Smart Money lists 10 things millionaires won't tell you as follows:
1. “You may think I’m rich, but I don’t.” A recent survey by Fidelity found 46% of millionaires “do not feel” wealthy.
2. “I shop at Wal-Mart . . .” Millionaires know what it is to be frugal. About 84% say they spend with a middle-class mindset, according to the AmEx/Harrison survey. That means buying luxury items on sale, hunting for bargains – and even clipping coupons. In fact, affluent households, including those with income above $100,000, tend to be heavier coupon users than those with lower incomes, according to a 2009 study by Nielsen and market research firm Inmar.
3. “. . . but I didn’t get rich by skimping on lattes.” So how do you join the millionaires’ club? One way is to run your own business. That’s how more than a third of all millionaires made their money, according to the AmEx/Harrison survey. Over a third had a professional practice or worked in the corporate world; only 5% inherited their wealth.
4. “I have a concierge for everything.”
5. “You don’t get rich by being nice.”
6. “Taxes are for little people.” Most millionaires do pay taxes. In fact, the top 1% of earners paid about 40% of total federal income taxes collected in 2007, according to the Internal Revenue Service. That said, the wealthy tend to derive a higher portion of their income from dividends and capital gains, which are taxed at lower rates than wages (15% for long-term capital gains vs. 25% for middle-class wages). Also, high-income earners pay Social Security tax only on their first $106,800 of income.
7. “I was a B student.” According to the book "The Millionaire Mind," the median college grade point average for millionaires is 2.9, and the average SAT score is 1190 — hardly Harvard material. In fact, 59% of millionaires attended a state college or university, according to AmEx/Harrison.
8. “Like my Ferrari? It’s a rental.” Why spend $3,000 on a Versace bag that’ll be out of style as soon as next season when you can rent it for $175 a month?
9. “Turns out money can buy happiness.” “There’s no group in America that’s happier than the wealthy,” says Taylor, of the Harrison Group. Roughly 65% of millionaires say that money “created” more happiness for them, he notes.
10. “You worry about the Joneses — I worry about keeping up with the Trumps.” Wealth may go a long way toward creating happiness, but the middle-class rich still can’t afford the life of the billionaire next door — the guy who writes charity checks for $100,000 and retreats to his own private island. “What makes people happy isn’t how much they’re making,” says Glenn Firebaugh, a sociologist at Pennsylvania State University. “It’s how much they’re making relative to their peers.”
I understand that Smart Money wants these pieces to have "shock value" and hence they push the limits a bit. But I believe they still want to be truthful. As such, I think they get some of these right and some wrong. Here's my take on the ten:
1. I think most of the millionaires don't believe they are "rich," at least not in the I-can-do-whatever-I-want-whenever-I-want sense of the word. I think they realize that they are certainly doing well -- and much better than most -- but they also realize that a million dollars isn't going to last 30 years into retirement.
2. Yep, millionaires shop at Walmart -- as well as other places that provide good prices. They didn't get wealthy by spending all their money needlessly (when they could get better prices elsewhere) after all.
3. Now they're bordering on the truth IMO. I don't think millionaires are looking at every single penny and avoiding spending at all costs. But I do think they look for value and are not spending willy nilly all over the place.
4. I think this is untrue. Mega-rich people may have concierges for everything, but the average wealthy person certainly does not.
5. This one is bordering on the truth. I think many wealthy people have gotten where they are by being ruthless, but I also think that just as many have become wealthy while being kind and fair.
6. Yes, wealthy people look for all the legal ways possible to avoid paying taxes. What's wrong with this?
7. As we've discussed, success in life is more about the person and his/her qualities, not what school they went to and what their grades were.
8. I think this is stretching the truth. Most wealthy people do not rent (or own) very many luxury items.
9. We've talked about money and happiness several times before, and my take is that money can make you happier to a point, but after that, more money doesn't increase happiness. That's the research I've seen at least.
10. I think most millionaires don't really "worry" much and certainly aren't concerned with trying to be The Donald. That said, they do have concerns about the economy, future financial issues (like healthcare), and the like.
Ok, so you may be asking, "What makes this guy think he knows more about millionaires than Smart Money?" A few things:
- Personal experience -- with myself, friends, and family that fall into this group.
- Reading about Millionaires -- books, web articles, etc.
- Writing about millionaires -- if you recall, I did several pieces on millionaires not too long ago.
In fact, here are some posts you may want to check out of you want more insight into what the average millionaire is dealing with, what he thinks, what he does, etc.:
- What Real Millionaires Do
- How to Become Wealthy
- Playing Good Defense is the Key to Getting Rich
- One Thing that Sets Wealthy People Apart
- The Greatest Detriment to Building Wealth
- How to Be Financially Comfortable
- What Makes Wealthy People Wealthy
- The Difference Between the Wealthy and Everyone Else
- The Most Important Factors Making People Wealthy
- Rich People Know that Things Don't Satisfy