When I started this process almost four years ago, it was a concept that I had initially developed for another site.
I liked it, so I made millionaire interviews a part of ESI Money.
I figured we’d get to 50 or so and if things went really well maybe 100.
We’re now at twice that and more are coming.
It’s been an awesome ride. I love, love, love hearing from people who have actually become wealthy talking about how they did it (in contrast to the mainstream media where we often see people who have little to no wealth writing about how to become wealthy.)
These millionaires take significant time and effort to share their stories with us and for that I thank them.
The principles are almost always the same (as we’ll see), but their journeys are unique, which makes them interesting.
In today’s post, I’m going to detail the stats behind the 200 millionaires as well as list three main learnings from them all (I bet you can guess what those are).
Just for the Record
As I’ve done throughout this process, let me make a few things clear. Here are my caveats/clarifications before we get started:
- The data I’ve collected is not scientific information. It was never meant to be. It is simply a series to learn from the wealthy how they became wealthy. The millionaires I’ve interviewed are 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, I can say that the findings from our 200 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 my 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 many interviews into the process. 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 200 interviews and get the info. 🙂
- I’ll generally use median numbers throughout this review. Averages are almost always higher as a few very high individuals skew 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.
With that said, let’s get into the facts…
The Numbers from 200 Millionaire Interviews
It’s almost scary how closely the numbers for the 200 millionaires are identical to the numbers we saw when I summarized 100 millionaire interviews. They are almost identical.
Here are the averages/totals based on various measures from the 200 millionaire interviews:
- Age: 48.5
- Sex: 171 of 200 men
- Married: 175 of 200 currently married (many were divorced and remarried)
- Children: 2.0
- Net worth: $2.3 million ($3.1 million average)
- Household Income: $250k ($363k average)
- Main income source: 183 of 200 worked a job/career (most of the others owned a business or invested in real estate)
- Over half had a side income of some sort with real estate being the top choice
- Annual spending: $90k ($112k average)
- 91 of 150 did not have a budget
- 65 of 147 reviewed their portfolios daily
- Age when they reached $1 million net worth: 40
- 87 of 148 most worried about healthcare in retirement
- 119 of 148 gave to charity
- 96 of 148 have an estate plan
- 81 out of 142 named “travel” as their secret splurge
- Their favorite books remained the same
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 $629 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. Can we get to $1 billion? I hope so!!!!
- If you add the annual salaries of the millionaires we’ve interviewed it comes to $71.6 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).
- Millionaires added to their high 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 the 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 a budget once we had things under control? Probably not.
- I was also surprised that millionaires checked their portfolios so frequently. Generally that’s a 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.
- Most have an estate plan. And yet there’s a pretty large percentage who don’t.
Those are my thoughts/conclusions, what do you get out of these numbers?
Three Big Findings
After 100 millionaire interviews I posted 13 Surprising Facts from 100 Millionaire Interviews and What We Can Learn from Them.
Today I’m going to comment on three. The main three. We’ll do this in typical E-S-I fashion, focusing on what millionaires have taught us about earning, saving, and investing…then adding in other thoughts at the end.
1. Millionaires earn.
They not only earn, but they earn a lot and in multiple ways.
Most started their careers at the bottom, earning salaries most people would consider low.
But from there they applied themselves, worked hard, grew in skill and knowledge, and turned their careers into money making machines.
These all combine to produce large sources of income that allow them to live great lifestyles and still save and invest a ton.
2. Millionaires save.
Yes, millionaires save, but they aren’t exactly living a frugal existence.
Because they have high incomes, millionaires are able to save a large percentage of their incomes (over 50%) and still live a very nice lifestyle (spending $90k a year). Many of these have no debt at all, so $90k without a house payment is a very high level of spending indeed.
We have to step back a bit because someone (I know they are out there) will say something like “I can’t save 50% of my income so I guess I’ll never be wealthy!”
Just remember that the numbers these millionaires are reporting is where they stand now — not where they stood 30 years ago.
Most started out the same place I did. They had a decent (not great) job, watched their pennies and dollars, and saved whatever they could on a tight budget.
Then as time went on their incomes increased at a faster rate than their spending. That’s how they got where they are today. They didn’t start out earning or saving a ton. It was years of work and discipline that got them where they are now.
3. Millionaires invest.
Millionaires take the excess cash they have and invest it which…either grows or adds more income (or both) making them even wealthier.
Their preferred investments are index funds (for growth) and real estate (for growth and income). But they also invest in dividend stocks and have side hustles now and then (most don’t currently have side hustles since their careers are so lucrative).
These continue to compound over time to create a substantial level of wealth.
Is Anyone Surprised?
Regular readers should not be surprised at these findings.
After all, this is the framework for the entire site — earn, save, and invest. (For those of you who don’t know, that’s what “E-S-I” stands for).
I didn’t come up with the name by accident. I had two advantages when I started this site that helped me get the concept right:
- I was already a millionaire and had talked to enough wealthy people to know the “formula” for success.
- I had written about finances for 20 years and had sorted out the must-dos from the other noise.
This is how I came up with the site name and philosophy which we have all discussed throughout the years.
That’s why it’s no surprise (to me at least — and likely to many of you) that this is what the millionaires we interview did to become wealthy.
As we go past 200 interviews and work our way to 300, I don’t see much changing. The stories will all be different, but the principles are going to be consistent. Earning, saving, and investing (over time) is the tried and true path to wealth.