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How Most Millionaires Got Rich

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  • There are two types of millionaires: self-made millionaires and those born into wealth.
  • No matter how millionaires get their money, they all share some traits.
  • Millionaires have different sources of assets and income.

Most of today's millionaires weren't born into their wealth, research shows.

A study by Fidelity Investments found that 88% of millionaires are self-made millionaires. Overall, the research revealed that current millionaires are, on average, 61 years old with $3.05 million in assets.

While nearly three-quarters of millionaires feel rich, those who do not said they would need an average of $5 million of investable assets to begin feeling wealthy.

"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.

The study also revealed that self-made millionaires' top sources of assets were investments/capital appreciation, compensation and employee stock options/profit sharing. Those who were born wealthy were more likely to cite inheritance, entrepreneurship and real estate investment appreciation as asset sources.

The 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. We all have dreams, but millionaires actually pursue their ideas and passions. They do not let anything hold them back.

They have mentors. Millionaires know that they cannot possibly know how to do everything, so they find someone to guide them through the highs and lows of making money. They lean on others for perspective and insight.

They are not afraid of failure. Millionaires understand the benefits of learning lessons through failure. However, the risks they take are calculated and thought out. Once they commit to something, they give their all.

They understand the value of time. Millionaires quickly learn how to manage their time, and they know that there is no reason to trade time for 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. 

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 put a large amount of money into items that will depreciate. A car, 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 is, most millionaires put their money where it will grow, usually in stocks and bonds. 

According to a survey by Best Wallet Hacks, the top 10% of U.S. income earners are gaining wealth from business, farm and/or self-employment income. Half of their income comes from wages through business, and the other half comes from interest, dividends and capital gains. Those numbers have not changed much since 1989.

Millionaires suggest several paths to building your wealth and becoming a millionaire. One path to consider is having multiple streams of income. Those who want to earn more money should make sure that all of their income streams continue to grow.

If you want to be a millionaire, you should invest money every day. You should work to make more money so that you can invest more.

Saving is also a great way to become a millionaire. In other words, when you earn money, put it in a savings, retirement or some other investment account. When you get paid, have an automatic deduction go to some type of savings.

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.

The study found that millionaires' financial environment outlook continues to improve, with their optimism reaching the highest level since the survey's inception in 2006.

"One trend has held true throughout the life of this study: The millionaire investor's outlook has been consistently pragmatic about current market conditions and pervasively optimistic about a future recovery," said Michael R. Durbin, president of Fidelity Institutional Wealth Services.  "In many ways, what millionaires have been thinking and doing can be a strong indicator for financial trends."

Once such trend is millionaires' current interest in the stock market. The millionaires surveyed ranked individual domestic stocks as their top investment added in the past year, followed by certificates of deposit, money market accounts or cash equivalents; equity exchange traded funds; individual domestic bonds; and domestic equity mutual funds.

The study was based on surveys of more than 1,000 millionaire investors. 

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