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Is Becoming A Millionaire The Rule Rather Than The Exception?

Updated: 02/19/2021 by Financial Samurai 67 Comments

Are you wondering whether becoming a millionaire is the rule rather than the exception? Thanks to inflation and positive returns in the stock market and real estate market, it seems like many more people will become millionaires in their lifetimes. In fact, $3 million is the new $1 million today if you want to be a real millionaire.

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. It 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.

Becoming A Millionaire Is Becoming More The Rule

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. There are more than 18.6 million households with a net worth of more than a million dollars in America today.

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. 

Becoming a millionaire just takes discipline, time, and patience. In fact, if you have a 401(k), you will likely become a 401(k) millionaire by the time you are 60.

The number of years it takes to become a 401(k) millionaire

Becoming A Millionaire Is An Inevitability

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! Then you realize there are MUNI janitors making over $200,000 a year.

If you look at those working at Apple, Google, Yahoo, Facebook, Tesla, and Google, you can pretty much guarantee that a large majority of them will retire millionaires if they aren’t millionaires already. 23-year-old college kids are getting $150,000 compensation packages in 2021+. By the tim they are in their 30s, they are making $300,000+ a year.

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 and invest everyday for the next 10-20 years and you’ll be fine!

There are plenty of different investment strategies to help you build wealth over your life. Find one that fits you risk profile and stick with it.

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!

Part of getting rich is adopting a strong money mindset. Once you believe you deserve to be rich, you’ll be surprised at how much more money you’ll make.

As someone once said, “Don’t share the wealth. Go out and get your own!”

Related posts:

The First Million Might Just Be The Easiest

The Average Net Worth For The Above Average Person

Your Chance Of Becoming A Millionaire By Race And Age

Recommendation To Build Wealth

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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.

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Filed Under: Budgeting & Savings

Author Bio: I started Financial Samurai in 2009 to help people achieve financial freedom sooner. Financial Samurai is now one of the largest independently run personal finance sites with about one million visitors a month.

I spent 13 years working at Goldman Sachs and Credit Suisse. In 1999, I earned my BA from William & Mary and in 2006, I received my MBA from UC Berkeley.

In 2012, I left banking after negotiating a severance package worth over five years of living expenses. Today, I enjoy being a stay-at-home dad to two young children, playing tennis, and writing.

Order a hardcopy of my new WSJ bestselling book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. Not only will you build more wealth by reading my book, you’ll also make better choices when faced with some of life’s biggest decisions.

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Comments

  1. Bob says

    February 19, 2021 at 12:41 am

    > “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.”

    Um sorry but no. Not even close.

    Saving 20% of $60k every year for 30 years doesn’t even come close to $1 million if they are only getting 4% compound interest. They’ll have closer to $670k after 30 years, well short of a million. And very few people will save 20% of their income consistently for 30 years because mortgages will consume most of their income for at least 10 – 15 years of that period.

    The idea that someone earning $60k can easily save a million dollars in 30 years is very out of touch. Very, very few people earning $60k will come ever close to having a million dollars in their savings (or investment) accounts.

    Reply
    • Financial Samurai says

      February 19, 2021 at 5:45 am

      What you believe is what will likely come true. Just run the numbers in a compound interest rate calculator. To become a millionaire, you need to also believe you deserve to be rich.

      It is unlikely someone will maintain a $60,000 wage for 30 years. It is also likely you will return greater than 4% a year over a 30-year period. There are also ways to make more money via your X-Factor.

      Feel free to share your age and net worth. I encourage you to try and get in touch with the new reality because $3 million is the new $1 million.

      Reply
  2. My University Money says

    December 19, 2011 at 6:35 am

    I think the main limiting force is our need for consumer goods. Retailers add a substantial profit margin onto goods, and to constantly be in a state of wanting more material things can quickly eat into your savings rates. Most people are so used brainwashed, that they believe they can never reach the vaunted “millionaire” status; consequently, they spend their money on short-term luxuries like booze, presents, trips abroad etc. This kills any compounding. I would also argue that student loans, and buying “too much house” are key contributors do decreased savings rates during the time period where they would do the most good.

    Reply
  3. 20's Finances says

    December 18, 2011 at 5:45 pm

    Interesting timing on this considering my guest post at Evan’s blog. Like I said that, I will probably reach 1 million in my lifetime (unless I get hit by a bus), but my aim is not a lump sum – it is a cash flow. Much better approach if you ask me. Yet, that isn’t the question you are asking… :) No – considering the people I know hesitate to save money (instead of buying new phones, new useless crap, etc., no. People will be lucky to scrape by in retirement with what little money they have and social security (or what’s left of it).

    Reply
    • Financial Samurai says

      December 18, 2011 at 8:01 pm

      Gonna go check Evan’s site out.

      Glad you are in agreement that you will get to 1mil+ in your lifetime. Just don’t get that second card you write about in your post! And if you do, 1/10th rule!

      Reply
  4. Jerry says

    December 18, 2011 at 3:13 pm

    Savings can lead to wealth, for sure. But, investing wisely is insurance those savings will make you the money you want to have wealth.

    Reply
  5. marissa says

    December 18, 2011 at 10:54 am

    It’s odd- I was thinking about this same topic about my parents income this weekend. My mother wouldn’t consider herself a millionaire by any stretch, but being a high ranking government employee she has made more than that over the last 19 years. Earning the money isn’t as hard as people assume, its properly allocating it and allowing it to grow and be useful when you need it. There are tons of people who make quite a bit in terms of income, but at the end of the day have nothing to show for it because they spent it on shoes, purses and cars, and vacations.

    Reply
  6. Untemplater says

    December 18, 2011 at 9:31 am

    Being smart with money is more important than the amount of cash one has in the bank. A million dollars in the bank isn’t great if you have 3 million in debt! I think it’s also important not to drastically increase your expenses as your income goes up which I’ve seen a lot of people do. I don’t think making a million should be everyone’s target because a lot of us don’t need that much money to be successful or happy. Having an emergency fund, paying down debt, and saving and planning for retirement are goals I think everyone should have though.

    Reply
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