Wealth Creation Strategies | OnMoneyMaking

Here is a questionnaire about millionaire statistics which should shine some light on what’s required to become one. The answers should be clear to anyone that has read the Millionaire Next Door. Test yourself with this True/False quiz by clicking on each question line to reveal the answer:

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Most millionaires are college graduates.

True. 4 of 5 millionaires are college graduates. 18 percent have Masters degrees, 8 percent law degrees, 6 percent medical degrees, and 6 percent Ph.D.s

False. About 2/3 of millionaires work 45-55 hours a week.

More than half of all millionaires never received money from a trust fund or estate.

True. Only 19 percent of millionaires received any income or wealth of any kind from a trust fund or an estate. Fewer than 10 percent of millionaires inherited 10 percent or more of their wealth.

More millionaires have American Express Gold Cards than Sears cards.

False. Only 28.6 percent of millionaires have American Express Gold Cards while 43 percent have Sears credit cards. Only 6.2 percent of millionaires have American Express Platinum Cards.

More millionaires drive Fords than Cadillacs.

True. Ford is preferred by 9.4 percent and Cadillac by 8.8 percent. Lincoln comes in third at 7.8 percent. Only 23 percent of millionaires drive a current-year (new) car.

Most millionaires work in jobs, such as sports, entertainment, or high tech.

False. A majority of millionaires are in ordinary industries and jobs. They are proficient in targeting marketing opportunities.

Most millionaires work for big Fortune 500 companies.

False. About three out of four millionaires are self-employed and consider themselves to be entrepreneurs. Most of the others are professionals, such as doctors, accountants, and lawyers.

Many poor people become millionaires by winning the lottery.

False. Few people get rich the easy way. If you play the lottery, the chances of winning are about one in 12 million. The average person who plays the lottery every day would have to live about 33,000 years to win once. In contrast, you have a one in 1.9 million chance of being struck by lightning. A pregnant woman has one chance in 705,000 births to have quadruplets. How many sets of quadruplets do you know?

College graduates earn about 65 percent more than high school graduates earn.

True. In recent years, the average college graduate earned 66 percent more than the average high school graduate did. People with professional degrees earned 150 percent more than high school graduates did.

High school graduate invests extra income at 8% yearly, by age 67 = $5.5 million.

True. Of course, a normal person would spend some of the difference, but it is a dramatic illustration of how valuable a high school diploma is. The difference in earnings between a high school graduate and a high school dropout is $8,000 at age 18. The illustration assumes the difference increases by 1.5 percent each year and that the difference is invested at 8 percent interest each year.

Day traders usually beat the stock market and many of them become millionaires.

False. Recent studies show that 80 percent of day traders lose money.

If you want to be a millionaire, avoid the risky stock market.

False. Long term (starting in 1926 and including the Great Depression), the Standard & Poor’s 500 Stock Index has increased at about 11 percent compound annual rate of return, exceeding the return on any other investment. Of course, there is risk. The stock market has down years, and there is no guarantee of an 11 percent return in the future, especially in the short run. In contrast, the long-term return on risk-free U.S. government securities during the same period ranged from 5 to 6 percent. The actual return depended on the term of the bond. Another way of looking at this is that $1.00 invested in the S&P 500 on January 1, 1926, was worth $1,828 on December 31, 1997. One dollar invested in long-term government bonds during the same period was worth $39 on December 31, 1997. It probably paid to take the additional risk of buying stocks.

Non-smoker at ages 18-67, invests $550 at 8% interest a year, equals $300,000.

True. Because of the power of compound interest, small savings can make a difference. It pays to resist temptation and live below your means.

Investing at ages 22-65, $2000 a year at 8% annual interest, will make $700,000.

True. Because of the power on compound interest, the earlier you begin saving, the better. Regular saving will make you a millionaire, even if your salary is modest.

Single people are more often millionaires than married people.

False. Most millionaires are married and stay married. By contrast, divorce is a gateway to poverty. Financially speaking, divorce is something you want to avoid, particularly after you have children. It is important to choose a marriage partner carefully.

This quiz does highlight the importance of financial education, and the sooner the better! You can review more information about the quiz and financial education at here.

Just keep in mind, that hard work has to be combined with smart investing, to avoid just working hard and only marginally improving your bottom line. Even if you’re not 18 years old, applying the millionaire principles from above, can help anyone’s bank account get closer to, and beyond, 7-figures.