I'll tell you honestly that the successful man is a guy who works at a job, who likes his work, who can't wait to get up in the morning to get down to the office, and that's my criteria. There are more people today working at jobs that they don't like. One millionaire, when asked why he thought there are four times as many millionaire entrepreneurs as there are millionaire employees, stated it this way: Wealth is generated through talent, desire, and discipline. But just because a business is profitable doesn't mean its owners and employees will become wealthy and affluent. Factor #7: They chose the right occupation. In a nation geared toward turbocharged levels of consumption, market opportunities are created constantly for those willing to supply new products or ideas. Factor #6: They are proficient in targeting market opportunities.įinding specific niches and exploiting them is often the key to generating an above-average income. "The role of enlightened parents," the authors write, "is to strengthen the weak." They found that cash gifts from affluent parents to their adult children serve dual outcomes: They act to increase the children's dependence upon the parents for continuing financial support, and they continuously deplete the parents' financial position. Factor #5: Their adult children are economically self-sufficient.
After all, it's much easier to spend someone else's money than your own. These gifts - whether for down payments or for a grandchild's private-school education − will, more often than not, simply generate higher levels of consumption. Generally speaking, the more dollars adult children receive, the fewer they will accumulate. Statistics demonstrate that the more financial assistance an adult child of affluent parents receives, the less likely it is that that adult child will become wealthy. Factor #4: Their parents did not provide economic outpatient care. After all, it is much easier to appear wealthy than it is to be wealthy. The wealthy aren't interested in status vehicles or other showy products. The wealthy understand that conspicuous consumption and high levels of "domestic overhead" will likely impress Joe and Jane America, but these status expenses carry a highly negative correlation with one's true net worth. Factor #3: They believe that financial independence is more important than displaying high social status. They do not spend much time researching the purchase of their next luxury automobile. They spend time examining ways to increase their unrealized income i.e., tax-advantaged investment accounts. They spend significant time researching their investments. They anticipate and plan their incomes and expenses - often as much as a year in advance.
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The wealthy know how to budget their money, and they know how to budget their time. Factor #2: They allocate their time, energy, and money efficiently, in ways conducive to building wealth. Mundane consumption habits that are void of luxury-car purchases and fabulous yachting sprees may not impress the neighbors or the media, but then, impressing the public isn't the goal of most first-generation millionaires. Factor #1: They live well below their means.Ĭontrary to popular belief, frugality is the foundation of wealth. Each factor played an integral part in the means by which these people achieved their enviable financial positions. The "wealthy" threshold begins with individuals whose net worth is $1 million or more in 1996, this excluded all but 3.5% of America's 100 million households.Īccording to the research, the truly affluent in America have seven standout characteristics common to all of them. They refer to this as an expected level of wealth. Rather, it is determined by a combination of that person's age and net worth. In their minds, wealth has little to do with an individual's level of income. The book is quick to differentiate between what most people consider "wealth" and what the authors believe constitutes "true" wealth and affluence.