Stanley and Danko state that when it comes to defining wealth in America, most people have it all wrong. They assert that wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is NOT what you spend, but what you ACCUMULATE. This is a profound insight in my opinion.
In the introduction to this book, Stanley and Danko provide interesting facts based on their research about the millionaires in America. It provides an interesting glimpse into the lives of millionaires in America.
They are educated, hard-working, and obsessed about saving. These qualities are what differentiates between non-millionaires and millionaires who might be living next door to you, but are hard to identify because they live such a low-key life.
Typically, on average they are 57 years old male, married with three children.
About 1 in 5 is retired, two-thirds are self-employed.
Many own businesses that are considered routine, dull to normal businesses and not very flashy.
About half of the wives do not work outside of the home and those who do work, they work as teachers.
Median household annual taxable (realized) income is $131,000.
The median millionaire household has a net worth of $1.6 million.
On average, their total annual taxable (realized) income is less than 7 percent of their wealth (translation: they live on less than 7 percent of their accumulated wealth).
97 percent of the millionaires own homes, live in homes valued at $320,000, half have occupied their home for more than 20 years.
80 percent of millionaires are self-made millionaires and did not become rich through inheritance or sudden windfall of any kind.
They live below their means: wear inexpensive suits and drive American made cars.
Their wives are planners and meticulous budgeters.
They have accumulated enough wealth to live without working for at least 10 years.
They have more than 6.5 times the level of wealth than the wealth of non-millionaire neighbors.
They are fairly well-educated, many hold advanced college degrees.
Only 17 percent of them or spouse attended private elementary or high school education. But, 55 percent of their children are now attending or have attended private schools.
They believe education is extremely important for themselves, children, and grand-children and spend heavily on education of their offspring.
About two-thirds work between 45-55 hours per week.
They hold nearly 20 percent of their household's wealth in stocks and mutual funds.
They would prefer to share their wealth with their daughters over their sons because they believe men seem to make more money with the same occupational categories.
They recommend accounting and law to their children for occupations.
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