Millionaires have always been fascinating. They achieve what most people want to achieve (financial freedom and success in their business endeavors), but few people actually achieve it. So, what is it that makes millionaires different from the average person? There have been countless books and documentaries looking at the factors and characteristics of these ultra-rich people.
Luckily for us, they prove that none of us are completely doomed if we don’t have rich parents, as many millionaires had very humble beginnings. Here are the top 15 factors that make a millionaire, based on studies, surveys and the most trusted teachers of financial success. Once you read this, you’ll find that you have no excuse for not becoming a millionaire!
15. Diverse Investment Strategy
While saving your money is good, investing it may be even better. The richest of the rich all invest their money, so that they’re making more money off of the money they already have. This is known as passive income and it’s a wonderful thing. It allows them to have multiple streams of income and financial security. The millionaires of the world know that sometimes you have to make risky investments that will pay off in the long run but they don’t go dropping their cash foolishly. They know that they must try their best to avoid risks while maximizing potential rewards, and they carefully consider the risk to reward ratio of investments. They’re the ones that choose to invest in promising businesses or in real estate that will produce cash flow. They also favor the stock market. In fact, the World Wealth Report showed that in 2014, stocks overtook cash as the number one asset in portfolios of high net-worth individuals. But they don’t put all their eggs in one basket. Instead, they invest diversely and most of them (about 80%) enlist the help of a professional financial advisor. Nevertheless, they are actively involved in the decision-making related to their investments.
14. Self-Made Status
We all constantly hear about the Kim Kardashian and Paris Hiltons of the world that inherited a ton of money. But, don’t let this cloud your judgment; most millionaires are actually self-made. In fact, 67% of American millionaires are self-made and only 8% inherited their wealth. One 2012 study found that 86% of millionaires did not consider themselves wealthy growing up. Knowing this can be a source of inspiration to those who aspire to be wealthy or think that they need to find a long-lost rich relative to become a millionaire. Think about all the musicians you know that had rags to riches stories (Shania Twain, Justin Bieber, Eminem) or consider people such as Warren Buffett, J.K Rowling and Oprah. They are all living proof that with a great idea, the right skills and hard work, you can become a millionaire or even a billionaire from scratch.
13. Long-Term Focus
Practically every self-made millionaire earned their status by focusing on the long-term. Brian Tracy, expert on professional development (who is a millionaire himself), even says that this is the most important attitude for financial success. The wealthy invest and save their money instead of dropping ridiculous amounts of cash on short-lived purchases such as expensive sports cars or brand name clothing. They invest time into developing skills and furthering their education. While we’ve heard of people like Steve Jobs and Mark Zuckerberg dropping out of college and going on to becoming wealthy, the majority (85%) of Forbes‘ 400 richest people in America have a college degree, demonstrating their long-term thinking. The average professional person, according to Tracy, has a time perspective of 10, 15 and 20 years. This means that they consider how the decisions they make now will affect them in 10, 15 or 20 years and they plan their lives around their long-term goals.
12. Working Long Hours
All self-made millionaires got to where they are by working hard. Even the Kardashians, who inherited money, grew and sustained their fortune by continuing to work by selling beauty products, books and apps (hate them or love them, it’s a fact). It’s also curious that many millionaires (and even billionaires) continue working for years after they’ve done enough to be considered a legend in their field. Many millionaires also have multiple jobs, hence multiple streams of income. One such example is Jennifer Lopez who, on top of being a singer, worked as a judge on American Idol at the same time that she was working on the set of the television show, Shades of Blue. But it’s not just those in show business; even billionaire business moguls work long hours. Forbes asked 50 billionaires how many hours they worked and over half of them said 60 hours a week or more! Why work so hard when you don’t need to? For most, the answer is that they enjoy what they do and want to excel at it. Achieving financial success is so much easier when you enjoy your work because it doesn’t feel like a chore.
The wealthiest people are rarely, if ever, a one-person show. Even though J.K. Rowling, for example, wrote the Harry Potter books by herself, she had editors, consultants, writers, agents and publishers that helped turn her stories into what they are today. The wealthiest people make networking a priority. They attend events that help them to build their network and they surround themselves with mentors and like-minded people. When you have a strong network, you will receive help when you need it and you’ll have the opportunity to help others, too. Spending time with like-minded individuals, or other wealthy individuals, helps you to become more like them. It inspires you and alters your perspective on life and money. You may know people that often say “money won’t make you happy” or even “money doesn’t grow on trees.” These people should be avoided if you’re an aspiring millionaire because they can cloud your thoughts with negative beliefs. Financially successful people are optimistic; they don’t see money as out of their reach. They also don’t see money as all there is to life, but see it as a way to make positive things (like world change) happen.
10. Being Frugal
The wealthiest of people do some things that they can afford not to do. For example, Mark Zuckerberg’s closet is filled only with multiples of the same plain, grey t-shirt. Surely that man can afford a few expensive Armani suits. Warren Buffet, the billionaire investor, lives in the same house he bought for $31,500 USD in 1958! Why not upgrade to an over-the-top mansion? The wealthiest people in the world are often smart enough to save their money. Often, it’s not just the typical “save 20% of your paycheck” kind of saving, either. Rather, it’s being frugal to the point that they do things to save money that even most of us average folks don’t do, like use coupons or drive a 15-year old car. They understand and appreciate the value of every dollar they have and know that trying to “keep up with the Joneses” will only make you go broke (like the Joneses themselves probably are). The truth is that you don’t need many things in life. Many millionaires (and billionaires) seem to know this and are satisfied with financial peace of mind rather than looking rich. In fact, 55% of self-made millionaires achieved their status by saving.
As previously mentioned, the majority of America’s millionaires have college degrees. There seems to be a myth going around that college is worthless, citing Bill Gates as a prime example. But, the statistics show that this simply isn’t true. People with college degrees make significantly more than those without one, on average. Even when multi-millionaires are asked what factors contributed to their success, education is near the top. But, it’s not just about how many degrees you have or how highly ranked your school is; self-based learning is just as important. Steve Jobs is often cited as a billionaire who dropped out of school but what many people don’t know is that shortly after dropping out, he then “dropped in” on classes that he had an interest in, such as typography. A common trait among the wealthy is that they read a lot. Oprah Winfrey, for example, has a popular reading book club. College dropout and billionaire, Mark Zuckerberg, made a goal to read a new book every other week. This goes to show that the wealthy never stop learning and working on improving themselves.
Every successful person, millionaire or not, is ambitious. It’s their drive that leads them to invent unique products, build a successful business and become very wealthy. In fact, studies find that the self-made super-rich have a very strong desire to become rich. More importantly though, being ambitious is the trait that allows people to overcome failures (which are quite common in the business world). It’s this perseverance that sets those who become millionaires from those who do not. Think about one successful person you know. Did that person have a completely flawless path paved for them? Probably not. Even J.K. Rowling’s Harry Potter books failed to get published multiple times and Steven Spielberg was rejected from USC’s School of Cinematic Arts. Look at where they are now! Successful people learn from their failures and realize that failures make them stronger.
Creativity is a common factor among successful entrepreneurs. This allows them to come up with a great idea and sell it convincingly to others. Especially at the beginning of their journey, entrepreneurs need to be creative in their use of resources, as they may not have many. It’s this creativity that allows entrepreneurs to find ways around the obstacles they may face. Cultivating creative vision is one of Napoleon Hill’s 17 Principles of Personal Achievements. Expressing creative vision means being able to have faith in your ideas even in the face of criticism. It also means wanting a better future, not just for yourself, but for others as well. One such example would be creating a product or service that will help people (in any way possible) or improve the environment. We’ve seen countless millionaires and billionaires that express creative vision, including Bill Gates and Steve Jobs.
Self-made millionaires have high self-efficacy, meaning that they believe they can be successful in specific areas. They have the type of confidence in which they know that they’re not good at everything but they recognize their areas of strength. This leads them to focus on and pursue what they’re good at. They also believe that they can achieve their goals, including financial ones. Even when there are challenges, the high self-efficacy of self-made millionaires drives them to persevere because they know that by doing so, they will end up successful. This is important because if you believe that becoming a millionaire is out of your reach, you won’t even bother trying to become one.
5. Good Upbringing
Your childhood can serve as the foundation for the rest of your life. The things you learn about life growing up usually stick with you throughout time and you come to believe them. Millionaires agree that family values were important to them. The top values that were instilled in them while growing up were: academic achievement, financial discipline, work participation, family harmony and civic duty. That may explain why the majority of millionaires have an education, are good with saving and investing their money and give to charity. In a 2016 survey, most millionaires said that their families were encouraging while growing up and not hard on them when they made mistakes or failed. This makes sense because if their parents were discouraging, their self-efficacy wouldn’t be high.
Millionaires become millionaires by either being extremely frugal and saving or by selling something. A study called Rich Habits, which looked at 233 millionaires, found that the millionaires who sold something had more money than those who were fanatical savers, and it took them less time to accumulate it. It may not be too obvious at first, but most of the millionaires (or billionaires) that come to your mind do sell something. Mark Zuckerberg sells Facebook services, athletes sell their skills, musicians sell their songs, designers sell their clothes and writers sell their stories. It makes sense that selling something is a top factor of millionaires because people will always consume products and services that they want or need, so long as it’s accessible to them. So, maybe it’s time to start thinking hard about the next best invention.
3. Time Management
How do you spend your free time? Watching Game of Thrones on Netflix? Scrolling endlessly through your Instagram feed? Yep, that’s what most people do. But millionaires are like a different breed of people. They don’t waste time; they spend their time doing productive things that lead to an increase in their success and wealth. One simple thing that rich people do is that they dedicate 15 to 30 minutes every single day to thinking. Doesn’t sound too spectacular, right? But, it’s not just thoughts about what they’re gonna eat for lunch or what to wear to their next meeting (some, like Zuckerberg, don’t even spend two seconds thinking about what to wear). They brainstorm about their careers, goal-setting, their business relationships, problems, health, happiness and family. This helps them to improve themselves and solve problems. The rich also like to read to gain knowledge and are constantly improving their skills, which eventually leads to an increase in their wealth.
How many wealthy people have you seen that hate their career? Probably not very many, right? Oprah Winfrey always screamed with excitement during her talk shows and when you look at videos of the late Steve Jobs giving a presentation, his enthusiasm and the light in his eyes made it clear that the man loved what he did. He even brings this factor up in his commencement speech at Stanford, saying that his love for his work was the only thing that kept him going after he was fired from Apple in the early days of his career. Brian Tracy also lists “Do What You Love” as one of the 21 success secrets of self-made millionaires. It makes perfect sense, too. If you’re not doing what you love, how will you find the motivation to get up every morning for the next 20 years (at least) to do it? Most millionaires love what they do and will continue doing it for a long time (because they love it), which allows their wealth to continue to grow.
1. High Energy
According to psychologist James Gottfurcht, most wealthy people have a lot of energy, don’t need much sleep and are upbeat. Well, that makes a lot of sense! You won’t get rich by being a couch-potato. It takes a lot of energy to be able to work overtime (which most millionaires do) and still balance multiple other things in your life simultaneously. If millionaires didn’t have high energy, they would probably have to compromise certain things in their lives, such as networking or educating themselves on how to be more successful. Having high energy also makes them more likeable, therefore more attractive as business partners and as people in general. For example, most celebrities that you often see or hear about have high energy and are enthusiastic about their careers. If the opposite were true, they simply wouldn’t be motivated to put in all the long hours that they do and would burn out quickly.