The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: Millionaire professions Date:  1/26/2019  12:04 PM
Author:  BruceBrown Number:  91732 of 93634

Wradical Bill writes: At my initial appointment with him, I told him all this, as he was getting my background info on me as a new patient. And he really kind of shocked me with his comment, "Boy! I wish I could retire at 62!" (My guess is that he's in his fifties.)

And I thought, there's really something wrong with this picture. I'm a CPA, and I made decent money, but not top tier level. I wasn't a partner in the firm, but I had survived a merger, and kind of had my own role in the organization at the manager level. Which is to say that I was a tax specialist in a firm that mostly did audits. But this guy's a doctor? And I can retire at 62, but he can't?

Definitely not what you'd expect. But it happens.

It happens a lot more than we all realize. Financial Advisors and Planners, Credit Counseling services, tax preparer's, etc... all get to see it on a daily basis a lot more than the rest of us.

Ramsey's study, based on the 10,000 surveyed found:

"The top five careers for millionaires include engineer, accountant, teacher, management and attorney." -

It's already been mentioned a few times upthread about Stanley & Danko's excellent book "The Millionaire Next Door" that came out in 1996. The original post of this thread that linked to the study conducted by Ramsey Solutions came to a lot of similar conclusions as to how millionaires ended up being millionaires as Stanley & Danko's book. The top 10 list of careers in Stanley and Danko's book are just as interesting.

"How did they hit the million-dollar mark? They did it through consistent investing, avoiding debt like the plague, and smart spending. No lottery tickets. No inheritances. No six-figure incomes."

8 out of 10 contributed to their 401k plans, and 3 out of 4 also contributed to plans outside of the company 401k such as IRA's, HSA's, taxable accounts, etc... . The average hit $1M status by after 28 years of saving.

Anyone maxing out their 401k plus the employer match for 28 years since 1990 is well over $1M in the 401k alone at this point. Charts, graphs, and data about that here:

Of course, not all incomes allow (or allowed) for one to cover all household expenses after maxing out, but many make sacrifices to keep lifestyle on the down low especially with the big three items - housing, transportation, and food - to be able to contribute as much as they can.

"The people in the study became millionaires by consistently saving over time. In fact, they worked, saved and invested for an average of 28 years before hitting the million-dollar mark, and most of them reached that milestone at age 49. [That would be after 27 years of working if they began at age 22.]

Three out of four millionaires (75%) said that regular, consistent investing over a long period of time is the reason for their success. So, the story about the young computer genius who developed an app that earned millions overnight is the exception, not the rule."

Pretty similar recipe for success no matter what the career. Perhaps the doctor in Wradical's post was not following the basic tenets of accumulating wealth: regular and consistent investing over a long career, avoiding lifestyle creep, avoiding CC debt, keeping expenses low, etc. Good chance that he had some large debt to service, lifestyle choices to cash flow, college educations for his kids to pay for, and on and on to the point that he wasn't able to pay himself first in the form of saving. It's a common "story" no matter the level of income. Of course, none of us know the true story of the Doc and he may have been saying that in jest based on his own goals, lifestyle, and financial situation.

"Even when millionaires don’t have to worry about money anymore, they’re still careful about their spending. Ninety-four percent of the people we studied said they live on less than they make, and nearly three-quarters of the millionaires have never carried a credit card balance in their lives! They also said they spend $200 or less each month on restaurants. And 93% of millionaires use coupons all or some of the time when shopping. By staying out of debt and watching expenses, they’re able to build their bank accounts instead of trying to get out of a financial hole every month."

It's not always about earning a high salary in many cases.

"Only 31% averaged $100,000 a year over the course of their career, and one-third never made six figures in any single working year of their career."

Perception vs. reality is deeply discussed in Stanley & Danko's book as well. 11 million of the 126.22 million households in the US are millionaires ($1M in investable assets - not including the primary residence). Most you wouldn't be able to tell if they were millionaires by where they live, what they drive, or what they wear, or where their kids go to school.

Stanley & Danko found that more millionaires drive Toyota's and Honda's than prestige cars.

Anyway. None of this is news to most of us.
Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us