
WARREN BUFFETT–Mr. Buffett still lives in the same home he bought in Omaha, Neb., in 1958 for $31,500. He drives a Cadillac, prefers burgers and Cherry Cokes to a pricey steak. When a waiter once tried to pour him some rare, vintage wine, Buffett covered his glass and said, "No thanks, I’ll take the cash."
AZIM PREMJI–The Indian tycoon who turned his dad’s cooking-oil business into Wipro is worth about $12.7 billion, but drove a Ford Escort for eight years before trading it in for a new Toyota Corolla. He usually walks to work from his nearby home. He stays at budget hotels when traveling in India and reportedly wears nonbranded suits and flies economy class. Paper plates were used at a luncheon in honor of his son Rishad’s wedding a few years ago.
INGVAR KAMPRAD – The Ikea founder, worth an estimated $31 billion, wears denim shirts and decorates his home with his company’s low-cost furnishings. He drives a 1993 Volvo.
"How the hell can I ask people who work for me to travel cheaply if I am traveling in luxury?" Kamprad asks. "Best to stay in touch with the real world."
Of course, many billionaires and multimillionaires will tell the press they are thrifty, though they have a Gulfstream G550 parked out back or a fourth home in St. Bart’s. I have been told countless times by the wealthy and their advisers that "most wealthy people live quietly and humbly" But in the new era of conscientious consumption and shrinking fortunes, more and more of today’s rich won’t have a choice. Thrift will become the new bling; the absence of status symbols will become the best status symbol of all.
Thrift hasn’t exactly been a celebrated virtue among the rich in recent years. The yacht-crazed Larry Ellison, party-hosting Stephen Schwarzman and the bigger-than-life Donald Trump got far more headlines than, say, John Caudwell, a British cellphone billionaire who cuts his own hair and buys suits off the rack.
"I don’t need Saville Row suits," he told a Forbes reporter last year. "I don’t need to spend money to bolster my own esteem."
Most wealthy people live quietly and humbly because billionaires don’t believe in symbols of status and they
don’t need to spend money to bolster their own esteem
