When I first read The Millionaire Next Door by Thomas Stanley and William Danko, it didn’t inspire me. It’s not that I disagreed with the authors, but I found the book uninteresting. It was one of the first financial books I read after beginning Consumerism Commentary, and it came highly recommended from readers here and participants in The Motley Fool‘s community.
Without getting too much into my problems with the book, I will say that the idea that a “millionaire” is more likely to be your local business owner rather than someone born into a family of money was new to me.
Recently, PNC Wealth Management conducted a survey of people with more than $500,000 free to invest as they like, a fair definition of “wealthy,” and possibly “millionaire” once you begin including home equity and other assets. Only 6% of those surveyed earned their money from inheritance alone. 69% earned their wealth mostly by trading time and effort for money, or by “working.”
Here are some interesting statistics I pulled from an article discussing the survey results.
- 36% of earners and 27% of heirs are concerned about an economic recession.
- 77% of earners and 67% of heirs believe they have a lot of control of their financial future.
- 39% of earners and 21% of heirs are moderate or risky investors.
- 75% of earners and 50% of heirs have less stress thanks to their wealth.
- 51% of earners and 33% of heirs believe their wealth has led to increases of happiness.
- Heirs are twice as likely to believe that their wealth causes more problems that it solves.
- 37% of earners and 25% of heirs believe that luck played a major role in their financial success.
For me, the choice is clear. There is only one option if I want to find myself with $500,000 of investible assets: earn rather than inherit.
[Yahoo Finance, MarketWatch: Earnings Growth]