Millionaires tend to feel good about how they’ve managed their money, according to a new Millionaire Corner survey that indicates the wealthy have relatively few financial regrets.
Most Millionaires feel pretty good about how they’ve managed their wealth, according to a survey conducted by Millionaire Corner in May that indicates wealthy investors have few financial regrets.
When asked to identify their biggest financial regret, more than 54 percent of Millionaires said they had none. Only 14 percent of individuals with less than $100,000 to invest could say the same.
The single most significant source of financial remorse for Millionaires was “not making good stock picks” – a sentiment shared by 10 percent of investors with a net worth of $1 million or more not including their primary residence. But, few Millionaires expressed regret over other areas of financial management, such as not saving enough for retirement (8.4 percent), spending too much on material goods (4.2 percent), putting too much money into a house (3.7 percent) or not having a diversified portfolio (4.5 percent).
Financial regret weighs much more heavily on individuals with less the $100,000 to invest. Nearly one-third lament not saving enough for retirement and 16 percent say they regret having too much credit card debt. Younger investors – those under the age of 40 – express similarly high levels of regret over their insufficient retirement savings, spending too much on material goods and heavy credit card debt. What can younger and less wealthy investors learn from Millionaires?
Millionaires attribute their financial success primarily to hard work, education, smart investing and frugality. In other words, they tend to make their money the old-fashioned way – they earn it. Inheritance typically plays a relatively small role in building wealth for America’s millionaires. (The same can be said for high net worth investors - those with investable assets of $5 million to $25 million: See How to Become an Ultraa High Net Worth Individual.)
As a group, Millionaires are not big risk takers, preferring to preserve wealth rather than seek high returns in the current uncertain economy. Their top investment criteria is the level of risk associated with an investment, closely followed by a related factor, diversification. The reputation of a company where an investment is made and the tax consequences of investments are also top considerations for Millionaires. (Millionaire Corner research shows that many high net worth investors also favor principal protection in the current economic environment See our related story, Investment Strategies of High Net Worth Millennials.)
When asked to identify their best financial decision, Millionaires are most likely to say “making consistent investments in a retirement plan,” followed by “having a frugal lifestyle to allow me to save my money,” according to our May survey, which also indicates the housing crisis has affected the attitudes of Millionaires. Less than 13 percent of Millionaires count buying a home as their best financial decision ever.
Millionaires were least likely to regret “not saving for a rainy day,” “not asking children to shoulder more of their college costs,” and “not using money to help others.”