Friday, April 1, 2016

Characteristics Of A Millionaire?

From Stanley and Danko who wrote the book "The Millionaire Nest Door". Guess what? Amway diamonds don't fit the description.


Who is the prototypical American millionaire? What would he tell you about himself?(*)

* I am a fifty-seven-year-old male, married with three children. About 70 percent of us earn 80 percent or more of our household's income.

* About one in five of us is retired. About two-thirds of us who are working are self-employed. Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs. Most of the others are self-employed professionals, such as doctors and accountants.

* Many of the types of businesses we are in could be classified as dullnormal. We are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.

* About half of our wives do not work outside the home. The number-one occupation for those wives who do work is teacher.

* Our household's total annual realized (taxable) income is $131,000 (median, or 50th percentile), while our average income is $247,000. Note that those of us who have incomes in the $500,000 to $999,999 category (8 percent) and the $1 million or more category (5 percent) skew the average upward.

* We have an average household net worth of $3.7 million. Of course, some of our cohorts have accumulated much more. Nearly 6 percent have a net worth of over $10 million. Again, these people skew our average upward. The typical (median, or 50th percentile) millionaire household has a net worth of $1.6 million.

* On average, our total annual realized income is less than 7 percent of our wealth. In other words, we live on less than 7 percent of our wealth.

* Most of us (97 percent) are homeowners. We live in homes currently valued at an average of $320,000. About half of us have occupied the same home for more than twenty years. Thus, we have enjoyed significant increases in the value of our homes.

* Most of us have never felt at a disadvantage because we did not receive any inheritance. About 80 percent of us are first-generation affluent.

* We live well below our means. We wear inexpensive suits and drive American-made cars. Only a minority of us drive the current-model-year automobile. Only a minority ever lease our motor vehicles.

* Most of our wives are planners and meticulous budgeters. In fact, only 18 percent of us disagreed with the statement "Charity begins at home." Most of us will tell you that our wives are a lot more conservative with money than we are.

* We have a "go-to-hell fund." In other words, we have accumulated enough wealth to live without working for ten or more years. Thus, those of us with a net worth of $1.6 million could live comfortably for more than twelve years. Actually, we could live longer than that, since we save at least 15 percent of our earned income.

* We have more than six and one-half times the level of wealth of our nonmillionaire neighbors, but, in our neighborhood, these nonmillionaires outnumber us better than three to one. Could it be that they have chosen to trade wealth for acquiring high-status material possessions?

* As a group, we are fairly well educated. Only about one in five are not college graduates. Many of us hold advanced degrees. Eighteen percent have master's degrees, 8 percent law degrees, 6 percent medical degrees, and 6 percent Ph.D.s.

* Only 17 percent of us or our spouses ever attended a private elementary or private high school. But 55 percent of our children are currently attending or have attended private schools.

* As a group, we believe that education is extremely important for ourselves, our children, and our grandchildren. We spend heavily for the educations of our offspring.

* About two-thirds of us work between forty-five and fifty-five hours per week.

* We are fastidious investors. On average, we invest nearly 20 percent of our household realized income each year. Most of us invest at least 15 percent. Seventy-nine percent of us have at least one account with a brokerage company. But we make our own investment decisions.

* We hold nearly 20 percent of our household's wealth in transaction securities such as publicly traded stocks and mutual funds. But we rarely sell our equity investments. We hold even more in our pension plans. On average, 21 percent of our household's wealth is in our private businesses.

* As a group, we feel that our daughters are financially handicapped in comparison to our sons. Men seem to make much more money even within the same occupational categories. That is why most of us would not hesitate to share some of our wealth with our daughters. Our sons, and men in general, have the deck of economic cards stacked in their favor. They should not need subsidies from their parents.

* What would be the ideal occupations for our sons and daughters? There are about 3.5 millionaire households like ours. Our numbers are growing much faster than the general population. Our kids should consider providing affluent people with some valuable service. Overall, our most trusted financial advisors are our accountants. Our attorneys are also very important. So we recommend accounting and law to our children. Tax advisors and estate-planning experts will be in big demand over the next fifteen years.

* I am a tightwad. That's one of the main reasons I completed a long questionnaire for a crispy $1 bill. Why else would I spend two or three hours being personally interviewed by these authors? They paid me $100, $200, or $250. Oh, they made me another offer--to donate in my name the money I earned for my interview to my favorite charity. But I told them, "I am my favorite charity."


Ask the average American to define the term wealthy. Most would give the same definition found in Webster's. Wealthy to them refers to people who have an abundance of material possessions.

We define wealthy differently. We do not define wealthy, affluent, or rich in terms of material possessions. Many people who display a high-consumption lifestyle have little or no investments, appreciable assets, income-producing assets, common stocks, bonds, private businesses, oil/gas rights, or timber land. Conversely, those people whom we define as being wealthy get much more pleasure from owning substantial amounts of appreciable assets than from displaying a high-consumption lifestyle.


Ben Dover said...

Characteristics of an Ambot...

You have a J-O-B!?!??! You suck, congratulations on being a worthless loser.

You have stocks!?!?!? WTF is that...did you mean Stock Cars!?!?! WE HAVE A NASCAR!

You have bonds!?!??! I just got out on bond...why would you want those?!?!

You drive an American made car!?!??! I love America...check out my new MERCEDES!

You went to college!?!?! Way to get into that scam...What a brainwashed slave moron idiot dork!

You live below your means!?!?!? Pshhhh me too...They still accept my credit cards everywhere.

Joecool said...

LOL. I wonder how many diamonds are actually millionaires? I suspect many are not.

Paul said...

Joe, according to the 2010 official Amway publication 'A Business Opportunity for Entrepreneurs' page 11, it says that "in 2009 0.18% of Amway IBOs were at Gold level getting an average annual compensation of $12,303 (Gross Income before expenses, NOT NET), 0.26% of Amway IBOs were at Founders Platinum level getting an average annual compensation of $40,125, 0.02% of Amway IBOs were at Founders Emerald level getting an average annual compensation of $142,181, 0.01% of Amway IBOs were at Founders Diamond level getting an average annual compensation of $609,541."
So 99.5% of IBOs make LESS than $12,303/yr BEFORE EXPENSES, with all those years and years of time and effort.
I am sure millions of Americans with J-O-Bs make much more than that with much less effort and time.
Who in Amway has financial freedom? 0.03% making more than $142,181? That's 3 out of 10,000. The other 9,997 are slaves to them working for less than minimum wage for years and years until they wake up and quit this slavery. Even those 0.03% can't afford private jets and the stuff they claim, they make less than average doctors and lawyers do.
Who would go into any business or profession with those odds of success and those numbers?
But I wanted to ask you, Joe, do you have any figures on Platinum level like the ones above? Thanks.

Joecool said...

Paul, I think you refer to the same figures I've seen from Amway before. So few even reach the gold level and even at that, there is documentation that many of those people do not have a net profit.

What makes all of this even worse is not that hardly anyone made money, but many of these folks also paid money to upline to help them succeed in the form of tools and functions.

It's obvious that the tools and the upline teaching are highly ineffective, and very likely that Amway and MLM is simply a flawed system designed to have the masses support a few "diamonds" at the top.