Professional Documents
Culture Documents
The Millionaire Next Door
The Millionaire Next Door
The Research
Studies were conducted by Stanley and Danko over the past 20 years through personal and focus group interviews with over 500 millionaires and 11,000 surveys of high net worth and/or high income respondents More than 1,000 responded to the latest survey, which was conducted in May 1995-January 1996. Each participant answered 249 questions on topics ranging from household budget planning, children, consumer habits and a variety of other wealth-related issues.
The Facts
Most millionaires ARE NOT driving this years car models, only a minority drive foreign models Most millionaires DO NOT wear designer clothes or expensive watches Half of millionaires DO NOT live in upscale neighborhoods in luxury homes
Demographics
Demographics
Millionaire Traits
The typical millionaire is a 57 year-old male that is married with three children (PP) Millionaires live well below their means
(FI)
(FI)
Millionaire Traits
They are prodigious accumulators of wealth they speak of their achievements, experiences, families and how theyve built their business. Under accumulators of wealth (high consumption/low savings) tend to emphasize their income, consumption habits and status artifacts (homes, boats, cars vacations, etc.)
(FI)
Millionaire Traits
Education
As a group millionaires believe that education is extremely important to them, their children and their grandchildren. (FI) 17% of millionaires or their spouses attended a private elementary or high school. (PP) 55% of their children are attending or have attended private schools. (PP) Nearly half of all millionaires never received any college tuition from their parents or other relatives
Millionaire Spouses
Are meticulous budgeters and planners and are more conservative than the millionaires are. Half their spouses are housewives and are most likely to receive significant annual financial gifts. (FI/PP) The number one occupation of spouses that work is an elementary or high school TEACHER! (PP/FI)
Children of Millionaires
32% of millionaires pay for their adult childrens graduate education (FI) Millionaires are more than five times as likely than average households to have a son or daughter graduate from medical school and are four times as likely to have a child who is a law school graduate. (FI)
Corporate Executive Entrepreneur Middle Manager Physician Advertising/ Marketing/ Sales Professional
Attorney Engineer/Architect/ Scientist (PP) Accountant College/University Professor (PP) Elementary/High School Teacher (PP/FI)
Millionaire Businesses
Millionaire Businesses
Self-employed people make-up less than 20% of the work force in America, but account for 66% of the millionaires. 75% of the self-employed are considered entrepreneurs; others are professionals (doctors, lawyers, accountants).
(PP)
Millionaire Businesses
Many of their businesses are not glamorous (paving contractors, welding contractors, auctioneers, rice farmers, pest controllers, owner of mobile home parks, etc.). (FI) They work 45-55 hours a week. Business owners outpace all other occupational categories in accumulating wealth.
Most high income owners have more experience in evaluating potential suppliers, employee applicants and human resources than individuals in other occupations.
Millionaire Businesses
91% never received, as a gift, as much as $1 of the ownership of a family business. Less than 20% of business owners will turn his/her business over to their children to own and operate. (PG)
They understand the risks and other uncontrollable variables associated with succeeding in business.
Home Ownership
97% of millionaires are home owners The average value of their homes is $320,000 (PP) 50% have occupied the same house for more than 20 years
(PP)
Income
Many millionaires with a net worth of $2-3 million have annual household incomes of $80,000. (FI) The typical millionaire may be cash poor (60% of their annual realized income is invested in assets that tend to appreciate in value without generating realized income (20% in equity, 20% pension, 20% business). (PG) A millionaire with household income of
Income
On average, the millionaires annual tax bill is an amount equal to a little over 2% of their wealth compared to the typical household of 12.9% or more. Ross Perot pays 8.5% in taxes on his income. He minimizes his tax bill by investing heavily in municipals, taxsheltered real estate and stocks with unrealized gains.
Ford (F-150 Pick-up and Explorer) Cadillac (Deville/Fleetwood Brougham) Lincoln (Town Car)
Three-way Tie Between: Jeep (Grand Cherokee) Lexus (LS 400) Mercedes (S Class)
Net Worth
6% of millionaire households have net worth of $10M The average millionaire household net worth is $3.7M The typical millionaire household has a net worth of $1.2M (median)
Millionaire Estates
Most millionaires have never received an inheritance 80% are first generation wealth holders
Millionaire Estates
Within the millionaire married couple population the expected average age of a male decedent is 75, while the average female decedent is 82. Most of the females never remarry. (PG/FI) Housewives rank first in both the size of their inheritance and the incidence of inheriting wealth from their parents. (FI)
Those we know: Helen Dix (ltsp) Jean Fairfax Pauline Franks Paige Palmer (ltsp) Olga Mural (ltsp) Marie Salandra
Those we dont know: Anna Dunn Loretta Holmes (ltsp) Marjorie Woodring
Top Ten States with Estates Valued at $1M or More (predicted for 2000)
California (11,952) Florida (5,835) New York (5,702) Illinois (3,140) Texas (3,014)
Pennsylvania (2,761) New Jersey (2,482) Ohio (2,192) Massachusetts (1,882) Connecticut (1,650)
The Future: Top Estimated Millionaire Households in the Year 2005 by State
California (773,213) New York (431,607) Texas (365,034) Florida (289,231) Illinois (283,329)
New Jersey (258,917) Pennsylvania (238,010) Michigan (202,929) Ohio (197,554) Virginia (171,516)
Education is very important to them Number one occupation of millionaire spouses is TEACHER Many of their businesses are NOT