I’ve done a similar video on this topic before, with the majority of the feedback being positive, but also with more backlash than I usually get on my videos. Maybe because money is somewhat a sensitive subject and I struck a nerve on a few people. But I’m gonna try to address some of the criticism of that, and shed some light on the fact that becoming wealthy might seem far off for most people right now, but it’s in fact a lot more doable than you might think, and I’ll explain what I mean in this video.
So let me throw some encouraging stats at you while I debunk some of the myths people believe to be true. So some of the more recurring comments I got in my last videos on this topic was “you have to be born rich to become rich, otherwise it’s basically impossible.
” Well according to Thomas J. Stanley who wrote “the millionaire next door”, 80 % of American millionaires are first generation rich, meaning the vast majority, were in fact not born rich. Here’s something that might be even more interesting about this. Most of these millionaires came from parents who couldn’t or wouldn’t supply them any financial support whatsoever. They were pretty much forced to learn to accumulate wealth on their own from a pretty young age. And let me break out another interesting fact for you – kids who got the most financial support from parents early in life, were the ones who accumulated the least wealth later on in life.
People also seem to think that if you’re a millionaire then you are a retired douche gloating your wealth in peoples faces for fun. It turns out that only 20 % of millionaires are retired, meaning 80 % of them are working, some even after they turn 65 often keeping their douchebaggery to a minimum, and most of them seem to really enjoy working with what they do.
Another myth is that you have to own a business in order to become a millionaire. Although this will certainly help if you can run it successfully, but it’s not necessary. 50 % of millionaires does not own a business.
Although these numbers apply to people in the US, which btw most of the viewers of my videos are from, chances are that it’s similar in your country.
This all means that if you’re not born rich, are relatively young and don’t own a business – you’re still in the run to become pretty wealthy, and I’m gonna explain the principles behind that.
It’s interesting how most non-millionaires, my self included some time ago, perceives what actual millionaires are like with money without actually knowing what they are like with money. That luxury lifestyle where excessive spending seems to be limitless. Now that might be a fair judgement based on how wealthy people are portrayed by the media, as lavish and ridiculous behavior makes for a more entertaining show.
But the truth about wealthy people is really not as entertaining as media wants you to believe, because millionaires often spend less money on cars, living and accessories than people who earn a lot less money. They are incredibly frugal and avoid spending money unless they have to or it’s on something of lasting value. And bare in mind now, I’m talking about actual millionaires and not high earning potential millionaires.
This was highlighted in the book the millionaire next door where they interviewed and did extensive profiling on a huge number of millionaires to determine who a typical millionaire is and what they do with their money. And when they first began studying how people became wealthy, they started by surveying people in the high end upscale neighborhoods across the us. Only to discover that most of those people in big houses with fast cars, were in fact, not wealthy at all. They then discovered that the people who has a great deal of wealth don’t live in the upscale neighborhoods, but instead lived happily in modest lower-middle class neighborhoods.
Now get ready for this one, a lot of people who earn high incomes are not actually wealthy, though it might appear so. This is because they tend to fail in accumulating any lasting wealth. You might consider a person wealthy who earns $300k dollars a year, drives a Porsche and wears a rolex along tailored fitted suits on a daily basis.
However if this person were to lose his job or something would happen to him making him unable to work, he would be dead in the water within a few weeks being forced to sell his possessions. He’s whole life is dependent on that next paycheck, making him stuck in the infamous rat race, perhaps a little more luxurious rat race. But make no mistake they’re still stuck in the rat race and are in fact not wealthy. This is the result of a hyper consuming life style where they spend their money in a ratio pretty much 1-1 with the income. Not a good idea if you want to accumulate lasting wealth, but it’s unfortunately very common. Here’s where the douche dick tag can sometimes be justified, because these people are more concerned with displaying high status and wealth rather than actually having it.
Now before you comment “what’s the point of being rich if I can’t spend money”, let me say this – Actually that’s a damn good question.
I’m only paraphrasing what great people have concluded a long time ago, but of course you should spend money and increase your standard of living, but just don’t spend excessively or you might also end up dead in the water.
Now I’m going to tell you some of the most common denominators among first generation millionaires that has guided them to become financially independent.
They live well below their means and are sure to have a good deal of their income set aside for saving and investing.
They spend a great deal of time and energy in allocating that earned money making sure they invest it wisely.
They believe that financial independence is more important than displaying social status. They don’t give a damn if they wear the coolest overly expensive hoodies, drive the newest car, or have a two balcony house as long as their plan on financial independence is intact. Aka they’re keeping douchebaggery to a minimum.