3 Things I Learned by Working with Multi-Millionaires
As an executive coach, business owner, and former bank director, I’ve had the pleasure of working with and becoming friends with several multi-millionaires, and even decamillionaires. Here are three things I’ve learned from my time with them.
1. Decamillionaires Do Not Become Rich Solely by Saving
The evil Mr. Scrooge, pinching every penny. That’s how the media portrays the rich. The fact of the matter is that if you think pinching every penny will get you to a ten million dollar or higher net worth; you’d better check your math.
To save ten million dollars, you’ll need to save $100,000 a year for the next 100 YEARS. Invest that same $100,000 each year in the stock market with an average return of 7%, and it will still take you thirty.
Note, that’s SAVINGS, I didn’t say MAKING $100,000 a year. You could become a millionaire by skipping the $7 a day Starbucks habit and investing that $2,500 a year into the stock market…in about fifty years, but you’re not going to get to ten million.
These people do things differently. They are often good savers, yes, but they’ve also learned to invest in their earning potential and sell value rather than time. None of the ones I know inherited their wealth either, in fact, many had little to no financial help from mom or dad.
2. Multi-Millionaires are Usually Generous
The multi-millionaires I know are quite generous, behind the scenes. These people are the ones who practically single-handedly fund entire charitable organizations, and are usually well respected in the community. They’ve invested in skills and assets that allow them to generate wealth, so have transitioned to an abundance rather than a scarcity mindset. They’re usually very likable and honest people because that’s part of the secret of becoming wealthy — others do business with people they like and trust.
It is true that the millionaires I know rarely give out money to individuals unless they are paying for a service or product. They’ve learned, often quite painfully, that giving money to others changes the dynamic of the relationship. If it’s a loan, then there is a good chance the recipient will not repay the loan, especially if they do not believe it will have significant consequences for the lender. When that happens, the borrower may start avoiding the lender, and the lender gets annoyed that the borrower did not follow up on his/her promises. If it’s a gift, then often the other person starts to either feel inferior because they needed the money, or begins to feel entitled, becomes dependent, and gets angry when the “rich” person stops handing out gifts. It’s a vicious cycle.
Worse yet, the borrower or gift recipient may tell other people, often innocently because they are grateful for the favor, and then suddenly everyone wants a handout. Worst of all, the gift doesn’t even help that much, because the person who needed the money didn’t learn anything about how money works. It’s like giving someone a fish but not teaching them how to fish, all they learned is who to ask for fish or in this case money.
3. You Probably Know Some Millionaires
According to a recent article on the New York Post, roughly 3% of Americans qualify as a millionaire, not including the value of their primary residence. That means for every hundred people you know, three of them are likely to be millionaires.
In my experience, it is nearly impossible to tell who these people are just by looking at them. The guy you run into in the convenience store driving a Toyota Camry wearing a pair of jeans and a t-shirt is just about as likely to be a millionaire as the guy in the suit you just met at your last networking event who is driving a BMW.
Ok, the BMW guy in a suit at a professional networking event is a little more likely to be a millionaire than a random guy you meet on the street, but my point is that you can’t tell someone’s net worth by looking at what they wear or drive. While they will likely still dress up appropriately for a formal meeting or event and may even drive fancy cars or live in beautiful houses if they enjoy them, these people do not need status symbols; they have nothing to prove, at least on the wealth side of things.
They don’t generally post pictures with their rented Lamborghinis and don’t flaunt their money for many reasons, just like you wouldn’t take out your wallet full of hundred dollar bills and flash it around at a party for obvious reasons. There is just quiet confidence about these people that you start to detect once you’ve been around enough of them. They are people, just like you and me. They cry when a loved one dies or hurts them, they get a bruise when they slip and fall on the ice, just like we do. Wealth does not make you a better or worse human being; it just makes it a little easier to buy the items you want, support the causes you like, and do what you want to do.