Counter to stereotype America’s Millionaires are more likely to have built wealth the old-fashioned way – by earning it – than through family connections or inheritance.
Over years of research on the Millionaire mindset, investors have consistently downplayed the importance of family and inheritance in building wealth. Less than 30 percent of investors with a net worth of up to $5 million say that inheritance played a major role in building their fortunes, according to a Millionaire Corner survey conducted in March. Only 9 percent listed family connections as a key factor.
Wealthier Millionaires, those with $5 million up to $25 million, are even less likely to have obtained their fortunes through inheritance. Only 26 percent identify inheritance as a key factor, while 12 percent say family connections contributed significantly to their success.
Most millionaires perceive themselves as better off than their parents and list inheritance and family connections as the least significant factors in building their wealth. Smart investing, frugality, risk taking, being in the right place at the right time and even luck are seen as more significant than inheritance and connections.
“Many of today’s Millionaires are living proof that the American dream is still obtainable for those who work extremely hard and earn an education,” said Catherine McBreen, president of Millionaire Corner. “Most millionaires are self-made individuals who come from relatively modest backgrounds. They understand the value of hard work and saving, and, as a rule, are smart investors.”
Hard work emerges as the most important ingredient to creating wealth, and is identified as a key factor by 95 percent of Millionaires. Education plays the second most important role in wealth building, and is identified as key by up to 92 percent of Millionaires. Millionaires with up to $5 million are very likely to be managers, IT professionals, health care professionals and senior corporate executives, according to the results of our March survey.
Though Millionaires downplay the importance of generational wealth in building their fortunes, they are also more inclined to be pessimistic about the outlook for future generations. More than 82 percent of Millionaires surveyed by Millionaire Corner in September say they do not believe the next generation will live better than the current one.
In fact, prospects for the next generation rank as one of the top concerns of Millionaires surveyed in March. Fifty-seven percent of investors with a net worth between $1 million and $5 million say they are concerned about the financial situation of their children or grandchildren. Education costs also worry Millionaire investors. Fifty percent of Millionaires age 54 and young worry about financing the education of their children.