“The rich are different from you and me.” — F. Scott Fitzgerald
“Yes, they have more money.” — Ernest Hemingway
I received a pretty strong reaction from some readers to a post – largely tongue in cheek – that had a ‘social moral’ …
… that ‘rich people’ are actually just ‘people’ who happen to have a few more zeros in their bank account.
For a start, let’s look at how they got there: inheritance; marriage; luck; hard work [AJC: although, ‘marriage’ could also be included in this last one 🙂 ]
It’s a stretch then to say that ‘The Rich’ can be genetically or socially any different to the ‘The Not Rich’: what are the common traits required for each of the above methods? None obvious to me …
So, if anybody can get rich, why should ‘The Rich’ be any better or worse on any human scale (e.g. being socially responsible; giving to charity; etc; etc) than anybody else?
On the other hand, they may have the means to display their characteristics more obviously – for better or worse 😉
But, let’s not generalize, let’s turn to Prof. Thomas J. Stanley, former professor of marketing at Georgia State University (author of The Millionaire Next Door and The Millionaire Mind); I found a summary of the latter book by noted economist Prof. Mark Skousen who says:
Here are the results of his (Prof. Stanley’s] survey of over 1,000 super-millionaires (people who earn $1,000,000 a year or more):
- They live far below their means, and have little or no debt. Most pay off their credit cards every month; 40% have no home mortgage at all.
- Millionaires are frugal; they prepare shopping lists, resole their shoes, and save a lot of money; but they are not misers; they live balanced lives.
- 97% are homeowners; they tend to live in fine homes in older neighborhoods. (Only 27% have ever built their “dreamhome.”)
- 92% are married; only 2% are currently divorced. Millionaire couples have less than one-third the divorce rate of non-millionaire couples. The typical couple in the millionaire group has been married for 28 years, and has three children. Nearly 50% of the wives of the super-rich do not work outside the home.
- Most are one-generation millionaires who became wealthy as business owners or executives; most did not inherit their wealth.
- Almost all are well educated; 90% are college graduates, and 52% hold advanced degrees; however, few graduated top of their class — most were “B” students. They learned two lessons from college: discipline and tenacity.
- Most live balanced lives; they are not workaholics; 93% listed socialiazing with family members as their #1 activity; 45% play golf. (Stanley didn’t survey whether they were avid book readers — too bad.)
- 52% attend church at least once a month; 37% consider themselves very religious.
- They share five basic ingredients to success: integrity, discipline, social skills, a supportive spouse, and hard work.
- They contribute heavily to charity, church and community activities (64%).
- Their #1 worry: taxes! Their average annual federal tax bill: $300,000. The top 1/10 of 1% of U.S. income earners pays 14.7% of all income taxes collected!
- “Not one millionaire had anything nice to say about gambling.” Okay, but his survey also showed that 33% played the lottery at least once during the year!
Thus, we see how the super upper-income families of this nation are not the ones contributing to crime, welfare, divorce, child abuse, and a spendthrift society. But they are playing a lot of taxes and making a lot of contributions to solve these social problems.
But one still wonders, why are any of the ‘Rich = Bad’ believers reading a blog titled: How to Make $7 Million in 7 years?
Thanks for posting these survey results. I have read the other book (The millionaire next door) and I really liked it.
Quick question about the people surveyed: You stated that these are people that earn $1,000,000 a year or more. Is that through all income sources, i.e. rent, dividends, business income, etc or only a certain kind of income?
@ Thomas – I can’t answer for certain, but the book found that most millionaires owned businesses – for long periods of time – and the owners slowly accumulated wealth by not spending and investing conservatively. This leads me to believe that it’s the latter: “i.e. rent, dividends, business income, etc”.
Guten Tag von Deutschland. I’m on travel in the German Alps south of Munich. 🙂
How timely, I’m currently reading “The Millionaire Mind.” It’s interesting to see the habit patterns and opinions of so many successful people. The book can be a bit dry at times (it’s basically a report of findings) but it’s been encouraging to discover threads of my own behaviors and beliefs in the book.
Now I just need to find the money.
I’m only a couple chapters into the book but my big take away thus far is that being a moral person of high standards who owns and invests in their own business has been a key success factor.
This is similar to the tone you take here at 7M7Y and one I’ve seen espoused in other books (e.g. “Get Rich, Stay Rich and Pass It On”).
As for bashing the rich. Well, I think people tend to criticize and complain the most about the things they understand the least.
Thanks for the great summary,
Learn to mange money and lead your personal finances.
@ Jeff – Just because that’s how MOST made their money, doesn’t mean that it’s the BEST way to make YOUR money … that’s what we want to talk about here. Of course, the Millionaire Mind does lay down some useful groundwork.
By the way, the ONLY thing that I found useful about “get rich, stay rich, pass it on” is their Benchmark (even that, I have some disagreement over … for example too much of these millionaire’s net worth is tied up in their personal real estate (home, second/third homes, etc.),
Also, they have confused CAUSE with EFFECT:
Because so many millionaires have made their money in business, their conclusion is that if you are rich in some other way (say CEO,professional, consultant, etc.) and want to pass your wealth on to the next generation you should then buy or start a ‘real’ business … poppycock!
@AJC – Maybe I’ve misunderstood your philosophy. I read both 7M7Y and 7MIT and have used your methods to try and determine my own number. Through that process I have come to the conclusion that owning your own business is one of the best ways to achieve the necessary compound growth required to achieve my number.
Have I misinterpreted the message?
@ Jeff – Not at all … and, a great question 🙂 I can summarize my position as follows:
MM201 : Business = Good
MM301 : Business = Bad
… naturally, there are exceptions, but not in the way that Get Rich, Stay Rich, Pass It On suggests.
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