Chris Hogan is a former football player and Georgetown alum who became the Vice President of a well-respected company. By all accounts, he seemed successful. Yet he felt there was something missing.
He kept seeing families struggle with their personal finances, and he felt a calling to help. That’s when he met Dave Ramsey, who brought him into the Ramsey family to spread the word about smart money management and debt freedom. Chris has been a writer, speaker and influencer ever since.
Chris organized a survey of 10,000 millionaires in the United States. The last time anyone conducted a large-scale study of American self-made millionaires was 25 years ago, and documented in the classic book The Millionaire Next Door. While that book is fantastic, it’s also 25 years old. Chris wanted to gather current data, to see what’s changed since then, and what’s remained the same.
He published these findings in a new book called Everyday Millionaires, which details the life of individuals and households in the U.S. that have seven-figure net worths.
Here’s what he discovered:
- 89 percent of millionaires have a net worth between $1 million to $5 million dollars
- 62 percent graduated from public state schools
- 9 percent didn’t graduate from college
- Close to 50 percent had a B average or less in school
- 55 percent give to charities and churches on a regular, monthly basis
- 73 percent never had a penny of credit card debt
- 18 percent are self-employed
- 62 percent earned a household income of less than $100,000 annually
- 80 percent exercise at least three times a week.
On average, their homes are 2,600 square feet, and they’ve lived there for an average of 17 years. Two-thirds have a paid-off mortgage. They paid off their home on average in 11 years.
Their net worth breaks down as one-third their home, and two-thirds their investments. They became millionaires at the average age of 49.
They spend, on average, $35 on a pair of jeans.
The top five occupations among millionaires in the U.S. are engineer, accountant, teacher or professor, management, and lawyers.
The top five cities of residence for U.S. millionaires are New York, San Francisco, Phoenix, Chicago, and St. Louis.
I interviewed Chris about this study twice.
We recorded our first interview on stage in front a live crowd at FinCon, which is a conference for personal finance bloggers and podcasters.
We had an awesome conversation, but at the time, he couldn’t share the numbers. So I asked if we could speak again when he’s authorized and ready to share the data.
He agreed, and we recorded a second interview via Skype a couple months later.
In today’s podcast episode, you’ll hear both interviews. Here are six key takeaways from our conversation.
#1: Millionaires choose classic investments, like mutual funds (index funds) and real estate. They typically don’t invest in the latest fad, like bitcoin or marijuana stocks. Most prefer broad, diversified funds rather than individual stock picking.
#2: They hire a strong team. They work with a financial planner, an accountant, and other professionals who coordinate with one another to make sure that they’re not overlooking any blind spots. In essence, they build a team of support around themselves and their family.
#3: They look for “opportunities to grow forward.” While most are not high earners (the majority make annual household incomes in the five-figure range), they’ll look for opportunities to earn more, create a side hustle, or cut back on their expenses. And of course “they’re allergic to debt.”
#4: They’re disproportionately represented by the self-employed. “Eighteen percent were self-employed,” Chris told me. Here’s why that’s a remarkable statistic:
According to the Pew Research Center as of 2014, 10 percent of the workforce in the United States is self-employed.
According to the Bureau of Labor Statistics, 10 percent of the workforce in the United States is self-employed.
According to the Treasury Department’s Office of Tax Analysis in a 2017 report, among taxpayers with non-zero earnings, 7.2 percent receive income solely from self-employment and 6.1 percent depend on a mix of self-employment and working for a company. This means the total number of people who receive some income from self-employment is 13.3 percent (e.g. employed workers with a side hustle), but people who receive their sole source of income from self-employment is only 7.2 percent.
In other words, reports range in stating that between 7 to 10 percent of the U.S. workforce is full-time self-employed.
Let’s take the high end of that estimate, and use 10 percent as the share of workers in the U.S. who are self-employed. Then let’s compare that to Chris’ statistic.
This means that self-employed people consist of 1/10th of the workforce population, but 1/5th of the millionaires.
The self-employed, relative to the ranks within the overall U.S. workforce, are disproportionately represented among millionaires.
#5: If you have bad habits, and then you earn a bunch of money, now you’re just living out bad habits at a larger scale.
#6: When you’re successful with money — that’s not an accident. That’s a decision.
Listen to the full interview (excuse me, BOTH interviews) with Chris Hogan on today’s podcast. Enjoy!
- Everyday Millionaires, by Chris Hogan
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