Tom Corley studied millionaires for five years: https://richhabits.net/wealthy-actually-living/
The data speaks volumes.
The top 5% of households in America reported $197,651 or more in income in 2016, according to the Tax Foundation. This same top 5% controlled 60% of the nation’s wealth, according to the Federal Reserve Survey of Consumer Finance.
This 5% run big companies, run small companies, employ millions, hire and fire employees, invest in new companies, liquidate old companies, increase or decrease wages, and essentially control the lives of the other 95%.
This 5% can, and do, alter our lives, for better or for worse.
So, what do these individuals actually do for a living?
I devoted five years of my life in an effort to answer that question. I then wrote a series of Rich Habits books sharing the data I had gathered.
Here’s a snapshot of that data:
- 18% were Big Company Senior Executives
- 51% were Dreamer-Entrepreneurs
- 27% of these Dreamer-Entrepreneurs failed at least once in business
- 13% were salesmen/saleswomen
- 28% had some professional designation. Some worked for big companies, others in a small business
- 7% were Virtuosos, or top experts, in their field
- 49% were Saver-Investors – Average individuals with modest incomes, who consistently saved 20% or more of their income and prudently invested their savings over a period of 32 years
- 63% took a personal financial risk in search of wealth
- 41% were “B” students
- 29% were “C” students
- 68% had a college degree
- 25% had a post graduate degree
- 86% worked more than 50 hours per week
If you were to boil it down, the rich become rich by pursuing wealth in one of four ways:
Path #1 – Saver-Investor Path
The Saver-Investor Path is one almost any individual can take. It has only two rules that you must follow:
- Save 20% or more of your income by living off of 80% or less of your income and
- Consistently and prudently invest your savings.
According to my Rich Habits Study, this chosen path took 32 years to accumulate an average of $3.3 million.
This path is not for everyone. It requires enormous financial discipline and a long-term commitment.
Path #2 – Big Company Senior Executive Path
Working for a big company and rising up the ladder into senior management is another path to riches. In most cases, the wealth these self-made millionaires accumulate comes from either stock compensation or a partnership share of profits.
This path is also not for everyone. You must devote yourself to one company for a long period of time. And there are risks. The biggest risk is you could be fired.
A secondary risk is profitability. If the company struggles financially, for whatever reason, your time investment in the company may not be rewarded, to the extent you expected.
Path #3 – Virtuoso Path
Virtuosos are individuals who are the best at what they do or possess knowledge which sets them apart from all of the competition.
Becoming a Virtuoso requires an enormous investment in time, and often money.
Skill-based Virtuosos devote themselves to many years of Deliberate Practice and Analytical Practice.
Analytical Practice often requires the services of a coach, mentor or expert who can provide immediate feedback. This feedback, in most cases, costs money.
Knowledge-based Virtuosos must spend many years in continuous study. Oftentimes, this requires formal education, such as advanced degrees (PhD, Medical Degrees, Law Degrees, etc.).
Again, this path is not for everyone. Not everyone has the ability to devote significant hours every day practicing their skill, or the financial resources to pursue advanced degrees.
Path #4 – Dreamer-Entrepreneur Path
The Dreamer-Entrepreneur Path requires the pursuit of a dream. This might be starting a business. It might involve becoming a successful author, musician, actor or artist. It might be the creation of an app, product or some unique service, which provides added value to a significant number of people.