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No. of Recommendations: 3
According to "The Millionaire Mind" 60% of the
millionaires surveyed hold mortgages.

According to "The Millionaire Next Door" a little more
than half hold mortgages.

But according to the IRS study, almost all millionaires
can pay off their mortgages whenever they want.  Take
a look at the average home value compared to the
average cash holdings for millionaires.

                                  Money Market &
Net Worth(mm)    Home Value(k)    Cash Value(k)   Cash/Home Ratio
$1 to $2.5       $221             $115            0.52
$2.5 to $5       $354             $179            0.51
$5 to $10        $546             $285            0.52
$10 to $20       $780             $417            0.53
$20 & over       $1,075           $1,153          1.07

ALL              $278             $148            0.53

In other words, according the IRS study, millionaires 
on average hold at least half the value of their homes
in cash or cash equivalent securities.  They can pay 
off their mortgage at any time.  They don't have to
work to carry their mortgage.  They choose to work.

Take a look when you consider stock holdings.

                                  Stock of Public
Net Worth(mm)    Home Value(k)    Corps Value(k)  Stock/Home Ratio
$1 to $2.5       $221             $323            1.46
$2.5 to $5       $354             $868            2.45
$5 to $10        $546             $1,881          3.45
$10 to $20       $780             $3,857          4.95
$20 & over       $1,075           $17,949         16.7

ALL              $278             $736            2.65

Stanley suggests that 80% of millionaires work.  If one
were to look at the statistics above, it becomes clear
that they don't work because they need to pay off big
mortgages.  They could easily do that with current
assets.  They probably work because they like what they
are doing.

The above statistics also suggest that the wealthier
one becomes, the more "frugality" he can afford.  So
much for the theory of "Lifestyles of the Rich and Not
So Smart".

LF  :-)
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No. of Recommendations: 2
"
The above statistics also suggest that the wealthier
one becomes, the more "frugality" he can afford. So
much for the theory of "Lifestyles of the Rich and Not
So Smart".



That does not compute

If you have a net worth of 1 -2.5 million and live in a $200,000 house, that is already a decent size house in most places.

If you have net worth of 20m, and only live in a house worth 1 million, that is probably because you haven't got a clue how to use 15 bedrooms, 10 car garage, maid and gardener and chaffuer quarters, live in maid apt, guest house (not cottage), etc....... you reach a point where you can't live in a 5 million dollar house in most places...they don't build them......you would have a hard time spending over a million in Dallas.....over that, you get 20-30 acres of land, horse stables, private runway for your plane, and entire lake, etc....... and could it be that most 20m plus millionaires don't want to live in a Bill GAtes style house?

If we also use that as a guideline, 20m net worth people should be driving $200,000 cars....I'm sure a few do own Rolls Royces, but I'd bet most haven't spent more than $55 or $60K, since that is about all you can possibly spend on a car!!!!!! (unless you go 'exotic').....

That argument falls apart quickly.....

They just can't 'spend' that much money in proportion to their net wealth on a home or car...

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Good point. You can only buy so much caviar. Reminds me of the movie "Brewster's Millions".

RAB
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"you would have a hard time spending over a million in Dallas"

You could spend over $1MM for a two bedroom house in L.A.
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