A Woman Who Studied 600 Millionaires Found How Rich You Can Get Boils Down to 6 Things[tr]

But if you possess a certain set of characteristics, you may be more likely to become wealthy, according to Sarah Stanley Fallaw, director of research for the Affluent Market Institute. She co-authored “The Next Millionaire Next Door: Enduring Strategies for Building Wealth,” in which she surveyed more than 600 millionaires in America.

To identify characteristics most predictive of net worth, Stanley Fallaw conducted two studies that included a group of individuals with a net worth ranging from $100,000 to $1 million and a group of high- and ultra-high-net-worth individuals.

She found that six behaviors, which she called “wealth factors,” are related to net worth potential, regardless of age or income: •Frugality, or a commitment to saving, spending less, and sticking to a budget •Confidence in financial management, investing, and household leadership •Responsibility, which involves accepting your role in financial outcomes and believing that luck plays little role •Planning, or setting goals for your financial future •Focus on seeing tasks through to their completion without being distracted •Social indifference, or not succumbing to social pressure to buy the latest thing

Frugality came up several times during Stanley Fallaw’s research—many of the millionaires she interviewed stressed the freedom that comes with spending below their means. Being frugal was one of three key ways they achieved financial independence.

It also takes confidence to invest properly — instead of making investing decisions with your emotions, you should leave your investments alone and focus on a long-term investment plan, certified financial planner Shelly-Ann Eweka previously wrote for Business Insider.

But you can’t invest — or manage your own money — without accepting responsibility for the outcomes.

“[Millionaires] don’t count on anyone else to make them rich, and they don’t blame anyone else if

Sure it can help..but no one needs rich parents to be “rich”.

My family lived paycheck to paycheck despite being “middle class” as far as income was concerned. My parents had no financial smarts and just complained about the lucky “rich” people all the while spending what little money that had on cigarettes, alcohol, the newest TVs with cable and new cars every couple of years. My dad is somewhat comfortable but can’t do anything other than keep the lights on keep himself fed, pay medical bills and cable TV thanks to a small pension and SS. I support my mother outright because she can’t live on SS/Medicare...surprise. And she complains about how you can’t live on SS! I support her because it’s my duty...though it pisses me off. As a kid, I assumed the rich were lucky too.

Fortunately for me, a manager at McDonald’s back in the 70’s told me that, to be comfortable or even “rich” when I got older, I needed to learn to live on 80% of my take home pay, forever, and save the other 20%. He also told me to start reading about investing and how to accumulate wealth so that I wouldn’t need to work past 50 if I didn’t want to.

So I did. When 401K’s were available to me, I contributed whatever my employers would match and saved the rest in a savings account. When I was 18, opened an investment account and began investing into a diversified portfolio. When ROTH IRAs hit the scene I started investing all money not in an
employer matched ROTH 401k into ROTH IRAs, now with several firms.

I don’t have a college degree but I worked hard, educated myself focusing on personal finance and business with an emphasis on supply chain. In my 20’s I had roommates, drove crappy cars, worked two jobs for a few years saving ALL of that paycheck, didn’t blow money on partying (too often..), lived in modest homes or apartments and was basically very frugal. I ate cheap, didn’t buy expensive clothes, etc. When I could afford a home, I bought one. Then, shifting some of that 20% (sometimes 30%+) as an investment strategy, another, and then another.

When got married we continued the same strategy. When we had kids, my wife stopped working to be a stay at home mom.

Over the years my standard of living gradually increased. I have a bigger, nicer home now, on a lake, two new trucks, a small travel trailer and two boys going to college in a couple of years. I could pay for their education, but I’m not. They already have their financial plans in place and know what it’s going to take to be “rich”.

I’m 53 and don’t need to work. I do because I actually enjoy what I do (most of the time) but my plan to stop working at 55. I’ll sell my two rentals and my current home, which I own outright, and move farther out into a smaller custom built home and travel, hunt, fish...pretty much whatever I want to do and leave my boys something when I die.

Rich parents help, but aren’t the key to building wealth. Understanding personal finance, taking responsibility and living frugally is the key.

I’m ok on 5 of the 6, but I struggle with confidence.

Some of it is my wife is extremely risk adverse so I don’t want to risk the main kitty less I face the wrath.

The other is I tend to overthink things and hold off until it’s too late to pull the trigger.

I would have managed to be over the number by now, if I hadn’t changed my mind and paid for my daughters college. I wanted to prevent them taking a loan at all costs.

They’ve both agreed to payback 50% interest free - but that’s between them and my wife ;)

The absolute main driver for us was a very strict budget and extremely frugal lifestyle. Never carry a loan/pay interest more than absolutely must - double payments or more till it’s gone. We get to do things we enjoy by budgeting in an ‘allowance’.

Still clip coupons, 1 car is 16 yrs old, the other 7. Buy things second hand when it makes sense.

My multimillionaire friend was frugal to a fault...only drove cheap cars and drove them without servicing them until they died somewhere on a freeway. At which point, he’d call his secretary and have her tell the dealer to pick him up where he stood with a new (cheap) car with a full gas tank. He was literally too busy to have his cars serviced. Or to even think about it.

Just a great human being to know if you were on his right side. Very liberal democrat...but that was a couple of decades ago when they were not so evil. I don’t think. he’d support the baby killers now, as he lost his son to some disease when the boy was just a few months old and never got over the sadness.

...It’s possible to be a self-made millionaire. Self-discipline and patience over time is the key...

+1 on the whole post.

The patience over time is so important. I have tried to teach so many people that it is possible to "get rich slowly", but that get rich quick schemes usually end poorly. So far the only one I have convinced is DW. All others get a little bit ahead and suddenly develop a huge need for some new depreciating possession.

If they would learn to develop a need for a new investment instead of a car/remodel/better house they could become rich.

You shouldn’t deprive yourself totally when you are young. I don’t mean be totally extravagant but what good are millions if you are to old and arthritic to enjoy it?

It is perfectly possible to live life happily without spending excessively.

One of the things I am proudest of is my daughters stories about growing up. We went on family trips many weekends, but to inexpensive places. Almost always camping.

She still remembers that if we stopped at McDonald's I would tell her to get a hamburger, not a cheeseburger -- we had cheese slices in the cooler.

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