Now that we’ve had 100 millionaire interviews I thought it was a good time to summarize what we’ve discovered so far.
I’ll do this in two parts.
In this post I’ll focus on a basic review of the numbers and demographics behind the interviews. Looking at these we will be able to draw some general conclusions about the group as a whole.
In a second part I’ll publish in a week or two, we will dig into the questions and list the top learnings/my general conclusions from 100 millionaires.
I find this stuff to be very interesting and hope you do as well.
Just for the Record
Let me begin with a few caveats/clarifications:
- The data I’ve collected is not scientific information. It was never meant to be. It was simply a series to learn from the wealthy how they became wealthy. The millionaires I’ve interviewed is not a random sample so we can’t extrapolate our findings and say they represent all millionaires.
- That said, having read The Millionaire Next Door
, The Next Millionaire Next Door, and Everyday Millionaires (an upcoming book that I’ll be covering in a couple posts once it is released), I can say that the findings from our 100 interviews are very, very similar to what large-scale, professional surveys have seen. - The information I’ve gathered is directionally correct but not precise. People answer the questions in different ways. Plus sometimes there’s conflicting information within an interview (for instance, what interviewees give as their savings rates rarely matches the calculations when reviewing their spending and income.) Given this, I had to read between the lines many times and make some judgements about what’s actually going on. I’m fairly good at this and think I’ve come close to getting it right, through there is surely a margin for error here.
- Not every question is answered by every interviewee, so some of the numbers don’t line up perfectly. Sometimes interviewees forget a question or simply don’t want to answer it. And we’ve changed questions a few times over the series, so sometimes a question didn’t pop up until we were 20-25 interviews in. If there’s a discrepancy in reconciling some of the numbers, this is likely the cause.
- I won’t address every question every reader might have about the interviews. I focused on the questions/answers I thought were most meaningful and in which I was most interested. If you see something you’d like to know, feel free to plow through all 100 interviews and get the info. š
- I’ll use median numbers throughout this review. Averages are almost always higher as a few very high individuals skewed averages upward. That said, I’ll use the word “average” because it’s more common in English but the numbers are actually the medians. And in some cases I’ve listed the average numbers just for fun/perspective.
, 
, and 
(an upcoming book that I’ll be covering in a couple posts once it is released), I can say that the findings from our 100 interviews are very, very similar to what large-scale, professional surveys have seen.With that said, let’s get into the facts…
The Numbers from 100 Millionaire Interviews
Here are the averages/totals based on various measures:
- Age: 49.5
- Sex: 90 of 100 men
- Married: 93 of 100 currently married (many were divorced and remarried)
- Children: 2.0
- Net worth: $2.3 million ($2.9 million average)
- Household Income: $250k ($294k average)
- Main income source: 91 of 100 worked a job/career
- Almost half had a side income of some sort with real estate being the top choice
- Annual spending: $90k ($107k average)
- 46 of 62 did not have a budget (newer question, so we only had 62 responses)
- 31 of 62 reviewed their portfolios daily
- Age when they reached $1 million net worth: 41
- 37 of 62 worried about healthcare in retirement
- 40 of 62 gave to charity
- 39 of 62 have no estate plan
Some interesting stuff, huh?
Details and Thoughts on the Numbers
Here are some general thoughts on the numbers above as well as some color commentary:
- Yes, the vast majority of interviewees have been men, but the vast majority are also married, so we really have as many women millionaires as we do men (I would consider that a couple with over $1 million makes them both millionaires).
- If you add the net worths of the millionaires we’ve interviewed it comes to $295 million! That’s pretty impressive! The actual numbers are a bit higher as some interviewees didn’t include the value of their home and/or only counted liquid assets.
- If you add the annual salaries of the millionaires we’ve interviewed it comes to $29.6 million! Again, pretty impressive. It’s worth noting that many are dual income families, not just one person bringing home the entire income. Also, these numbers do not include bonuses as those can’t be counted on in any given year. That said, when they do happen, they can be substantial.
- Everyday Millionaires surveyed 10,000 millionaires and found that most became millionaires working in a career/job, not as a business owner. We found the same thing (this is why I focus so much on growing a career). The most common jobs listed in our interviews were business (a variety of positions — 71); engineer (7), and doctor (9).
- Millionaires added to their good salaries with side incomes. They earned their initial money through their careers, saved a good amount of it, then invested it in ways that helped them earn even more — and the earn-save-invest cycle thus became even stronger.
- There’s a huge gap between earning and spending — as you might imagine. Savings rates were very high, though probably lower than these numbers imply. Some interviewees didn’t count taxes and other expenses, making these numbers a bit muddy.
- I was very surprised that so many didn’t have a budget. These probably fell into the same pattern we did. We had a budget for the first several years of our marriage. But we eventually became so good at earning and controlling our spending that a budget wasn’t needed. Could we have saved more with one? Probably. Was it worth maintaining one once we had things under control? Probably not.
- I was also surprised that millionaires checked their portfolios so frequently. Generally that’s a bad problem as people who watch too closely often make emotional market moves that end up not being in their best interests. But these millionaires seem to be ok with it.
- Everyday Millionaires found that the average age when people became millionaires was 49. Our group was significantly younger.
- Healthcare issues are by far the #1 concern millionaires have about retirement. I’m thankful that we’ve found a good solution to this. If millionaires are so concerned about this issue, imagine the challenges it creates for the average American.
- Yes, most gave to charity, but some of the percentages were low. Overall, I was surprised that millionaires didn’t give more considering their higher incomes.
- Doh! Most do not have an estate plan. Even those who said they had talked/thought about the issue often did not have a formal plan.
Those are my thoughts/conclusions, what do you get out of these numbers?
Stay tuned for the second post in this series when I’ll dig more into the general findings around millionaires and their habits.
P.S. For those who prefer a video version of this post, see the ESI Money YouTube channel.
The low giving to charity is what is very concerning to me. I guess itās good that the numbers show I wasnāt jumping to the wrong conclusion ?. But really bad overall. I noticed that quite a few non givers or low givers did say they knew this was an area that needed work. At the same time many seemed unconcerned or even gave dumb answers about charities not using the money for the intended purpose. While this does happen, with the amount of information available to people now and sites like Charity Navigator, I was shocked by smart people giving such a dumb excuse.
Giving certainly helps those in need. The not so secret secret about giving is that it can help the giver be a better person. The non givers are leaving a lot of capital on the table in regards to their soul or karma or whatever you call it in their belief system.
I agreed wholeheartedly. Those who are blessed enough to be millionaires would do well to share with those in need.
Nichole, I also completely agree with you. This is a very important aspect of our lives, being able to give back and something we are teaching our children. I also am disheartened by those who say they don’t think charities will use the monies properly. As a family, we support specific charities that we are also involved with. In these cases, we know that 100% of the dollars (no overhead, no expenses) are used for the recipients.
I would encourage all who read these articles to consider having a plan to give back (time and money), just like how non-savers are encouraged to start small, how about starting with 1% of gross income and keeping building each year?
There is no measure for the amazing feeling of knowing you are doing something to help someone in need. We donate anonymously, so the feeling is not public acknowledgement, but personal fulfillment.
Cheers, on the is weekend of giving thanks!
MI81
I agree that the lack of charity is surprising and also somewhat disheartening. I think that a lot of these folks think that they will be more in retirement like volunteering at their church, etc., but the most impact people can make is to give generously while they are employed, even if it causes them to postpone retirement by a year or two. It’s foolish to think that volunteering at your church a few hours a week can have the same positive impact on the world as donating $30K/yr (roughly 10% of average listed above).
I recently read a book that radically changed my thinking about charity. It’s called “Doing Good Better”. I highly recommend it. Both the book, and the website Givewell (mentioned throughout the book) have convinced me that for about $3500 directed to the right charity, a life can be saved. These claims are backed up by facts (and some assumptions) and clear calculations. As someone who always used Charity Navigator to vet charities, this book really made me think about what the best use of our $$ was. The conclusion the book drives to (and I agree) is that the best use of $$ is to direct my charitable giving to fight malaria in Africa.
If these millionaires contributed 10% of their salary each year to charity, they each could save about 8 lives a year. Surely we can all agree that saving lives is more important than retiring a year early.
As a millionaire myself (not interviewed yet) I will share that I do give a lot, but the IRS would never know. My charity goes to my extended family who are struggling. Thereās no paperwork, no receipts, no tax deductions … but many thousands each year go to their health care, dental care, housing, transportation, education, school supplies etc.
It would be a bummer to be judged by this community for insufficient charitable giving, because it really depends on how ācharitable givingā is defined.
Yes, I wish the level of giving were more too. Thanks Nicole for broaching the subject. I’ll encourage more giving with some practical advice: Use a donor advised fund (DAF). We opened one about four years ago and have benefited from it greatly. Here are some key advantages:
– Central management. Virtually all of our giving is funneled through the DAF. This makes knowing what we’ve given super easy. It also makes tax time a snap because our DAF is the only “charity” that needs to be listed for the IRS.
– Avoid capital gains. This is key for us because we have a fair amount in appreciated securities. A DAF simplifies the whole process because the charity doesn’t need to have a brokerage account to receive the benefit; your DAF provider handles all that so your charity just receives cash money.
– Paying it forward. Sometime after opening our DAF our financial adviser (don’t judge :^) ) pointed out this additional advantage. You can stockpile more money into your DAF when your income is still high and later use those funds for giving when you’re retired. For us this means we contribute 50% of our income to the DAF and end up paying very little in income taxes.
– Funds can be invested. Our DAF has a handful of %equity/%bond portfolios so we still can benefit from the market.
These are the key advantages for us. I’m sure you can use google to find even more for your particular situation.
Very interesting!!!
Thank you for once again moving the bar up āā looking at metrics helps bring in a new perspectiveā- again, very interesting and very helpful.
Age: 49.5
Iām 63
Sex: 90 of 100 men
Male
Married: 93 of 100 currently
Yes!
married (many were divorced and remarried)
Married, never divorced
Children: 2.0
2 children as well
Net worth: $2.3 million ($2.9 million average)
Over $3mil and countingā 2 years until we retire (both me and my wife)
Household Income: $250k ($294k average)
$396K is our current status
Main income source: 91 of 100 worked a job/career
Job/career in education
Almost half had a side income of some sort with real estate being the top choice
I had multiple side hustles over the years āā main side hustle was and remains real estate.
Annual spending: $90k ($107k average)
Currently, we spend about $100K per year.
46 of 62 did not have a budget (newer question, so we only had 62 responses)
No budget for us ā-
31 of 62 reviewed their portfolios daily
Currently, I review about 2 to 3 times per week.
Age when they reached $1 million net worth: 41
I think I was 57
37 of 62 worried about healthcare in retirement
Not sure Iām worried, but Iām sure thinking about healthcareā- a lot
40 of 62 gave to charity
Some and needing to do more. Area of focus for me.
39 of 62 have no estate plan
Plan in place and we have yearly meetings to maintain focus and executionā-
What do you two do for work that brings in nearly $400K per year in income?
Iām a retired educator with over 30 years in the system ā-
my wife is a speech pathologist currentlyā-
For the last 5 years, (yes, I went back to work) Iāve been working for an Energy company, as president.
Thanks for the response!
āļøāļøāļø
The charity and the estate planning numbers are the most interesting to me.
ESI, did you have numbers on the percentage given to charity for those that did contribute? That would be interesting to know as well.
I wonder how much of a “scrooge factor” there was in these people getting to their number. I certainly know that if I didn’t give 10% away my student loans payments and general wealth building would have increased dramatically.
TPP
Sorry, I do not. I don’t ask percentages and only so many provided them, so the answer, even if I had it, would be based on such a small sample that it wouldn’t be accurate.
Have been curious about the numbers you will compile from your 100. I’m one of your readers that is most interested in the Millionaires with more normal middle class salaries. I do not fit in your classic M100 categories. I’m 55, divorced female without kids with a 90K income and joined the Millionaire club this past summer. I used to look at my holdings via Personal Capital daily but now check it out a few times a week. I still use the paycheck to paycheck budgeting system that I have always used. Budget out for all known and emergency from each paycheck just like my Mom taught me when I was a teenager. When what I have allotted is gone from the category then I do not have money to spend. So I live in a paycheck to paycheck world but family and friends have no idea of my investment portfolio. Also, have a game to see how much I can not spend in certain categories and then send that saved amount to my investments. As for charity, I give small amounts cash weekly to different groups, when I feel moved I send money to people doing good deeds to others and I am sending money to a friend going through cancer treatments. I also donate items on a regular basis and freely give my time weekly.
As for the estate plan, I have the beneficiaries in place that do not know that they are or how much they will be getting. After very narrowly being missed being hit on my side of the car by a driver under the influence, I now physically feel the need to get my estate plan in place with Will, Living Will, etc. Have the name of the attorney and that is my January plan.
Hi Debbie. Sounds like youāve done quite well and I would love to here more of your story…maybe youāll do one the Millionaire Interviews here one day.
I donāt fit the typical millionaire either and finally decided to do the Interview (MI#99) because I think diverse perspectives are beneficial to us all. My situation is much like yours; divorced woman, making less than 6 figures.
https://esimoney.com/millionaire-interview-99/
MI#99, you were one of my favorites. When I was reading your write up, I was thrilled to have someone like me! Agree with you regarding college education. I went back at 29 once I finally had a clue what I wanted to do. My degree and professional license opened my world to choices and freedom. Still had to work darn hard in the beginning years but I have always had job market security.
My retirement goal appears to be very similar to the direction you are going with helping others with financial literacy. Would love to be involved with a community based program teaching people the basics of financial control with the importance of budgeting with future in mind, how retirement savings is a must, etc. I am always so surprised when my friends in 30’s-60’s do not understand the bare bone basics. Over and over again I keep finding people think maxing out their retirement funding at work is putting away the percentage needed to get employer match. At the end of my students clinical rotation with me, I always try to do financial common sense education with them. Always surprises me just how little they know.
This was a great idea summaring all the data from 100 interviews.
I too am guilty of not having an estate plan (do have a will) but that is something I need to correct. Hoping to do a revocable trust at one point but again it is so easy to push that down the road instead of actually sitting down and getting one done.
Can’t wait to read the part II post
Thanks ESI for summarizing the 100 interviews for us, I assume that was quite a task!
While reading the all the interviews I was getting already a good feel for the averages.
Quite funny as the results contain some universal truth. We are living in Germany – yes different system more tax, cheaper healthcare etc. – and mz wife and I became millionaires this year. Age 39, married, 2 kids – twins so we are quite busy š – simple employees earring combined aprox 250ā¬ pa but living rather frugally. Well at least more frugal than our friends.
So this makes us the average millionaire, only real difference might be that I started to invest quite aggressively in Private Equity. However I learned via the interviews that we donāt need to take that additional risk.
The only question I constantly struggle with is rent vs save. @ ESI: what would you do? Continue to rent for 1.4kā¬ per month incl utilityās for our apartment or by a starter home for 1.3mā¬? We live in a super expensive urban environment and still have a old contract. However the kids will grow fast and 1200sfeet will become small some at some point.
Please keep up the amazing the interview, the are quite inspirational even if living in Europe. FYI have send many friends over to your blog.
Best regards and let me know if you want a millionaire interview from Europe š
My view has changed on this over time. I now think:
1. If you want to minimize expenses and are “ok” living in a rental, it’s generally the best financial option for most people.
2. If you have the money, want the extra benefits that come from home ownership, and are willing to spend more, then perhaps a house is for you.
From there, it’s a completely personal decision.
Anyone else have a different opinion?
Also, would love to interview you! Send me an email and we can get it going! š
I always love this type of data.
As other noted the charity numbers are a bit concerning. The numbers do line up with other sources despite self selection.
Our stats lineup pretty well with the averages except Iām only 37 and we donate an acceptable amount.
Interesting stuff!
Thinking this is a typo – “Everyday Millionaires found that the average age when people became millionaires was 49. Our group was significantly younger.”
(you’ve listed the average for the 100 Millionaires as 49.5) ?
The key words are “when people became millionaires.”
If you look above, our group first became millionaires when they were 41.
Oh duh…thanks! š
My mom,single parent of 4 is a multi milloinaire. She never made much more than minimum wage. I became a multi millionaire aping her real estate interest. I don’t contribute to charity because I don’t know what healthcare and retirement plans will be available for my 2 kids and my wife and I. I think liberal politicians will ultimately resort to socialism policies that will pilfer the savings of anyone who responsibly CHOSE to save and invest.
Itās interesting that youāre worried about paying for health care at the same time worried that a solution will be implemented so you donāt have to worry about it any more. All developed countries in the world use a socialist system to pay for health care and it costs less per person and they get better outcomes.
Socialist is a bad word in my eyes. Donāt trust govāt run health care. My knowledge of the SS system and Medicare has me frustrated beyond belief. Plus I know plenty of people from Europe and Canada that donāt love their health care although Iām sure some like the āfreeā program.
I have never seen any government run program that is as efficient as the free market. Further I think there is no one more qualified to decide what to do with money as the person who earns it.
Did’t you make your millions as a singer?
The amount that are ādualā income seems interesting. Itās been a while since I last read the Millionaire next door books but donāt think any of the millionaires interviewed were dual income, and that was only 20 years ago……
Other take away is finding people with $2-$3mil seems pretty easy today. This seems to high light the obvious that a $2-$3mil net worth today is much different than it was in the 90ās…..
While still very impressive I almost fell this there is a new junior class of millionaires.
According to Wikipedia, there are 15 million US$ millionaires in the world and 584,000 US$ multimillionaires worldwide.
So a net worth of $1 million is still pretty rare and $2 million+ even more so.
Source: https://en.wikipedia.org/wiki/Millionaire
Thanks youāre making me feel better about our achievements!
I set a goal of 1mm in 1980. With inflation, according to cpi calculator, I need over 3mm in today’s dollars to have the same purchasing power as 1mm in 1980.
Two sides on a coin as it relates to giving. Mrs. r2e and I provide both cash contributions and labor volunteer hours to organizations. We end up giving far more in volunteer hours. We don’t put a value on this as we consider it a priceless experience. I do not think I mentioned this part of giving in MI #97.
Appears that a big lesson is that even Millionaires (at least those 100) need to get their estate planning in order. I am in the minority percentage on this one.
I do not give to charity. In my 20’s and 30’s I too volunteered MANY hours. I do however, keep rents nearly 25% below market for my tenents,most of whom are low income or otherwise needy.
Ugh, I am so average, but I guess this is one time I am completely OK with that. Thanks for crunching the numbers.
I am a little surprised by the high ($250k+) average salaries. Obviously it makes it easier to become a millionaire, but I donāt know if that fits in with the typical āmillionaire next doorā profile. I may be biased due to being a single income household much lower than the average and still hitting he millionaire mark.
As others mentioned, the relatively low percentage of charitable giving is a little puzzling to me.
Nice summary of an inspiration series. I’d love to go back and re-read certain interviews of people with a similar stats as myself. Do you have an index and if not, would you consider doing one; age, income, NW.
Do not have one and probably won’t do one. It’s a push for me to come up with four new posts a week as is since I am retired after all. š
So I’ll put this request under the statement I made early in the post:
“If you see something youād like to know, feel free to plow through all 100 interviews and get the info.”
That said, maybe if I get to a much larger number of them (like 300 to 500) I’ll hire someone to do it all.
I will speak to the giving piece from just my perspective that perhaps will resonate with others. I have been investing for more than 30 years and been married for 25. Both my wife and I made six-figure dual incomes all of these years. My income has been cut back as I became involved in a startup but my wife continues to do well.
We focused exclusively on building our net worth most of these years. Only recently have we become convicted to share and give as we should, of both time and money. We now tithe 10% of our gross incomes to our church and make several donations in addition. We provide monthly support for 3 children in India and one in Columbia and a program for an adult male in Africa. We also give monthly to a favorite Christian radio station and to various other projects on an ad hoc basis. In addition, I am getting involved with a horse ranch that works with at-risk and special needs kids so this is where some of the volunteer hours will come in. We help our mothers out with unforeseen expenses when needed.
I’m no saint but I’m trying to do what we feel is right with both our time and our money. I wish we would have done more along our ESI journey but I guess this is one of those times where you say, “better late than never.”
Is there a way to make these easier to search? Would love to be able to easily find the youngest interview, or just people who work in finance etc
See response above…
https://esimoney.com/millionaire-interview-68/ This guy is 30 and the youngest I have found so far.
Just this morning I thought:
“Wonder when ol’ ESI is going to post the stats from the ‘100 millionaire’ series?”
Thanks for posting and looking for #2 soon.
ESI,
Just this morning I thought:
“Wonder when ol’ ESI is going to post the stats from the ‘100 millionaire’ series?”
Thanks for posting and looking for #2 soon.
That’s “VERY ol’ ESI” to you! š
This is so fascinating and so frustrating. I am constantly struck by how inconsistently people give to charities when they’re looking to better themselves financially. Though, I have run across a few people who tithe VERY generously without classifying that as giving in their budget.
Interesting!
(Also, I suppose the real question is can we change this, you know?)
For those of you wanting to see millionaires give more, here are my thoughts on the subject:
https://www.physicianonfire.com/giving-financial-independence/
The thing that stuck out for me was the no budgeting part. My wife and I had a outline of a budget, and the habits of just not spending if we don’t really need it. Of course it helps that we have high earnings, but are in our early 40s and crossed over the $1,000,000 mark a few years ago. The bull market and a high savings rate helped there.
The thing that surprises me when I talk to people, and something that is not on your list, is the whole DIY thing. Within the bounds of time and my skill set, I do a lot of my own work around the house. It’s surprising to me the number of people who don’t. I cut my own grass, blow my own leaves, and clear my own snow. Those things in total add up to thousands of dollars each year. In my area, we have lots of old trees, so power outages, regardless of season, is a regular occurrence. We lost power for 8 days total in the last 12 months in 12 hour to 3 day episodes. To deal with that, we purchased a home generator. Instead of paying $10,000 to $15,000 for one of those whole home natural gas units, we purchased a rolling generator that costs about $1,000. We had to add another $1,000 to have an electrician install a sub-panel to work with it. Sure I have to pour gas in it, and to change the oil in it; there are different oil weight requirements depending on the season, but that saves us $8,000 to $13,000 in initial costs, and several hundred each year in maintenance. There are a lot more such tasks that I do to get us additional savings, even if we paid to have new wood floors installed this year. It makes those things possible. I suspect I am not the only one who feels this way, and does these tasks.
I agree. Doing things yourself is a great way to save. And itās incredibly rewarding. Like you I do my own yard work, leaves, snow clearing, etc. I also have a small 2000W Honda generator for the few times we loose power. Itās enough to keep the refrigerator running, use some lights and use my coffee maker…all critical items. Lol.
I do a fair amount of home repairs but nothing too crazy. I did tons of interior painting in the last year and Iām certain Iāve saved many thousands of dollars just there. Had to replumb my entire house and did most of the prep myself saving several thousands there too. Iām not shy about spending money for some things but there are lot of crappy contractors out there. You are 100% correct about the value of sweat equity. But… you wonāt catch me redoing my roof!
I do not budget in the formal sense. Friends of mine do not budget either. When you live a modest lifestyle – you ARE thereby budgeting. My properties cannot be budgeted. I have always saved by doing most of my own repairs and all of my management.
Me likes a good summary. Not surprising: 90% men… dare I say (white) men. I am actually pretty thrilled that most were from careers not business owners. I would suspect that because people forget how many businesses fail. And how long it takes a regular business to reach millionaire status. I’m unsettled about age 41… it seems so old eventhough I know it’s not being that I’m about to be 35.
I’m always surprised how much growth people (read: white men) can see with their career and that it’s not dependent necessarily on a particular degree or college or being a doctor. Though those individual pathways can be difficult to replicate.
Thanks for publishing this recap and appreciate the opportunity to take part of it.
The charitable stats are interesting – I can speak from personal experience that we give *some* to charity, but not to the level our Net Worth or Income says we should. We’ve been hearty accumulators leading up to financial independence and have been focused on hitting a certain number. Charitable gifts detract from that number and I can’t say it was easy watching $10,000 leave our investments to fund a Fidelity Donor Advised Fund. I am optimistic our donations will grow with time, but we will see.
I’m not surprised most MI folks don’t have a budget. We manage spending at point of sale. Do we need it (vs want) and is it worth it? If you have discipline and intuitively feel you are wisely spending, we buy it or don’t buy it at point of sale. I think most MI folks already have built in intuition on prudent spending and don’t need/want to do a tedious budget. For example, I review our credit card spend every month (to check for fraud) and don’t ever regret any purchase and never check to see if I’m in/out of budget.
I read the ESI blog on healthcare ministries but do not plan on going that route. We need catastrophic care in case we need millions of dollar in care from illness like cancer, Alzheimer, etc. with expenses that can span for many years. A $1M cap and no legal protections from getting kicked out of a plan when you most need it is very concerning. We don’t mind paying for medical expenses up to say $25k/yr. We will just take it out of the travel budget (since you can’t travel if you’re sick anyways). By analogy, we buy liability auto insurance (no collision since our cars are paid off an not that nice) with the highest deductible possible but over-protect with umbrella insurance. The first $5k we pay out-of-pocket and have done so only once over the past 15 years when my wife dinged a car in a parking lot. So we rather pay for any small medical expense and only need medical insurance for the catastrophic. To me, this is what insurance is for and if you can self-insure (e.g. go without), you’re better off statistically. I have yet to see a good plan that covers us well in this capacity.
We don’t give much to charity yet. I’m sure most folks will say it’s a cop out (maybe it is and I’m just a selfish prick) but our logic is that until we take the time to research good/efficient charities that align with our values, we look at it as if we’re investing our money for them so when we’re finally giving, we’re giving more because we’ve invested it prudently (yeah, I know about the tax advantage argument). We can’t take it with us and our kids should only receive so much before it becomes poison so at some point, the money should get put to good use.
Really wonderful recap of the commonalities of ESI millionaires. The series as a whole is just fascinating. Kudos to you on the entire series.
As a participant and an avid reader all 100 posts, thank you!
I will comment on the charitable giving thread that seems to have so many peoples attention. Financial charitable giving is only one form of giving. Giving of one’s time in terms of volunteerism throughout one’s community is another form. I believe it as equally important as financial charity. Money, after all, is not everything. I think that is another common thread in most of these interviews. š
Interesting point, but I disagree. Think about it this way:
What do you think would have more positive impact on the world:
Option 1): I work 2000 hours a year (40 hrs/wk times 50 weeks) at a large company and make $100K/yr. I have a talent for my career and can probably do it better than someone else. I also know that if someone takes my position at this company, then will not donate all their earnings to charity. Therefore, I am very valuable (from a charitable perspective) in my job. I donate all of my salary (for this example assume I take home all $100K) to a professional charity that has an entire team of experts dedicated to identifying the most beneficial ways to help those less fortunate. If I use the Givewell website, their calculations indicate that my $100K could save nearly 30 lives in Africa if donated to prevent malaria.
Option 2): I retire and volunteer for 2000 hours a year, essentially a full time job in retirement (Most retirees will never come close to volunteering 2000 hrs a year- it is retirement after all). Suppose I volunteer at my church or a local food bank. Do I really save lives? Am I an expert on food bank effectiveness or ways to make my church more effective through charity? The answer is very likely no. If I don’t volunteer at the food bank, will there really be someone who goes hungry? Won’t someone else just volunteer in my place or work longer hours? I may feel good that I “helped”, but would people really die because I didn’t volunteer at my church or food bank? Very likely no.
It seems like a clear cut argument that financial donations trump volunteering. I recommend that you read the book “Doing Good Better” or researching the concept of Earn to Give.
I don’t buy the “I’ll volunteer a lot when I’m retired” argument anyway.
I have NEVER seen anyone implement it. They use it as an excuse for not giving money now and then find other things to occupy their time once they retire.
I’m not saying it doesn’t happen, just that I have never seen it work this way.
ESI- how did you reconcile your desire for retirement vs. the knowledge that if you kept working and donated your $$ to charity, it would have a big impact?
As someone getting close to early retirement, I’m torn knowing that I could keep working and donate large sums of $$ to charity?
These two posts cover most of my thinking/background on the subject:
https://www.physicianonfire.com/giving-financial-independence/
https://esimoney.com/giving-fit-financial-independence/
One big key for us was starting early and developing giving into a habit. If you do that, it becomes second nature and as you make more you give more.
MUCH harder to go from a non-giver to a giver once you are wealthy IMO, that’s why it’s rarely seen.
Your website blog is really helpful. Thanks for doing this and I really enjoyed the analysis of the 100 MI’s. I look forward to hearing more and keep up the great work.
I find from most of these millionnaire interviews i’ve read that they all invest in real estate, shares/bonds etc. same methods.
Do we have some statistics of average ratios of investments in these areas?
No, that is not a question I ask.
The interviews say it all. ESI was nice enough to put some data together but all the necessary ingredients are there in black and white. Itās not magic. Work on yourself to get the āEā going. If āEā isnāt there work on āSā and āIā. Many seem to do well with Index funds for investing.
WRT Charity I now look at it like investing or saving. Gotta start somewhere. Try doing a little more or if you havenāt- just start with a little for now and add more as your wealth increases. Thatās what Iām starting to do. I think many of us get into the mindset of- I need to get to X dollars for me and my family before I can do more charity. That was my thinking till very recently. ESI is influential!
It’s interesting that most millionaires are working in the job and do not own a business. I’m wondering what is the reason. Do you have any good explanation?
Explanation for what?
Why business owners are minority among 100 Millionaire Interviews? Why most became millionaires working in a career/job, not as a business owner?
Because it’s harder to become a millionaire with a business than to grow a career?
We do a budget but it was ” Big Picture ” of our annual expenses. Took a year to develop and was jaw dropping on the amount we were (over) spending vs the income coming in.
Our goal now is to continue to reduce a line expense ( Example 1 vehicle = registration, insurance, maintenance, gas etc). By reducing the vehicle, that adds to our bottom line saving to close the gap on spending vs income.
Our goal is to get to a zero sum exercise of spend vs income without tapping into SS, IRA, 401, & investments principal. Now I know why the savings account kept going down.
Am age 60 and gave up the corporate gig at 56.
The most I made in one year and only one year was 126K. Am stung by all the income at 200K/300K+. The more you make, the more you spend ???
Regards,
I was very surprised about the number who had no formal estate planning. Especially with those kinds of numbers.
I had a former boss, who liked to say “you never know when you might get hit by a bus”. This was her mantra for having processes in place to carry on work processes, (‘work instructions’ as we call them in my present employment). I’ve carried that with me, and try to keep detailed instructions, account #s, beneficiaries, etc current for my family.
The two items that struck me as interesting, were the lack of estate planning and budgeting. Maybe from my career in law enforcement, where I saw death as a daily occurrence (not anything sensational, just routine car accidents, medical issues, suicides and old age) I’ve been on board with estate planning since my early thirties. There’s nothing enjoyable about seeing grieving family members attempting to look up funeral homes on the internet because they really have no idea what their loved one’s wishes were. That’s just the first decision they are faced with on removing the deceased from the residence, you can feel for them because you know they are not going to be prepared to deal with all of the financial decisions that they will be faced with in the coming days and weeks. On the topic of budgeting, I never really did it either until probably somewhere after 2M. I don’t really even remember what the impetus for the change to budgeting was but I feel that it really pushed our finances into overdrive once we started doing it. I think it really made finance a “Team Sport” in our family.
Re-read this one today, along with all the comments. Very interesting.
We are very average in comparison to the summarized data here. Where we are exceptional is that we have a will and living trust done and do some giving. Everyone should do it.
With respect to giving, we do that, but not as much as we would like. Getting our kids through college, launched into successful adults, and us retired and FIRE is still in the future. Currently the tank is not full enough to make all those happen with certainty. I have said when that is done and we know the plan all worked out, then with money we have to spare then the giving will go into over-drive. I frequently jokingly tell my wife that each year we give over $90k+ to one the largest charities currently in operation – The Federal Government. That organization literally doles out more money than it takes in each year to countless destinations! I am certain if my tax bill were reduced we would be able to give more, in addition to saving more. Realistically that will never happen so we just continue to work on the earn more side so that the 60 cents on the dollar they let us keep will accumulate into a larger pile and hopefully make our plan a great success and allow us to comfortably give more later.