If you've ever dreamed of becoming a millionaire, you should know that doing so would put you in the top 2% of the U.S. adult population by wealth, according to recent research from The Ascent. You should also know that becoming a millionaire may be more attainable than you'd think -- just ask the 5.3 million Americans who qualify as millionaires today.
Of course, in some of those cases, it's more than possible that a lot of that wealth was inherited. And even when not, it's likely that some of today's millionaires had help getting to where they are -- perhaps their parents paid for a high-end education and gave them financial support in early adulthood to set them on a solid path.
But there are also plenty of millionaires today who got to that point on their own. They didn't inherit money or have CEO parents to set them up with high-paying jobs from the start. Rather, they made smart personal finance decisions independently that brought them to a good place.
If you're eager to become a millionaire one day, you should understand what it takes to get there. Here are a few habits self-made millionaires tend to uphold.
1. They don't upsize their lifestyles when their income increases
A big reason many reasonably well-off people don't ever reach millionaire status is that they fall victim to lifestyle creep. As their income rises, so too do their expenses. They take on larger mortgage loans, buy fancier cars, and spend freely because they can.
If you want to become a millionaire, don't keep taking on added expenses as your earnings grow. Instead, intentionally live below your means and bank the difference.
2. They're mindful of their spending
Self-made millionaires don't necessarily deny themselves every single one of life's pleasures. There are plenty of people in that boat who take a yearly vacation and enjoy other indulgences.
However, one thing self-made millionaires tend to do is spend their money mindfully. They put thought into larger purchases and make a point to spend their money on things or experiences that truly add value to their lives. They don't just buy things on a whim because they can.
3. They focus on long-term investments
Many people who become millionaires don't reach that point until later in life. That's because they spend many years saving and investing modest amounts that grow nicely over time.
Over the past 50 years, the stock market has rewarded investors with an average annual 10% return. If you were to build a portfolio of stocks generating that same return, a $500 monthly investment over 40 years would get you to over $2.6 million.
4. They believe in hard work
Because self-made millionaires get to that point without financial help, they tend to be people who hustle and aren't afraid of hard work. And if you're willing to make the effort to excel professionally, you, too, might eventually see your pay start to rise. That could, in turn, free up more money to save and invest.
You don't even have to wait to be offered a promotion at work to grow your income. You could take on a second job through the gig economy and boost your income immediately. From there, you'll have more options for investing.
You might assume that you need to be born into wealth to become a millionaire in your lifetime. But that's far from the truth. Many people work their way up from nothing to lots of wealth. And if you're willing to embrace and copy these habits, you may find that you're one day able to call yourself a self-made millionaire.
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FAQs
Self-made millionaires tended to rely on capital appreciation from investments — as well as salary, stock options and profit-sharing. Those who inherited their wealth were more likely to cite entrepreneurship or real estate.
What are the habits of self-made millionaires? ›
Self-made millionaires tended to rely on capital appreciation from investments — as well as salary, stock options and profit-sharing. Those who inherited their wealth were more likely to cite entrepreneurship or real estate.
What are the big four habits of millionaires foolproof? ›
Here are a few habits self-made millionaires tend to uphold.
- They don't upsize their lifestyles when their income increases. ...
- They're mindful of their spending. ...
- They focus on long-term investments. ...
- They believe in hard work.
A study published by Wealth-X found that around 68 percent of those with a net worth of $30 million or more made it themselves. Further, a second study by Fidelity Investments found that 88 percent of all millionaires are self-made, meaning they did not inherit their wealth.
Do 90% of millionaires make over 100k a year? ›
Ninety-three percent of millionaires said they got their wealth because they worked hard, not because they had big salaries. Only 31% averaged $100,000 a year over the course of their career, and one-third never made six figures in any single working year of their career.
What do 90% of all millionaires become so through owning? ›
Ninety percent of all millionaires become so through owning real estate.
What is the personality of a self-made millionaire? ›
The study found that rich individuals, i.e. people with a net worth of more than one million euros, had a distinctive personality profile when compared to the non-rich. Overall, they tended to be more risk-tolerant, open, extraverted and conscientious than the rest of the group.
How are 90% of millionaires made? ›
90% of millionaires made their money in Real Estate. I became a millionaire without owning a single property. But I own 6 small businesses that make me $725k/year. Here's why I prefer buying businesses over Real Estate: -- 1) Cash Flow The average rental property in the U.S. cash flows ~$300-$500 (some even less).
What are the 4 paths to wealth? ›
Here are the four paths that Corley identified.
- Saver-investor. The saver-investor path is a simple one: Consistently save 20% or more of your income. ...
- Company climber. A company climber by Corley's definition works for a big company and climbs the ladder to become a senior executive. ...
- Virtuoso. ...
- Dreamer-entrepreneur.
According to Entrepreneur, not having a budget is a common way that millionaires end up broke. These soon-not-to-be millionaires don't go over their bank statements or monthly bills to make sure that there aren't any unauthorized transactions or that they weren't overcharged.
The 10 things that millionaires typically avoid spending their money on include credit card debt, lottery tickets, expensive cars, impulse purchases, late fees, designer clothes, groceries and household items, luxury housing, entertainment and leisure, and low-interest savings accounts.
What is the average age of a self-made millionaire? ›
The average age of a first time millionaires is 37, it has been found. In data released by Betway Insider, the average age of a first time billionaire is also revealed: and is a little higher at 51. So, if you're not quite there yet, what can you do to make your first million?
How rare is 100k a year? ›
Over one-third of American families earn $100,000 or more
The U.S. Census Bureau found that 37.1% of U.S. households earned at least $100,000 in 2022. Here's a more detailed breakdown of six-figure income brackets and the percentage of households in each one: $100,000 to $149,999: 16.9% $150,000 to $199,999: 8.7%
Is $100 000 considered rich? ›
Many people may consider a $100,000 salary to be rich. However, “rich” is a relative term with a vague definition, meaning an abundance of wealth and assets. Much of it depends on where you live and how you use the income (spending vs. saving vs.
What mindset do millionaires have? ›
It includes a blend of confidence, courage, strategic thinking, resilience, and a relentless work ethic. Behind every successful millionaire is a powerful vision. Without a clear and compelling vision, it's easy to veer off course and lose sight of your long-term goals.
What is considered a self-made millionaire? ›
Each one of us starts out with a unique set of advantages and disadvantages, but self-made millionaires are people who reach high levels of wealth without the help of a large inheritance or trust fund.
What is a millionaire's lifestyle? ›
They focus on building wealth through investments in stocks, bonds and real estate. Live Below Their Means: Millionaires often spend less than they earn, leaving room for savings and investment. They avoid the trap of overextending themselves financially.
