curiousgirl's playground

Cover story in June 2007 edition of Smart Money:

• Having $1 million is no longer enough. Today, 1 in 12 U.S. households has at least $1 million stored in home equity and other assets. To enter nation's top 1%, you need > $5 million. Even then, there are ~930K in this category.
• Members of the nation's $5 million plus club share common characteristics.
  • They are active wealth creators. It's not enough to just put in $1K a month in your 401(k) plan at 7%. Though you will end up with $1 million adjusted at the end, you are still dependent on your annual salary and your daytime job.
  • They have a positive, can-do attitude. Follow your gut even when others might tell you otherwise. Utter persistence.
  • They are dedicated and passionate people. "Money . . . wasn't much of a motivator. Once you've got food in your belly and a big-screen TV, the mere prospect of more Benjamins probably isn't enough to get you leaping out of bed at 5am. Rather, rich folks often make their fortune after they make up their minds to solve a problem or do something better than it's ever been done before."
  • They come from more modest backgrounds. Only 10% of nation's $5 million plus club inherited wealth. Mostly came from working to middle class families and graduated from state schools.
• "Being rich means freedom: to spend your time as you please, to pursue your real interests, and to take a chance without risking utter ruin. Paradoxically, the road to riches often means acting as if you already have that freedom."

Seven factors of millionaires from Millionaire Next Door

1. They live well below their means.
2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
3. They believe that financial independence is more important than displaying high social status.
4. Their parents did not provide economic outpatient care.
5. Their adult children are economically self-sufficient.
6. They are proficient in targeting market opportunities.
7. They choose the right occupation.

1. Understand the key success factors our economy continues and will continue to reward: hard work, integrity and focus.
2. Never allow a lackluster academic record to stand in the way of becoming economically productive.
3. Have the courage to take some financial risk. And learn how to overcome defeat.
4. Select a vocation that is not only unique and profitable; pick one you love.
5. Be careful in selecting a spouse. Those who are economically productive married husbands or wives who had the characteristics that are compatible with success.
6. Operate an economically productive household. Many millionaires prefer to repair or refinish rather than buy new.
7. Follow the lead of millionaires when selecting a home. Study, search, and negotiate aggressively.
8. Adopt a balanced lifestyle. Many millionaires are "cheap dates." It does not take a lot of money to enjoy the company of your family and friends.

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