Is Becoming A Millionaire The Rule Rather Than The Exception?
Dr. Thomas J. Stanley wrote a great book called “The Millionaire Next Door” where he surveyed a bunch of millionaires who are pretty simple, everyday people. The next door millionaires drove second hand cars, shopped at Walmart, and lived in sub-$500,000 houses which were of course, all paid for. Part of the reason why Dr. Stanley’s book is such a big hit is because he appeals to a mass audience and shows us we can all be millionaires because there’s nothing really special about them!
Hence, like getting your college degree, is becoming a millionaire by the time you retire fast becoming a rule rather than the exception? The answer is “yes” if you ask Dr. Stanley and all the next door millionaires. In fact, they are probably all shaking their heads at those who can’t get there because it’s so easy for them. However, success skews reality. If you’re rich, you think everybody is rich or should be rich.
SO EASY, EVEN A KNUCKLEHEAD CAN DO IT!
People are fooling themselves if they think only 6%-9% of all households have a net worth of more than $1 million in America. The data only tracks what is reported and plenty of wealthy people do not report the full extent of their assets. As such, I’d venture to guess the percentage of households with at least a net worth of $1 million is more than double the stated levels.
Someone who makes $60,000 a year on average for 30 years earns $1.8 million in gross income in his or her lifetime. Save just 20% of $1.8 million, or $360,000, and let that money compound at 4% leads to well over a million dollars. Look at the lower right hand side of this site and you can see the income breakdown of 400 submissions. It’s clear more than 6-9% make over $85,000/year. In fact, over 40% of the participants make over $85,000 a year, which means after 30 years, the individual has raked in at least $2,550,000! It would take a big time knucklehead to not be able to accumulate over a million dollars by age 60.
TIME + SAVINGS + WORK + READING FINANCIAL SAMURAI DAILY = $$$
There is more wealth out there than you can ever imagine. Right here in San Francisco, 450 workers make over $100,000 a year just from their pensions! That’s just the public sector. If you look at those working at Apple, Google, Yahoo, Facebook, Groupon, LinkedIn, Zynga and eBay, you can pretty much guarantee that a large majority of them will retire millionaires if they aren’t millionaires already.
Let’s not even mention all the doctors, lawyers, venture capitalists, bankers, consultants, firefighters, policemen, and trust fund babies who make tremendous sums of money. You don’t have to make six figures to get to a million dollars+ in net worth. You just need to read this site everyday for the next 10-20 years and you’ll be fine!
There is plenty of money running around so why shouldn’t we all have at least a million bucks by the time we are 50, 60, 65 or whenever we want to retire? We all should!
As someone once said, “Don’t share the wealth. Go out and get your own!”
Recommendation To Build Wealth
The best thing you can do to achieve financial freedom is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to track my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing and when my CDs are expiring. I can also see how much I’m spending a month and adjust accordingly. Personal Capital even tracks my net worth progression so I don’t have to. There is no better free platform on the market that has helped me more than Personal Capital. What’s more, it takes less than a minute to sign up.
Photo: Condo with pool in Santorini by Sam.
Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”