What Drives Millionaires?
The popular perception of millionaires doesn't always align with reality. We often think of them as a breed apart. Blessed with special abilities or secret knowledge. Keepers of fantastic wealth, splurging on luxury items and palatial homes.
The truth is much more prosaic. Your typical millionaire is the dentist or accountant down the street. The one living modestly and saving. He skips the luxury items and puts his money to work through investments. He's careful, cautions -- even boring. He's not rich, either. Today one million dollars hardly promises lifetime financial security. It's a great start, however.
UBS Wealth Management Americas recently released a report on the issues that drive the millionaire class. The study examined the factors guiding their behavior. It was based on interviews with more than 2,000 high net worth American investors.
What UBS researchers found might surprise you. Rather than rest on their laurels, millionaires strive even harder after realizing their goals.
Why? Three reasons, primarily. First, they are terrified of losing what they've built. By working even harder, they mitigate this possibility. They also have burning ambitions yet to be realized. These ambitions aren't necessarily financial. For most successful people, money is a means to an end. It's what money provides that's truly important. Financial independence. Validation. The ability to help others. A personal legacy.
The millionaires interviewed by UBS also reported a strong desire to protect their family's lifestyle. Having tasted success, they're determined to guard it ferociously.
Perhaps most interesting, the study found nearly eight in ten millionaires grew up middle class or below. That kind of economic mobility is encouraging. Setting goals helps, too. Sixty-one percent of those interviewed made becoming a millionaire a specific life goal.
What millionaires can teach us
So how did these millionaires move from middle class to wealthy? They didn't rely on family connections or a brilliant idea. Eighty five-percent attributed their success to something far more mundane -- work ethic.
What else do the wealthy know that escapes the average person? Earning power is one key factor. Millionaires understand the vital importance of income. Even the most brilliant saving techniques will only take you so far. To accumulate serious wealth, you need to earn.
Many of us view money in terms of time. You work 40 hours each week for a certain salary. If you want to earn more, you work more hours.
This is small-scale thinking, however. To build serious wealth, you need to divorce income from time. A great idea or a great investment isn't constrained by the calendar. Either one can make enormous profits while you sleep.
Wealthy people know that time is perhaps the most valuable currency of all. Far more valuable than money. That's why the wealthy buy time. They pay others to do time-consuming tasks for them. They use that highly valuable bonus time to further their own financial ends.
People who aren't wealthy can't afford to buy time. Instead, they sell time. The more time you sell, the less energy you have to realize your dreams.
Mindset is also critically important. Most wealthy people view money dispassionately. They don't allow emotion to enter the equation. Reason rules the day. If you approach money from a place of fear, you handicap your prospects.
Finally, if you want to become wealthy, focus on investing rather than spending. It's a small, obvious thing. Yet nothing will do more to better your financial position.
The conclusions of the UBS report are clear. Millionaires will outwork anyone. They work even harder once they're successful. Most of them came from the middle class. All of them are desperate not to go back.
That's because wealth does breed happiness. It allows you to indulge your passions. To take care of loved ones. Pursue your life goals.
The blueprint for getting there hasn't changed. Earn, save and invest wisely -- and you'll reap enormous benefits.