Want to know what it takes to become a millionaire? Ramsey Solutions accessed the sources directly and investigated 10,000 cases. And some of the findings were surprising. Similarly, 8 out of 10 have invested in their own 401(k) plans.
Wait a second. Isn’t the billionaire supposed to live off Mummsey’s trust fund and pamper the family’s cash in Martha’s Vineyard seaside home?Not exactly — not even close, in fact. Dave Ramsey, personal finance expert and founder of Ramsey Solutions, says this myth of primarily inherited wealth is “totally false.”
When Ramsey’s National Study of Millionaires asked about the source of their wealth, they found that a staggering 79% of people did not receive an inheritance from their parents or other family members. Not one cent. Possibly an unpaid bill (although it wasn’t asked in the survey). But where does gems and blue chip stocks come from? No.
So how did they achieve billionaire status, and how can they replicate their success?
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Choose the Right Career
According to Ramsey’s research, five careers produced the most millionaires: engineers, accountants, managers, lawyers, and teachers.
These careers are strongly associated with millionaire status and higher education, but that didn’t mean attending a fancy school. Only 8% and 62% attended public school.
And there is one important point to note. That is, millionaire status and high salaries are not the same.
“Only 31% of people earned an average of $100,000 a year over their careers, and a third never made six figures in one year of their careers.”
What’s more, Ramsey millionaires don’t necessarily hold senior management positions, with just 15% in that category. In contrast, more than 9 in 10 (93%) say they became wealthy because they “worked hard.”
Where hard work meets smart finance
Good job performance, combined with smart retirement preparation, can be a financial hyperdrive. In fact, the survey found that 8 out of 10 people are investing in his 401(k) plan for their company. These plans not only offer tax breaks as you rack up your savings, but also feature employer matches that could run as high as 6% of his salary in many workplaces.
Spending cautiously, with 94% of respondents saying they live on less money than they make and almost three-quarters have never carried credit card balances in their lives is also important.
read more: The Great Escape: Rich young professionals earning over $100,000 are fleeing California and New York.
The key is to set a budget and stick to it. These millionaires spend less than $200 each month at restaurants and 93% use coupons while shopping.
(But think about how you can spend more valuable time. An extra hour of work is far better than wasting a $10 coupon.)
wake up to the american dream
If Ramsey’s research reveals any salient facts, they are: Negative attitudes, inaction, and bad spending habits can be the biggest obstacles to millionaire status.
In other words, you have to believe it. you have to act. You need to protect yourself from unnecessary spending and save wisely. These are the building blocks of the American Dream and what turns it into a million dollar reality.
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This article is for information only and should not be construed as advice. It is provided without warranty of any kind.