Everybody wants to become a millionaire. Unfortunately, not everybody’s chances of becoming a millionaire are the same, partially because the playing field is not even. This article looks at historical data on your chances of becoming a millionaire by race, age, and education.
Getting to at least one million dollars in net worth is a nice milestone to achieve. However, due to inflation, you need more than $3 million to live the traditional millionaire lifestyle today.
Thankfully, I firmly believe the majority of people reading Financial Samurai and other personal finance sites will be able to achieve millionaire status.
Becoming A Millionaire Is Easier If You Love Personal Finance
If I were to guess the exact percentage of Financial Samurai readers who become millionaires in their lifetimes, I would say 65 percent. This doesn’t seem like a particularly high percentage. But once you’ve read the statistics below, you’ll come to agree that 65 percent is a home run figure.
For the remaining 35 percent, even if you don’t become millionaires, you’ll likely still build way more wealth if you keep on reading Financial Samurai and other finance sites than the average person who does not.
Since 2009 I’ve received dozens of e-mails from readers saying they’ve busted through the $1 million net worth figure thanks to aggressive saving and investing. Many have mentioned they wish they had discovered the personal finance world sooner. But better late than never I say!
So what about the rest of the 330+ million Americans who were fortunate enough to be born or gain citizenship to our great country? What are their chances of living the champagne dream and caviar lifestyle? Let’s have a look.
How Many Millionaires Are There In America?
Before learning about your chances of becoming a millionaire, let’s find out roughly how many millionaires there are in America.
According to Spectrem Group’s Market Insights Report, in 2021, there were roughly 9.8 million individuals with a net worth between $1 million and $5 million. There were 1.8 million individuals with net worth between $5 million and $25 million. Finally, 156,000 households (not individuals) had more than $25 million in net worth.
In other words, there are roughly 11.8 million millionaires in America, making up roughly 3.5% of the population in 2021. This count is at a record high thanks to a long bull market in stocks, bonds, and real estate.
According to Credit Suisse’s latest Global Wealth Report, they estimate there are actually 22 million millionaires in America. That’s an impressive 6.5% of the population. Whatever the true millionaire count is, there are millions of millionaires and growing!
With stocks, real estate, and other risk-assets continuing to do well, the number of millionaires is likely even higher in 2023. Further, I suspect the actual millionaire number is higher due to stealth wealth and plenty of unreported or underreported assets. It’s easy to obfuscate the value of your own private business.
Now let’s look at three insightful charts based on Federal Reserve data that shows your chances of becoming a millionaire by education, age, and race.
Your Chances Of Becoming A Millionaire By Educational Attainment
The chart says that the more education you receive, the higher your chances of becoming a millionaire across all races.
This makes sense since high-paying jobs often require higher levels of education e.g. lawyer, doctor, executive management, and scientist. However, thanks to free online learning and shorter specialty school programs, a college degree is slowly getting devalued.
Chances Of Becoming A Millionaire With A High School Degree By Race
- Asians 6%
- White 5%
- Hispanic 2%
- Black 1%
Without a high school degree, you practically have no chance of becoming a millionaire across all races.
Chances Of Becoming A Millionaire With An Associate’s Degree By Race
- Asians 3%
- White 7%
- Hispanic 2%
- Black 1%
For Asians, your chances of becoming a millionaire are actually higher if you only have a high school degree versus an Associate’s degree (6% vs 3%). Perhaps this is due to the prevalence of more Asian small business owners.
If you are Hispanic or Black, the percentage probability of becoming a millionaire does not change if you have a high school degree or an Associate’s degree.
Chances Of Becoming A Millionaire With A Bachelor’s Degree By Race
- Asians 16%
- White 18%
- Hispanic 4%
- Black 3%
If you are Hispanic or Black, this data should make you very wary of getting into student loan debt. Please apply for as many scholarships and grants as possible to minimize the cost of attending college.
If you are Asian or White, getting a college degree significantly increases your odds of becoming a millionaire.
Chances Of Becoming A Millionaire With A Master’s Degree By Race
- Asians 27%
- White 38%
- Hispanic 11%
- Black 6%
By the time someone has a Master’s degree, chances of becoming a millionaire should be similar across all races. However, the difference between the percentages between White (38%) and Black (6%) is striking.
If I was a White person, a Master’s degree is exactly what I’d get. Maybe just not a Master’s degree in History or Journalism if you want to become a millionaire.
Unless Hispanic and Black people are getting a Master’s degrees in mostly low-paying fields, the huge percentage discrepancy seems too egregious. Put it differently, the chance of a Black person with a Master’s degree becoming a millionaire is the same as an Asian person with only a high school degree.
The Master’s degree percentage discrepancy between Whites and Blacks is the strongest evidence of systemic racism. I’m not talking about one person hurling a racial slur at another person.
I’m talking about things like a private club, where it was originally 100% Whites only 70 years ago. Today, the club says it is open to all races. But to get in, you need to get five letters of recommendation from existing members. If you are a minority, you will have a harder time getting this support network together.
You see the same thing happening when applying for preschools, private schools, high-paying jobs, and so forth.
People Tend To Take Care Of Their Own
To explain why this huge difference exists, my theory is that people tend to take care of people who are most similar to themselves.
Thus, if the majority of people in power are White, then more Whites will benefit at the expense of other races. Therefore, the chances of being a millionaire is higher if you are White and lower if you are a minority.
When I was working in Asian Equities, the head guy based in Hong Kong was a White English chap. To nobody’s surprise, he appointed White English heads at our offices in London and New York.
When the head English guy left, a Korean guy became the boss. The English heads in London and New York got laid off, and in came two Koreans to head the respective offices.
I bet if your new boss came from Tasmania, you would suddenly see a lot more Tasmanian lieutenants. If your new boss was a woman, you’ll likely have more female colleagues.
Despite over 13 years of online writing experience, there is probably little chance I could land a job at the Huffington Post given I’m male and Asian. The reality is, I probably wouldn’t even try to apply there based on the lack of diversity. Therefore, if a company wants to recruit a diverse group of employees, there needs to be diverse representation. Nobody wants to feel like the odd person out.
I don’t think most people are intentionally racist. I just think that most people tend to hang out with and help people who have similar backgrounds. Just look around your social group and in your workplace.
Related: Three White Tenants, One Asian Landlord
Your Chances Of Being A Millionaire By Age
The older you are, the greater your chances of becoming a millionaire. This is obvious thanks to compound returns. The earlier you can start investing, the better. Most of Warren Buffet’s wealth came after his 60th birthday.
Everybody’s chances of becoming a millionaire improves up until the age of 61. But after 61, the chances for Hispanics and Blacks to become millionaires declines.
It’s interesting to note the slopes for Asians and Whites are much steeper. Asians and Whites have significantly higher chances of becoming millionaires as they age likely due to a higher representation of Asians and Whites in higher-paying industries.
Another hypothesis is that Asians and Whites make up a greater representation of investors in stocks, bonds, and real estate at all ages. Given investments don’t differentiate between races, investments tend to keep appreciating after the age of 61.
Equal Opportunity Is The Goal
The slope differences between races means there is different levels of opportunity. Therefore, there’s been such a huge rally cry for Hispanic and Black diversity in many industries.
Equal opportunity is really all we can really ask for. The rest of our success depends on work ethic, skills, and lots of luck.
The call for diversity is particularly strong in Tech and Finance, two of the more higher-paying industries.
If you were able to join Apple as a 22-year-old 10 years ago, you’d mostly likely be a multi-millionaire by now. But look at the gender and race representation of Apple in the chart below. It looks quite similar across all the big tech companies.
However, I’ve also noticed there’s not much of an uproar in industries that traditionally pay less.
For example, there has been no call for diversity in grade school teaching where the vast majority of teachers are female (~76%). There has also been no call for diversity in the military, where the broad majority of service people are male (~84%).
Hopefully, those who fight for diversity are also willing to fight for diversity across the board, not just at places that pay the most money. Equal opportunity is good. Equal outcome is impossible.
It’s a little sad that merit-based reward is declining. But I understand the reason why. What chance does a poor kid have of competing against a rich kid with all the resources? It’s hard.
Your Overall Chances Of Becoming A Millionaire By Race
- Asian 22.3%
- White 21.5%
- Hispanic 6.8%
- Black 6.4%
Putting everything together, the Fed data says Asians have the highest probability of becoming millionaires. This is interesting since Asians are the smallest minority, representing roughly ~6% of the American population.
Like other minorities, Asians still face discrimination. Further, it seems that test score requirements are higher for Asians to have the same chance of admittance at certain colleges.
On the flip side, perhaps it is easier to mobilize a smaller population to heavily invest in their future. Singapore and its 5.6 million population is an example. Singapore has a per capita GDP of $53,000. Now compare the difficulty of mobilizing 1.5 billion people in China with a per capita GDP of only $8,200.
Finally, U.S. immigration policy may have something to do with giving Asian Americans a head start. In 1992, Congress created the Immigrant Investor Program to stimulate the US economy and promote job growth.
If you and your family can invest $500,000 in an overseas commercial venture, it’s highly probable that you are already a millionaire. Thus, given the relatively small base of the Asian-American population, it may be fair to ascribe a small portion of Asian millionaires to this cohort group.
However, I also know of several Asian families who escaped difficult government regimes and arrived in America with absolutely nothing. Therefore, it’s hard to generalize, since there are many different types of Asians.
Finally, perhaps there is a cultural reason due to the intense focus on education in many Asian cultures. Here are some personal insights into Asian wealth and income.
Do You Like Your Odds Of Becoming A Millionaire?
The odds of becoming a millionaire in America are between 6.4% to 22.3% according to data from the Federal Reserve Board’s Survey of Consumer Finances.
I’d gladly take those odds over trying to become a millionaire in any other country. I bet the odds of becoming a millionaire in Zambia, where I lived for one year, is less than 1%. Zambia’s GDP per capita is only $3,900, or 1/9th the GDP per capita in the US.
But returning to my original thesis, I believe that around 60 percent of you who consistently read personal finance sites will become millionaires in your lifetime. You will naturally take action to boost your wealth with a positive money-mindset.
60 percent didn’t sound like much in the intro, but now you know that 60 percent is 2.72X higher than the highest chance anybody has of becoming a millionaire in America.
How To Increase Your Chances Of Becoming A Millionaire
One of the biggest goals on Financial Samurai is to help people of all races become financially independent sooner, rather than later. With interest rates so low and future investment returns likely going down, financial independence often requires becoming a millionaire.
Put it this way, $1 million only generates about $5,000 – $17,000 a year in risk-free income. The reason why is the 10-year bond yield is around 1.7% and the best money market savings rate is now only about 0.5%. As a result, investors are being pushed to take on more risk for higher returns.
Here are my recommendations for how to increase your chances of becoming a millionaire:
1) Read personal finance sites every day.
Personal finance sites do a lot of things, but most of all, they make you pay attention to your finances.
As soon as you have heightened awareness about how much you are saving, what you are investing in, your net worth asset allocation, and your retirement plan, it’s only natural to generate more wealth than the typical person who is financially unaware.
Personal finance sites are often like free financial coaches, pushing you to continue instead of giving up. When you see someone day in and day out work on their finances, you can’t help but want to improve your finances as well.
In addition to reading personal finance sites every day, read as many finance-related books by people who are multi-millionaires. You don’t have to reinvent the wheel. You simply have to follow the guidance of those who’ve been there before.
Not only should you subscribe to my free weekly newsletter, you should also subscribe and listen to my podcast on Apple, Google, and Spotify.
2) Run the numbers.
Becoming a millionaire is a function of income, savings rate, investment returns, and time. Therefore, you can easily run various financial scenarios that will make you a millionaire. Here are some examples:
- Put away $350 a month and earn 6% a year, you will become a millionaire in 46 years.
- Max out your 401k and earn 7.5% a year, you will become a millionaire in 22 years.
- Max out your 401k and invest another $1,000 in after-tax proceeds a month, you will become a millionaire in just 17 years if you earn 7.5% a year.
Religiously track your net worth in order to optimize your finances. You don’t want to wake up 20 years from now and wonder where all your money went.
3) Do what the average person won’t do to become a millionaire.
Obviously, if you want to become a millionaire sooner, you’re going to have to do things the average person won’t do. Here are some examples:
- If the average person works 40 hours a week, try working 60 hours a week to see if you can get paid and promoted faster.
- Try to create multiple income streams instead of just having one income stream, which is typical of the average person.
- If the average person only invests in index funds, try to invest 10%-20% of your stock allocation in individual stocks. Your overall portfolio might underperform, but at least you’ll have a chance of outperforming.
- If the average person wakes up at 7 am, try waking up at 5 am for a year to work on your side hustle. Maybe an extra 730 hours a year will make you more productive.
4) Get motivated by the statistics and don’t quit too soon.
What’s annoying about statistics is that they can discourage you from trying. However, one of the core principles of Financial Samurai is to never fail due to a lack of effort because effort requires no skill.
If you don’t like your millionaire odds, change them!
Do not settle for what the data says about your chances. In fact, the lower your percentage chance of becoming a millionaire according to the Fed, the more motivated you should be to beat the odds. Once you do, it will be all the more gratifying.
One of the keys to building great wealth is not giving up. If you can try consistently for at least 10 years, I’m positive you are going to dramatically improve your odds.
5) Work in the highest paying industries.
If you want to be a millionaire, then you might as well seek employment opportunities in the highest-paying industries. These industries include finance, tech, medicine, law, strategy consulting, and entrepreneurship.
Generating a high income makes becoming a millionaire much easier. That said, you still have to have the discipline to save a good portion of your money. There are plenty of high income earners who end up broke due to poor financial habits.
6) Invest in the least diverse companies.
Let’s say you can’t join a fast-growing company no matter how hard you try. You also don’t think the company will ever change its homogenous workforce. Instead of getting left behind, if it is publicly traded, consider investing in the company.
This way, you get to participate in the company’s growth and have its homogenous workforce work for you!
Come up with a list of the least diverse publicly traded companies. Compare their diversity report card from five years ago and today. If not much has changed, you might be onto something.
Companies love to talk about diversity & inclusion, but it’s really hard to change established culture. If you can skillfully recognize human biases, you can increase your chances of becoming a millionaire.
7) Build your social network of highly motivated people.
Your parents were right. If you want to have a greater chance of success, whatever that means to you, you should probably hang out with people you think are going places. This includes marrying the right person.
Let your friends challenge you to do more. Over time, your friends will naturally become wealthier and more successful. If they are your true friends, they will want to bring you up along with them. If you are their true friend, you will do the same.
Your good friends will invite you to participate in various promising private investments. They will shoot you more enticing job leads. Some will make customer introductions. Others will help your children get ahead. The more true friends you have, the less lonely you will be.
Welcome to the world of how things have worked for centuries! Your network is your net worth. The key is to be a genuine person who is always looking to help first. No matter your race or gender, this type of attitude will build you a great network. The stronger your network, the higher your chances of becoming a millionaire if that is what you want.
8) Don’t rent for life.
Although it’s a nice thought to rent and invest the difference each month, most renters don’t end up regularly doing so. The return on rent is always -100%.
Every month you get a place to stay with you rent money. However, you don’t build any equity or have a chance to build equity. In 30 years, a renter is guaranteed to be left with no real estate equity. Whereas a homeowner, if he regularly pays his mortgage, will end up owning the house free and clear.
In the Federal Reserve’s 2019 Survey of Consumer Finances, it was revealed that the median net worth of homeowners was $231,400. Renters had a net worth of just $5,000. In other words, the typical homeowner had a net worth 46X greater than the typical renter.
We can argue until the cows come home why there is such a stark difference. However, just know that over the long term, you want to benefit from inflation and not get hurt from inflation.
Related: Mortgage Interest Rates By Race
At Least Get Neutral Real Estate
As soon as you find a place where you see yourself comfortably living for 5-10 years, get neutral real estate by owning your primary residence. Obviously, make sure you can afford your purchase. One home buying rule I suggest everyone follow is the 30/30/3 rule.
Over time, you will see a widening spread between the cost to rent and the cost to own due to inflation and largely fixed costs of owning a home. During this time period, you’ll also be paying down principal and building equity. If the home also appreciates in value, you will have a nice tailwind towards millionaire status.
If you can’t afford to buy a physical property, then you can still participate in real estate’s rise by buying a publicly-traded REIT, like VNQ. Or, you can invest in real estate crowdfunding, like I have done after selling my physical rental property in 2017.
The rental property was too much of a pain to manage as a new father, so I sold it and reinvested $550,000 of the proceeds in crowdfunding. My favorite real estate platform is Fundrise. It has innovative private eFunds that contain a diversified portfolio of income-producing real estate investments across the country.
Best Real Estate Investing Platforms
Earning money 100% passively through real estate is my favorite way. Fundrise is free to sign up and explore and is my favorite platform. The platform manages over $1 billion in assets for over 150,000 investors. Investing in a fund is an efficient way to gain real estate exposure.
If you are an accredited investor and want to invest in individual real estate opportunities, check out CrowdStreet. CrowdStreet focuses on properties in 18-hour cities where valuations are lower and growth rates tend to be higher. CrowdStreet occasionally offers speciality funds as well, like a recent Build-to-Rent fund to take advantage of rising rents.
I’ve personally invested $810,000 in real estate crowdfunding to diversify my investments and earn income passively. Real estate is my favorite way for average Americans to build wealth as we recover from the pandemic.
9) Participate in the new “permissionless” society.
There are people making big money every day without the prerequisite traditional credentials. For example, you no longer need a fancy degree to get a job in tech. You just need to know your tech.
In the personal finance world, there are some very successful bloggers who are doctors, journalists, engineers, cooks, and school teachers. Most do not have a finance background. All they did was start a site and get creative.
You don’t need radio experience to start a podcast. Neither do you need broadcasting or acting experience to start a YouTube channel. Anybody can start a podcast or a YouTube channel.
Tech and the internet have created a wonderful permissionless society for historically marginalized groups. If you have kids, please teach them everything you can about the permissionless society. There are no gatekeepers.
10) Read The Best Selling Personal Finance Book
If you want to dramatically improve your chances of becoming a millionaire, purchase a hard copy of my new Wall Street Journal bestseller, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. The book is jam packed with unique strategies to help you build your fortune while living your best life.
Buy This, Not That is also a #1 best seller on Amazon, where it’s on sale. By the time you finish BTNT you will gain at least 100X more value than its cost.
After spending 30 years working in finance, writing about finance, and studying finance, I’m certain Buy This, Not That will help you create more wealth and purpose. Becoming a millionaire is within your reach with the proper education.
You Are The Inevitable Millionaire
In an ideal world, it would be wonderful if everybody could have an equal chance to become a millionaire by race, by age, and by educational achievement. Unfortunately, the system is rigged by the people already in power who naturally take care of their own.
It’s up to all of us to proactively enrich our minds with knowledge that can help us grow our wealth, regardless of circumstance.
Believe that becoming a millionaire is highly possible in your lifetime. And once you feel you’re on track to get to $1 million, you might as well shoot for $3 million due to inflation.
If you keep grinding long enough, maybe you might get to a top 1% net worth of $10 million! Once you get to a net worth of $10 million, you’ll be able to easily generate $250,000+ in passive income in a low-risk way.
Money does buy happiness because it helps you feel less stressed about money, especially during difficult times. Once you have enough money, make sure you do your best to preserve your capital. The last thing you want to do is go backward!
Loading ...Readers, what do you think about the various chances of becoming a millionaire? Why do you think there is such a massive discrepancy in percentage chance for White and Black Americans with Master’s degrees? Any more suggestions on how to increase your chances of becoming a millionaire?
About the Author
Sam worked in finance for 13 years. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. In 2012, Sam was able to retire at the age of 34 largely due to his investments that cover his desired lifestyle. He became a millionaire at 28 through aggressive saving, investing, and luck.
He spends time playing tennis, taking care of his family, and writing online to help others achieve financial freedom too.He started Financial Samurai in 2009 and has grown it to be one of the largest independently owned personal finance sites in the world with over 1 million organic visitors a month.
You can subscribe to his free weekly newsletter where he shares more tips about becoming a millionaire.
Well, I’m a Hispanic male. I’m already 30, and I have failed at everything I’ve ever done. My chances of actually becoming successful are effectively 0.
I keep trying to think of a reason not to just end it, but I can’t. Unless you’re successful, rich, high status, life just isn’t worth living as a man.
Should losers just kill ourselves? As far as I can tell, the logical answer is, “yes.”
I think you are obviously talking about race way more kindily than gender because you are a man. But make no mistake, it would be great if we all had the same chance of becoming a millionaire regardless of race, gender or age.
Recognise that gender is a a considerable factor in your chances to become a millionaire. And yes, feminists fight for women and men to be represented more equally in the military and in schools and in all places of work. Why did you not make a snarky remark at the end of your paragraph about race like you did for gender?
Two observations. 1) A lot of “soft” masters degrees out there. Need to control in terms of what “Masters” degrees are being secured by race. Humanities and Social Sciences vs Physical Sciences, Mathematics, Engineering, or Business degrees Etc. This will make a big difference in long term economic outcomes. 2) Imbedded in the “White” category is a sub-group, “Jewish”, that are highly represented in professionals, scientists, entrepreneurs and the wealthy. Also, there are other groups often categorized as White that are not European and are more educated and successful in the US than the average American. Basically, need more specificity in terms of which “Whites” we are talking about for accurate comparisons.
Lastly, this has been covered, but article undercounts potential millionaires, any defined benefit pension that exceeds $50k per annum will capitalize to a million dollars in value at a return rate of 5%. Ethnic minorities are highly represented in public sector. In California, a typical police officer or fireman without a “Masters” can retire at 3% x avg of last 3 years annual salary x years of service at age 50 plus med and annual CPI increases. Average salary for a police officer is $100k. So, an officer who started at 25 can walk out the door at 50 with $75k per year, plus CPI increases plus medical. The officer would need $1.5 mil + in safe investments to match. The same basic analysis goes for any public sector employee from teacher to secretary to custodian. They would have to work longer; but easily doable. Add, social security on top if they paid into it and the universe of real “millionaires” widens. Of course, a million ain’t what it used to be.
I am white and have a net worth of 3 million. I personally consider net worth to only be stocks or mutual funds. This is easy to turn into liquid cash.
Asians have a strong work ethic and are very intelligent. I don’t want to hire anybody who thinks the world owes them something.
This unfounded selective hostility on display here is why Black Americans like me need twice the amount of diligence and consistent excellence to achieve half the wealth of people who blend in with the Anglo Saxon legacy of destruction.
That’s racist. What percent of all Asians do you actually know? They are no more intelligent than any other ethnicity. That’s a simple fact. Even the tests showing higher scores from places like China are skewed, because they only allow the top 15% or less to progress to the next school level. The rest go home with little education. Assuming all Asians are hard working and intelligent is harmful to the ones that don’t fit that stereotype. Kind of like the stereotype that all white people must be rich. Most are really not… and, they have every excuse in the world for why they are poor in spite of having a leg up on the rest of the world.
Personally, I’m mixed with black and white, and both of my parents were work-a-holics when I was little. My net worth is in the 95th percentile for my age range. Far higher than theirs combined. My intelligence is high enough to have gotten to where I am on my own. While I have no problem being a work-a-holic on my own time and for my own investments, it’s certainly not required to become wealthy or be a great employee.
That being said, aside from the harmful racist comments from you, entitled employees are an issue these days. It has nothing to do with ethnicity though.
It must be argued that net worth really should include ALL assets. A person with a net worth of 100 million, with all of that wealth placed into rental buildings, generates far more income than you and is worth far more as well. Their wealth is in no way lessened by their money not being liquid. Why would they need it to be? They will also pay far less in taxes when liquidating their properties than you will liquidating your investments… That same person worth 100 million may only need a small amount to live on and just keep reinvesting the rest.
The wealthiest guy I know lives in a smaller house than I do. His only splurges are his car, bathroom, sailboat, and the new very big sail boat he just bought at 60. Everything else is super simple and cheap. His net worth is at least 4 times yours. That’s just the assets I know of enough to value. No clue what’s in his stock portfolio, I just know he has one, so his worth could be far more than that. I guarantee he doesn’t need to be able to quickly liquidate investments for any reason.
Wouldn’t having the need to quickly liquidate investments mean that someone is not doing very well? Kind of a red flag.
I’m also curious, how old are you? What area do you live in? 3 million in a place like California might as well be 500k in the Midwest…
Luis, I see your concern. However, I’m confused to where you came up with the idea of “diversification of phenotypes”? he never mentioned phenotypes in his post, and I’m pretty sure that this article has nothing to do with biology. If you’re concerned about the statistics that he talked about, those are facets of reality that he gathered from government sources. Unfortunately, as generalized as the data is (i personally wish they had more comprehensive data that included race and ethnic subcultures ) it’s really the only information we have , and it is what it is.
I see that this topic on race and wealth has really touched on some negative emotions that make you uncomfortable on the topics of race and social inequity, and I can relate. But I question where you got the idea that FinSam was classifying Asians, and how you came to the conclusion that it’s “disgusting”. He never once mentioned he was classifying Asians as anything other than people of color. I want to emphasize that he was literally spitting facts from government sources on different race categorizations, and explaining hypothesis that connect human social behavior and real life financial outcomes for certain groups; he even gave some practical tips on how to manage these realities. I ask you to re-read his article and cite where you derived your conclusions about “phenotypes” “asians as non-colored people” “what is this silly concept of people of color vs people of non color”, and show the rest of us so we can get woked.
I applaud Financial Samurai for even attacking the issue in a pretty balanced and realistic manner, albeit the topic can be very uncomfortable for some (as yourself). In fact, Financial Samurai even argued and acknowledged the systemic racism plagues our system.
But as a person of color myself, I urge you to see the reality not as an attack to people of color, or a reclassification of who is and who isn’t a person of color, but more of a battlefield assessment of what certain people who belong to certain groups are up against. Life isn’t fair. Sorry Luis.
“Believe that becoming a millionaire is highly possible in your lifetime. And once you feel you’re on track to get to $1 million, you might as well shoot for $3 million due to inflation.”
This really resonated with me as I’m getting closer and closer to the $1M mark and what once seemed like a far away pipedream is now quickly becoming reality. Might as well shoot for the moon once that milestone gets reached.
Appreciate the content!
As a person of color…To classify Asians as if they aren’t people of color is disgusting. You claim the outcome to be the diversification of phenotypes, when both Hispanics, Black’s, and Asians have the same level of diversity in context to phenotypes. Asians from Laotian to N/ Indian have the same diversification of phenotypes as Hispanics and Blacks. Yet the outcome between them is different when it comes to salary. To never consider the difference in culter between the diversification of phenotypes as a key factor for the outcome is misleading and devalues Asians as people of color(which they are). It isn’t the diversification of phenotypes that determines the outcome, it’s the culter.
Hi Luis – I’m not sure how you came to your conclusion after reading this post. Can you explain further what you mean by phenotypes and “culture”? It’s clear Asians are a minority (6% of the U.S. population) and are considered people of color.
You may enjoy these posts:
Three White Tenants, One Asian Landlord: A Story About Opportunity
Income By Race: Why Is Asian Income So High?
Luis, I see your concern. However, I’m confused to where you came up with the idea of “diversification of phenotypes”? he never mentioned phenotypes in his post, and I’m pretty sure that this article has nothing to do with biology. If you’re concerned about the statistics that he talked about, those are facets of reality that he gathered from government sources. Unfortunately, as generalized as the data is (i personally wish they had more comprehensive data that included race and ethnic subcultures ) it’s really the only information we have , and it is what it is.
I see that this topic on race and wealth has really touched on some negative emotions that make you uncomfortable on the topics of race and social inequity, and I can relate. But I question where you got the idea that FinSam was classifying Asians, and how you came to the conclusion that it’s “disgusting”. He never once mentioned he was classifying Asians as anything other than people of color. I want to emphasize that he was literally spitting facts from government sources on different race categorizations, and explaining hypothesis that connect human social behavior and real life financial outcomes for certain groups; he even gave some practical tips on how to manage these realities. I ask you to re-read his article and cite where you derived your conclusions about “phenotypes” “asians as non-colored people” “what is this silly concept of people of color vs people of non color”, and show the rest of us so we can get woked.
I applaud Financial Samurai for even attacking the issue in a pretty balanced and realistic manner, albeit the topic can be very uncomfortable for some (as yourself). In fact, Financial Samurai even argued and acknowledged the systemic racism plagues our system.
But as a person of color myself, I urge you to see the reality not as an attack to people of color, or a reclassification of who is and who isn’t a person of color, but more of a battlefield assessment of what certain people who belong to certain groups are up against. Life isn’t fair. Sorry Luis.
This article is one opinion, but I personally have another. I think wealth has more to do with personal choices than “systemic” issues. Work ethic, degree selection, avoiding having kids out of wedlock, living below your means, etc. I see this everyday. Over the course of an average 40 year working career, a mere $160 a month invested in the S&P 500 can make you a millionaire! There is no secret club involved. I became a millionaire mostly through my military service because I maxed out an IRA most years.
I’m sure you can draw some wage inequality conclusions based on whether you’re an extrovert or introvert, but that doesn’t mean there are ominous forces at play. What they really need is more personal finance education in high school!
The beauty of this article is it’s simplicity. It uses an objective standard, i.e. education level and applies it evenly to all demo groups. In other words, all things ‘being equal’ the group outcomes should be about the same. Not exact but reasonably similar. The fact they are not, and in the case of Black Americans hugely so, suggests there is something else impacting the low numbers. If you do not believe it is something systemic in the environment that hinders potential for certain groups – the article believes it to be unequal opportunity – then the alternative is to suggest that the deficient group ‘collectively’ and the individuals in it are deficient as a whole.. If you believe the latter then, your beliefs are – objectively – racist. Numbers are not. They are an indicator that invites us to look deeper into cause and effect. Modern investigations into this subject of ‘who-makes-money-and-who-does-not’, come to the same conclusion as this article does, i.e., that the single biggest factor in accumulating wealth (being successful?) is NOT intelligence, hard work or even formal education but instead ‘opportunity’… who you know… who supports you… who gives you a chance. Nobody makes millions by themselves and there aren’t enough hours in a lifetime for any ONE person to EARN billions. P.s Financial education in schools, Yes. Quality education for ALL – absolutely! Healthy kids? Good nutrition? Present parents? A good night’s sleep? Living wage? Quality after-school care? A society that puts ALL kids first? ALL systemic, opportunities that do not exist in many American communities.
This is an interesting article. I am South American Asian, meaning Hispanic of Asian of origin and I came to the US as a teenager to study. My parents helped pay for school as a foreign student but not much beyond that. I did my share of low-paying, back-breaking types of jobs but my economic situation improved substantially once I got my degree from a State University. I went into professional sales for the corporate world for about 5 years before the tech crash in 2000 wiped out all my savings, options, etc. Tired of working for others, I started my online business and now 21 years later, I am comfortably in the top 1% in income and assets. Looking around at my friends, which are a large variety of people from different backgrounds, the one thing that makes the difference in personal economic progress is the ability to “hustle”, which comes from their cultural background or how they were raised. Education in itself and work ethic help a lot but on their own, but they won’t make people very rich unless they luck out by getting stock options in a very successful start-up. The couple of friends that I know are multimillionaires, one is an Israeli guy who taught me how to clean carpets in my college days and not owns a fairly large import company. The other is an Asian guy who grew up poor, got a degree, and end up opening a chain of dozens of restaurants. The more educated people that I know, most are ok but some still struggle at mid-life. People keep talking about racism, the glass ceiling, etc. and I am sure they are valid but culture definitely plays a much bigger role in one’s chances to succeed in this economy. And while I think awareness of these structural problems is important, I am afraid they can also be used as excuses to not succeed. Basically, giving up before they even got started.
Yes sir. Hustling is what will get you wealthy, and probably sooner compared to a 401k. I’m not there yet but I started a little cleaning company after I dropped out of college. It did ok. Closed it when the pandemic started.
But because of that, I was forced to learn how to make websites and digital marketing. I currently work in the dental field doing digital marketing for dental offices and dental assisting schools. No college degree.
I could get paid 60-70k pretty easily, without a degree. With more experience I could earn more.
But currently I’m looking into getting my own clients and exploring other avenues where my skills can come in handy.
The internet and drive are great tools to get ahead. You just have to motivate yourself to do the work.
People may be racist, sure. But money and business are not.
I actually agree with you. My childhood was an odd one. I’m half black and half white. Both parents were well off when I was little. I lived in nice, white neighborhoods, went to a private school, etc. Then, my mom got hit with tax evasion, and we ended up homeless and living on the good will of other people. For awhile, we lived in a predominately black, ghetto part of the U.S. While there are some systemic issues holding back minorities, they can be worked around by becoming wealthy outside of the main system of seeking employment at white owned companies. Such as self employment and opening a business. Most of the issues within the black community start at home.
The education was fine. So many people think that’s the issue, but it’s really not. Having been to 19 schools in 3 states between kindergarten and the 12th grade, the education was normal. Florida was a bit behind, but that was a wealthy white neighborhood’s school.
The families were a major issue. Behavioral issues were not addressed properly by schools or families. Abuse and drug use are major issues within the community. Priorities were completely out of whack. A child must be abused, dragged to church, and then thrown out in the streets to raise itself… That’s not going to end well. Even I got into trouble with that being the norm.
Children are constantly told they are limited by all adults in the community. You’re black so people will hold you back. You’re black so beware. You’re black, they won’t let you succeed. You’re black, no one cares about you. You’re black, so everything will be harder. But, most of that was not true. If anything, the fear instilled into children did more damage than the real world will. I was lucky, I was clearly more intelligent than most of my peers, and I was lighter skinned. So, people constantly told me nicer things like how pretty I am and how I have a chance to do big things. My peers didn’t get that positivity. No one even told me how to do big things. No one knew how. There’s no blueprint handed out or down in the black communities. I see improvement in this area now with teaching trucking and real estate investing. But, those are new.
College was made to seem MONUMENTAL. Like you needed a miracle to have even a slight chance. When I was dating my husband, he’d been taught it was so easy and just a thing you did like taking out the trash. I thought he must be crazy to think it’s so easy. Then, I jumped online to apply for our local college thinking there was no chance. By the next morning I was accepted and enrolled… We were never taught it was that easy! Children from other cultures are.
There were no good role models to show us any other way to live. Perhaps, the main reason why I succeeded in life was due to having opportunities to see how others lived. When my mother hung wallpaper, we were in all sorts of houses and communities dealing with people of all backgrounds. I always knew there were many other ways to live, I just didn’t know how to get to them. Other children are not so lucky.
So, I teach my children that life is as easy or hard as you make it. I make impossible things happen every day, because we no longer trust anyone else telling us things are too hard or can’t be done. We will teach anyone about investing and how to get through life easier if they are willing to listen. But, it’s like Plato’s Allegory of the Cave. Everyone living in their own delusional bubble, and heaven forbid you be the one to tell them there’s anyone outside of it… But, people should all be taught and given the option to choose something else in life and how to get there.