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“A Surprising Look At ‘The Millionaire Next Door’…”
By Sherman Ragland | February 20, 2008
In his landmark book, “The Millionaire Next Door”, author William Danko, and his co-author, sent a shot heard round the world when they published their findings after an extensive 20 year study of HARD COLD FACTS about what it really means to be a Millionaire in America.
Despite the public’s perception about what it really takes to become and stay wealthy, at least at the level of what could be labeled as “Millionaire”, the truth that Dank and his co-author uncovered was enough of a shock that the FULL title is actually: “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy”
Even though it has been over 12 years since the book first hit bookshelves, the research behind the book and the findings are worth looking at periodically. Here are some of the findings which may surprise you if you believe that Paris Hilton, Donald Trump and Elton John represent the “Typical” Millionaire in America:
* About two-thirds are working and self-employed, or own their own small businesses. Interestingly, self-employed people ( or small business owners) make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Many of the types of businesses could be classified as dull normal: e.g. contractors, auctioneers, owners of mobile-home parks, and real estate brokers/agents. But 50% have spouses who do not work outside the home.
* The average household net worth is $3.7 million.
* Their total annual realized income is less than 7 percent of their wealth, the rest is generated through passive-income activities like real estate investments.
* Most (97 percent) are homeowners.
* Most have never felt at a disadvantage because they did not receive any inheritance. About 80 percent are first-generation affluent.
* They live well below our means. Choosing to wear inexpensive suits, drive (big) American-made cars. Only a minority drive the current-model-year automobile. Only a minority ever lease a motor vehicles.
* All have a “go-to-hell fund.” In other words, they have accumulated enough wealth to live without working for ten or more years. Those with a net worth of only $1.6 million could live comfortably for more than twelve years.
* They have more than six and one-half times the level of wealth of their non-millionaire next door neighbors, but, in their neighborhood, the non-millionaires outnumber them better than three to one.
* As a group, they believe that education is extremely important for themselves, their souses and their children. They spend heavily for the education, particularly in areas that will increase either their wealth, or their spouse’s or children’s financial literacy
* They hold nearly 20% of their household’s wealth in securities such as publicly traded stocks and mutual funds. They hold even more in their private pension plans and self-directed IRA’s, and about 21% of their household’s wealth is in their own private businesses, and about 50% of their wealth comes from their “passive” real estate investments. Their favorite type of real estate investment: small commercial properties, acquired over time, located in the towns where they live.
** To learn more about how you can obtain a FREE Autographed By The Author Copy of The Millionaire Next Door, Please go to: **
www.MintingMoneyInTheDark.com
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Tags: affluent, commercial real estate, Donald trump, millionaires, millionaire next door, paris hilton, real estate investments, sherman ragland, william danko
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