How to Become a Millionaire

Written by Nickel - 5 Comments

If you’ve ever read “The Millionaire Next Door” by Stanley and Danko, then you’ve no doubt seen statistics like this. But… I was reading through the latest issue of Bottom Line/Personal when I ran across the following:

“Thirty-two percent of the world’s millionaires earned their way to $1 million through salary, and 26% got there as business owners — compared with just 16% who became millionaires by inheriting it. The got their money from stock options and/or investments.”

I actually recall the numbers being tilted even further in favor of business owners when I first read “The Millionaire Next Door,” but I could be mistaken. The numbers in this case are attributed to the 10th Anniversary Edition of the World Wealth Report.

Published on February 6th, 2007 - 5 Comments
Filed under: Miscellany
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

Comments (scroll down to add your own):

Well, inflation, and all that.

Being a millionaire used to mean you were actually _rich_. Now it can often just mean that you’re prudent and old. Which is nothing against prudence or age (prudence being a requirement of continued wealth in the future no matter how rich you are today, and old age being vastly preferable to the alternative), but getting seriously rich just by working at a W2 job is virtually impossible. Which is why the breakdown favors business founders increasingly as the net-worth scale goes up.
Comment by Matt — Feb 6th 2007 @ 10:21 pm
$1 million certainly is not what it used to be. I agree with you, Matt, in that being a millionair doesn’t really mean that you’re *rich* anymore. Of course, I wouldn’t mind having $1 million in net worth (or in the bank account) — but having it wouldn’t automatically mean that I’m ready for retirement.

Starting and running your own business is the way to go. Even if it’s a small business. That’s where a lot of people get tripped up; thinking they have to run a medium- to large- sized business to make a difference. Even running a small business from your home can give you some tremendous advantages.

N.W.
http://www.networthchallenge.com
Comment by N.W. — Feb 6th 2007 @ 11:56 pm
You’re correct, the Millionaire Next Door did have stats more skewed towards business ownership, and went so far as to assert that the investing of such business owners was usually back into the business itself.

Then again, stats can say whatever you want them to say.
Comment by Joe — Feb 7th 2007 @ 12:22 pm
Well, the best way to make money is to have other people make it for you. Start a business, hire employees, and make 1.5x what you pay them. Repeat. Cash in.
Comment by junger — Feb 7th 2007 @ 9:56 pm
1980 millionaire = 2.5 million dollars today.
1970 millionaire = 5 million dollars today.

When I think of a millionaire, I think of the 1980s since I was in high school then. Its obviously a pretty relative term.

http://www.westegg.com/inflation/
Comment by L.H. — Feb 10th 2007 @ 4:35 am