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Portrait of a Millionaire

Discussion in 'Free Speech Alley' started by kcal, Nov 2, 2008.

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kcal Founding Member

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ode to the robin hood progressives: meet your victims

PORTRAIT OF A MILLIONAIRE
Who is the prototypical American millionaire? What would he tell you about himself?(*)
* I am a fifty-seven-year-old male, married with three children. About 70 percent of us earn 80 percent or more of our household's income.
* About one in five of us is retired. About two-thirds of us who are working are self-employed. Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs. Most of the others are self-employed professionals, such as doctors and accountants.
* Many of the types of businesses we are in could be classified as dull/normal. We are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.
* About half of our wives do not work outside the home. The number-one occupation for those wives who do work is teacher.
* Our household's total annual realized (taxable) income is $131,000 (median, or 50th percentile), while our average income is $247,000. Note that those of us who have incomes in the $500,000 to $999,999 category (8 percent) and the $1 million or more category (5 percent) skew the average upward.
* We have an average household net worth of $3.7 million. Of course, some of our cohorts have accumulated much more. Nearly 6 percent have a net worth of over $10 million. Again, these people skew our average upward. The typical (median, or 50th percentile) millionaire household has a net worth of $1.6 million.
* On average, our total annual realized income is less than 7 percent of our wealth. In other words, we live on less than 7 percent of our wealth.
* Most of us (97 percent) are homeowners. We live in homes currently valued at an average of $320,000. About half of us have occupied the same home for more than twenty years. Thus, we have enjoyed significant increases in the value of our homes.
* Most of us have never felt at a disadvantage because we did not receive any inheritance. About 80 percent of us are first-generation affluent.
* We live well below our means. We wear inexpensive suits and drive American-made cars. Only a minority of us drive the current-model-year automobile. Only a minority ever lease our motor vehicles.
* Most of our wives are planners and meticulous budgeters. In fact, only 18 percent of us disagreed with the statement "Charity begins at home." Most of us will tell you that our wives are a lot more conservative with money than we are.
* We have a "go-to-hell fund." In other words, we have accumulated enough wealth to live without working for ten or more years. Thus, those of us with a net worth of $1.6 million could live comfortably for more than twelve years. Actually, we could live longer than that, since we save at least 15 percent of our earned income.
* We have more than six and one-half times the level of wealth of our nonmillionaire neighbors, but, in our neighborhood, these nonmillionaires outnumber us better than three to one. Could it be that they have chosen to trade wealth for acquiring high-status material possessions?
* As a group, we are fairly well educated. Only about one in five are not college graduates. Many of us hold advanced degrees. Eighteen percent have master's degrees, 8 percent law degrees, 6 percent medical degrees, and 6 percent Ph.D.s.
* Only 17 percent of us or our spouses ever attended a private elementary or private high school. But 55 percent of our children are currently attending or have attended private schools.
* As a group, we believe that education is extremely important for ourselves, our children, and our grandchildren. We spend heavily for the educations of our offspring.
* About two-thirds of us work between forty-five and fifty-five hours per week.
* We are fastidious investors. On average, we invest nearly 20 percent of our household realized income each year. Most of us invest at least 15 percent. Seventy-nine percent of us have at least one account with a brokerage company. But we make our own investment decisions.
* We hold nearly 20 percent of our household's wealth in transaction securities such as publicly traded stocks and mutual funds. But we rarely sell our equity investments. We hold even more in our pension plans. On average, 21 percent of our household's wealth is in our private businesses.
* As a group, we feel that our daughters are financially handicapped in comparison to our sons. Men seem to make much more money even within the same occupational categories. That is why most of us would not hesitate to share some of our wealth with our daughters. Our sons, and men in general, have the deck of economic cards stacked in their favor. They should not need subsidies from their parents.
* What would be the ideal occupations for our sons and daughters? There are about 3.5 millionaire households like ours. Our numbers are growing much faster than the general population. Our kids should consider providing affluent people with some valuable service. Overall, our most trusted financial advisors are our accountants. Our attorneys are also very important. So we recommend accounting and law to our children. Tax advisors and estate-planning experts will be in big demand over the next fifteen years. * I am a tightwad. That's one of the main reasons I completed a long questionnaire for a crispy $1 bill. Why else would I spend two or three hours being personally interviewed by these authors? They paid me $100, $200, or $250. Oh, they made me another offer--to donate in my name the money I earned for my interview to my favorite charity. But I told them, "I am my favorite charity."
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read the rest

http://www.washingtonpost.com/wp-srv/style/longterm/books/chap1/millionairenextdoor.htm

kcal, Nov 2, 2008

#1
red55 curmudgeon Staff Member

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kcal said: ↑

ode to the robin hood progressives: meet your victims
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The basic millionaire is not one of the "rich" anymore. There are a lot of millionaires in the upper end of the middle class, obviously. The average $135,000 annual income mentioned is squarely in the middle class. A million dollars just ain't what it used to be.

Any hard-working professional or businessman, that earns a good living for 30 or more years, lives frugally, and invests his money wisely is going to be worth 7 figures on paper. SabanFan is and so am I, a lot of us are. We're still middle class. Much of it is paid-for property and equity in property, not cash. Anyone facing retirement these days without at least a million in assets has to be a bit worried if they live long or have expensive medical issues.

By the time CParso retires, that figure will be a lot higher. If rampant inflation happens, there will be a lot more middle-class millionaires. It will be like being a millionaire in Italian Lire.

red55, Nov 2, 2008

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mobius481 Registered Member

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being a millionaire doens't necessarily qualify someone as "ready for retirement." Things have definitely changed. By the time I'm 65, you'll have to have minimum 2.5 million to even come close to retiring comfortably. It's scary taht most baby boomers can't afford to retire, especially after this market downturn.

mobius481, Nov 2, 2008

#3
gumborue Throwin Ched

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how many of the 6% of millionaires that have over $10 mil are in the 20% that inherited?

i have a hard time buying the #s. i dont see how such a low 20% of millionaires are retired. what? do they die once the get a million?

oh, they probably never retire, just have some token exec position or administer some trust fund.:grin:

gumborue, Nov 4, 2008

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lsu-i-like Playoff advocate

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Won't those average millionaires be safe under Obama's plan?

lsu-i-like, Nov 4, 2008

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gumborue Throwin Ched

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lsu-i-like said: ↑

Won't those average millionaires be safe under Obama's plan?
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absolutely. except theyll pay more payroll tax and 5% more cap gains.

gumborue, Nov 4, 2008

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SabanFan The voice of reason

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mobius481 said: ↑

being a millionaire doens't necessarily qualify someone as "ready for retirement." Things have definitely changed. By the time I'm 65, you'll have to have minimum 2.5 million to even come close to retiring comfortably. It's scary taht most baby boomers can't afford to retire, especially after this market downturn.
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They best advice I can give young adults is to live within your means. Credit cards are the devil. Other than a home and a car, you should have no debts that require you to pay interest. I still drive a 97 F150 with 160,000 miles on it. My wife drives a 2000 Crown Vic with 100,000 miles. Both are paid for. I keep the oil changed and will drive them until they stop. That's 500 to 800 dollars of disposable income that I can save toward a large purchase or invest.

SabanFan, Nov 4, 2008

#7

1 person likes this.
Andouille Guest

gumborue said: ↑

absolutely. except theyll pay more payroll tax and 5% more cap gains.
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Can you guess how a business owner might lower his exposure to payroll taxes?

Andouille, Nov 4, 2008

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LSUsupaFan Founding Member

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SabanFan said: ↑

They best advice I can give young adults is to live within your means. Credit cards are the devil. Other than a home and a car, you should have no debts that require you to pay interest. I still drive a 97 F150 with 160,000 miles on it. My wife drives a 2000 Crown Vic with 100,000 miles. Both are paid for. I keep the oil changed and will drive them until they stop. That's 500 to 800 dollars of disposable income that I can save toward a large purchase or invest.
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As a member of your target audience I would say this instead:

They best advice I can give anyone is to live within your means. Credit cards are the devil. You should have no debts, but a house on 15 year mortgage. I still drive a 2003 Buick with 110,000 miles on it. My wife drives a 2007 Mariner with 10,000 miles. Both are paid for. I keep the oil changed and will drive them until they stop, then start them and drive them some more. That's 500 to 800 dollars of disposable income that I can save toward a large purchase or invest
Click to expand...

LSUsupaFan, Nov 4, 2008

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Lil Jules Founding Member

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SabanFan said: ↑

Other than a home and a car, you should have no debts that require you to pay interest..
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Student Loans?

Lil Jules, Nov 4, 2008

#10

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