The Best Ways American Millionaires Make Their Money
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Nearly 22 million Americans have a net worth of at least $ 1 million, according to Credit Suisse’s Global Wealth Report 2021, or more than 8% of adults in the country. In New York City alone, there are 820,000 millionaires.
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Each of them has a different story of how they got there, but many American millionaires share similar traits, skills, behaviors, philosophies, and fields. All of them are either self-taught or born into it, and most of those who made a lot of money have taken one of the four general paths to get there. From there, 10 industries stand out primarily as assembly lines for the ultra-rich – but no matter what industry, most millionaires are brought together by a few common rallyers.
To help light the path to a seven-figure net worth, GOBankingRates used a variety of sources to examine the industries, backgrounds, trends, and sources of income that are common to millions of American millionaires.
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If you don’t win the birth lottery, you will have to win it yourself
Every millionaire in America falls into one of two categories: those who made themselves and those who got rich from that quirky roll of the dice so important when they were born into money. The latter, of course, is the easier of the two options, but it is not the more common.
According to the Wealth-X World Ultra Wealth Report 2021, the vast majority of very high net worth (UHNW) individuals – those worth at least $ 30 million – are self-taught, 72%, to be exact. Granted, this percentage is for the entire world, not just the United States, but America is the country of UHNW individuals.
And of those individuals, 101,240 live in the United States. The next closest competitor, China, is home to less than 30,000 despite the country’s huge demographic advantage. The United States is home to three of the top five UHNW cities in the world (New York, Los Angeles, and Chicago) and six of the top 10 (add San Francisco, Washington, DC, and Dallas).
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In a writing for CNBC, financial expert and author Tim Corley presented the results of the research he conducted for one of his books. The results revealed that people tend to follow one of the four paths to becoming millionaires.
The easiest way, and the only one that comes with something like a guarantee, is what Corley calls the saver-investor route. About 1 in 5 millionaires in her study banked their first million in their 30s, despite middle-class incomes. They did this by living sparingly, systematically saving and investing at least 20% of their income from the start of their working life.
The hardest path – followed by around 28% of millionaires – is the so-called dreamers path. These millionaires get rich by beating every odds in a high reward, low probability business like becoming a successful millionaire actor, athlete, musician, or business owner. The way of life is defined by long hours, a lot of stress, and years of toil without a regular paycheck. When they hit, however, they hit big – their average net worth is $ 7.4 million, by far the highest in the study.
About 1 in 3 millionaires made their money from what Corley calls the Company’s Climber Path. Climbing the corporate ladder into executive territory earns the average climber $ 3.4 million after 22 years.
Finally, there is the path of the virtuosos, which is Corley’s name for the compromise of money for knowledge and expertise. About 1 in 5 millionaires take this route and earn $ 4 million after 20 years. Many of those years are spent learning and becoming one of the best in a highly competitive and complicated field like law or medicine, where they are paid a handsome sum for their exceptional skills and knowledge.
Learn More: How Long Will $ 1 Million In Savings Last In Each State
If millionaire status isn’t a high enough aspiration for you, there’s no better time than now to become a billionaire – the three-point global club now has a record 2,755 members, according to Forbes.
The 10 industries that have produced the highest proportion of billionaires in the world, at least to the highest number of billionaires, are:
- Media and entertainment
- Real estate
- Food and drink
- Health care
- Fashion and retail
- Finances and Investments
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Their habits are more important than their fields
While it is true that many of America’s richest people come from the same industries, many others share the same habits, priorities and perspectives. According to Forbes, the following traits are common to people whose bank accounts you envy:
- They are more likely to spend money on experiments than on things.
- They invest in land and real estate.
- They follow changes in tax laws and interest rates.
- They are methodical savers and disciplined budgets.
- They automatically pay their bills and investments.
- They choose opportunities selectively and say “no” frequently.
- They have a team of specialists who manage their finances.
- They are frugal.
- They create multiple streams of passive income.
- They are adept at using debt wisely.
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