How Most Millionaires Got Rich

What traits do millionaires have in common?

The Fidelity study results showed that even though millionaires have different ways of making money, they often share these traits:

• They set ambitious goals and act on them. Self-made millionaires put their ideas and dreams into action, whether that’s starting a business or achieving other professional or personal pursuits. This determination is a common driver among many who made their millions without an inheritance.
• They have mentors. Many self-made millionaires are quick to admit that they cannot possibly know how to do everything. They reach out to others who know the ins and outs of different types of saving and investing, tapping into the best minds on each subject for perspective and insight. That certainly pays off.
• They look for feedback. For a self-made millionaire, self-improvement never stops. Self-made millionaires look for critique and feedback in their ideas and business practices, ensuring that they can better identify blind spots and guarantee that their ventures will succeed.
• They are not afraid of failure. Millionaires understand the benefits of learning lessons through failure. However, the risks they take are thoroughly calculated and each scenario played out. Once they commit to something, they give their all.
• They understand the value of time. Time is money, and millionaires know this all too They quickly learn how to manage their time, and they know that there is no reason to trade time for money.

What do millionaires do with their money?

When it comes to investment strategies, self-made millionaires were more likely to add equity investments, while those who were born wealthy typically had more real estate investments, according to the study. Diversifying those investments is key among many millionaires.

Millionaires put their money in a variety of places, including their primary residence, mutual funds, stocks and retirement accounts. Millionaires focus on putting their money where it is going to grow. They are careful not to invest large sums into items that will depreciate. A car for everyday driving, for example, will most likely lose value over time.

The key for most millionaires is to save money before spending it. No matter how much their annual salary may be, most millionaires put their money where it will grow, usually in stocks, bonds, and other types of stable investments. 

Examples of self-made millionaires

According to the same Wealth-X study discussed earlier in this article, as of 2018, a little over 265,000 individuals are considered ultra-wealthy, meaning they have a net worth of $30 million or more. Moreover, more than two-thirds are self-made. Here are three famous examples:

• Barbara Corcoran: The real estate mogul turned Shark Tank investor started her eponymous brokerage business with a $1,000 loan. Under her supervision, shegrew the business into a multi-million-dollar empire that she sold for $66 million in 2001.
• Janice Bryant Howroyd. The founder and CEO of ActOne Group started her staffing agency with $1,500 ($900 of which she borrowed from her mother), a fax machine, and a phone. She is now one of the richest self-made Black women millionaires in the U.S., with an estimated net worth of $285 million.
• Warren Buffet. Perhaps one of the most famous and richest people in the world – and technically a billionaire and not a millionaire — Warren Buffett still merits a mention in this list because he is well known for being self-made. The Berkshire Hathaway chairman and CEO made his first millions by running a hedge fund and is known for his principled and sensible approach to investing.

What are the best ways to become a millionaire?

The Fidelity study showed that when considering their financial future, 30% of the millionaires surveyed said they were concerned with preserving their wealth, while 20% said they were focused on growing their fortune. This forms the basis of some basic strategies if you’re hoping to join the millionaire ranks.

“Today’s millionaires are multidimensional, and to really understand them, you need to look not only at their outlook but also at their path to wealth and their financial goals for the future,” said Sanjiv Mirchandani, president of National Financial, a Fidelity Investments company.

Millionaires suggest several paths to building your wealth. Here are a few that you can learn from yourself:

Invest in different places and avenues

Don’t put your eggs in one basket. Diversifying your investments helps manage risk by ensuring that all your money is not at risk if a particular investment goes south.

Have multiple streams of income

Many self-made millionaires have money coming in from several places, including their salaries, dividends from investments, income from rental properties, and investments they have made in other business enterprises, to name a few examples. If one income stream slows down, there’s another that can take its place. Much of this is called passive income, or money being earned without actively spending time and effort in the enterprise.

Save, save, save

One common theme you’ll hear from self-made millionaires is to hold on to your money. Put your money in investment accounts where it can sit and earn interest over time (even though interest rates are much lower than they used to be).