Monday, May 18, 2009

What type of Millionaire would you be?

The average person thinks that the ultimate definition of someone wealthy is having $1 million or more of net worth, not including a primary residence. One of my ultimate goals is to have a net worth of over a million one day. After reading this article there seems to be six different types of millionaires. The article talks about how its not about inheriting wealth, but most millionaires seem to be hard workers who are frugal and they save and invest— its all about living below your means.

Some of the other key points on how people become millionaires is not only that you have to invest, but you you have to do it wisely. They also mention that it is about work ethic and that most of people say that they find joy in working. I have always though this to be true, most of the wealthy people I know love what they do. They don't work for the money, they work because they love it. Since they love it, they are really good at what they do, which leads to success and then to wealth.

The six types of savers are:

Satisfied Savers
They make up 24% of the wealthy population and share these characteristics.

Average age: 60
Built wealth through hard work, by living below their means and taking moderate risks
Financially savvy
Lost relatively little in the bear market
Know how to make their money work for them
Enjoy making a difference through charitable efforts

Status Chasers
They comprise 18% of the wealthy population. 

Average age: 55
Achieved wealth through work and some inheritance
Want it all but haven't been able to achieve their major goals yet
Define wealth as a level three times their current net worth
Pessimistic about their own financial future
Less financially knowledgeable than their counterparts
Think of financial situation daily as a source of concern

Altruistic Achievers
Roughly 17% of the wealthy population is composed of the philanthropists who share these qualities. 

Average age: 54
Achieved wealth through work, some inheritance, good investments, owning a business, and living below their means
Self-made, driven to succeed, work hard, take risks
Use their wealth to help the less fortunate
Lack the time, interest and know-how to manage finances; rely on professional management
Lost the most in the bear market
Only one-quarter plan to retire completely

Secret Succeeders

They make up 17% of the wealthy population. 

Average age: 55
Self-made: built fortunes through working in professional and managerial positions, making one or two particularly good investments and not spending
Live below their means
Suspicious of showing their wealth -- fear they'll lose it
Among the least charitable
Group includes the greatest percentage that admit they'll do whatever it takes, including compromise principles, to stay ahead
Not especially financially savvy, but having financial control is key
Somewhat optimistic about their financial futures

Disengaged Inheritors
They compose 13% of the wealthy population. 

Average age: 58
Received and built their wealth largely through inheritance, and living below their means
Second-wealthiest and second-oldest group
Lack the goals and drive to succeed
Think about their financial situation the least out of apathy and ambivalence
Not charitable, generally unhappy
Least financial know-how of the high-net worth segment
Deal Masters

They make up 11% of the wealthy population. 

Average age: 49
Have amassed the greatest wealth, self-made, self-reliant
Built wealth by setting goals, working hard, being persistent, taking risks, relying on their own financial know-how
Segment comprises the largest number of small business owners
"Winner takes all" attitude
Confident and optimistic
Enjoy the challenge of making money
Think about financial situation daily -- source of challenge, fun, and happiness
Lost the least in the bear market
One of the least charitable groups
Living their dream, little inclination to stop working
62% would rather be stressed than have nothing to do
I think there are some very interesting points to these groups. The one that stood out to me the most was the Disengaged Inheritors and how they - lacked goals and drive to succeed, and that they were not charitable. This just confirms everything that I believe — in that it doesn't matter wether your rich or poor, giving people something without them having to work for it, ultimately leads to people lacking in a drive to be successful. This my friends, is unfortunately why welfare has never and will never work. It also should be noted to everyone who wants to be wealthy one day, that it is very important to raise your children to learn about hard work and the rewards of it. One of my main reason to become wealthy is so that I can give my children everything that I was given growing up. What's the point of becoming wealthy? So that I can give my children money? No, it is more about giving them opportunities and to show them how they can enjoy life to the fullest(by working hard), to pass my knowledge of building something and making this world a better place. 

If I had to choose which category I would fall in, it would probably be "Deal Masters" - I have to admit that I don't give as much to charity as I want or should, so I can't argue against being one of the least charitable. The only bullet point I can argue with is that -62% would rather be stress than having nothing to do- I work hard so that I don't have to be stressed, I hate stress so, I cannot agree with that but, I understand.

Which type of millionaire would you be? Leave a comment and let me know!


  1. I would have to say as of right now I would probably fall into Deal Masters. However, I actually wouldn't mind being in Altruistic Achievers.

    Not all the criteria fit perfectly, but the overall concept it desirable.

  2. Baker - Ya that is probably the one I would pick second, even though I do enjoy the challenge of making money and i think about it daily. I would like to be able to give more to charities to make a difference...that is my ultimate goal on becoming wealthy!

  3. Another thing you can notice is the age range here - all between 49-60... I've read some books by self-made millionaires who were much younger - they did it through real-estate and riding the dot-com boom with a company they made and managed to get lucky with (genuinely lucky - right place, right time).

    I hope I can do it before age 49! I'm something of a Deal Master and Altruistic Achiever...

  4. As conservative as this may sound, I think I might fall into the Satisfied Saver category. I have no ambitions about becoming super rich, but I think I might be happy with just making enough to live an uninhibited retirement.

  5. Thats rather interesting on the different types of millionaires. I think that I would fall into the Satisfied Savers, but wouldn't mind gearing towards a Deal Makers.