I am interested in a recent statistical snapshot that shows the
primary channel used by US citizens to become millionaires.  For
example, "Of the 8.2M US households with a net worth over $1M:
40% achieved status primarily through business ownership
38% achieved status primarily through real estate equity
15% achieved status primarily through stock investments in other companies
5% achieved status primarily through bonds
2% achieved status primarily by saving pay from their W2 job"

Here is the article that is fueling my question:
http://money.cnn.com/2004/11/16/pf/millionaire_households/

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Request for Question Clarification by pafalafa-ga on 01 Mar 2005 17:05 PST

Information on wealth in the US is actually quite hard to come by.  A
good rule of thumb is:  the higher an income bracket is, the less
information is available about it (the only exception is the Fortune
500 list of the absolutely wealthiest Americans, but these are
billionaires, not millionaires).

However, the IRS did an in-depth study of wealth based on 1998 tax
returns, which details how millionaires divvy up their assets by
select categories:


Personal Wealth, 1998

Personal residences

Investment real estate

Closely held stock

Other stock 

Other financial assets 

Cash and money market accounts

Retirement assets

Debts and mortgages

Personal residences




Note that this report tells more about what millionaires DO with their
assets, rather than how they GOT them.  Still, it's one of the best
studies on this topic that I know about.

Would details about millionaires (and above) from this report meet your needs?


Let me know.


pafalafa-ga

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Clarification of Question by sybarite-ga on 01 Mar 2005 22:07 PST

MarkJ-ga & Pafalafa-ga: I'd like to keep this question open because
I'm really looking for data on average people who ascend to the magic
million mark.  However, your finds are interesting and I've opened up
2 separate questions at $15 each if you'd like to be the answerer of
those using the data you found.

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Request for Question Clarification by pafalafa-ga on 02 Mar 2005 04:53 PST

I assume you're already familiar with the well-known study, "The
Millionaire Next Door"?

If not, have a look here:


http://www.bookbrowse.com/dyn_/title/titleID/242.htm

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Clarification of Question by sybarite-ga on 03 Mar 2005 11:08 PST

Hey pafalafa-ga: I'm familar with the book but haven't looked there
for my answer.  If you have a clean statistical summary from that
source, I would be happy to use it as an answer.

The only study I have found that neatly fits your interest in the
asset categories of the wealthy differs in two ways from the terms of
your question.

First, it breaks down its data for the top 1% of U.S. households, as
measured by net worth, not for those with (only) 1 million or more in
assets.  Second, and possibly more important, the study was published
in the late 1990s and the data was compiled for three years in the
late 1980s and early 1990s.

If another researcher cannot find more recent data for you, I would be
happy to post a link to this study as an answer if you are interested.

I note that none of those 8.2M households achieved their status by inheritance

How very peculiar.

I would also expect Divorce Settlements to feature.

Frde raises a good point.  Seems to me that a very significant portion
of millionaires became such through gift/inheritance, one
multi-millionaire couple leaving it to their two or three or more
children (the Kennedys et al.).

Are there any statistics on inheritance settlements that could put a number on this?

Hi sybarite,

These articles and documents may interest you:

Personal wealth, 1998
http://www.findarticles.com/p/articles/mi_m2893/is_3_22/ai_101497691

Association of Fundraising Professionals
http://www.afpnet.org/tier3_cd.cfm?folder_id=2345&content_item_id=10286

Why the $41 Trillion Wealth Transfer Estimate is Still Valid
A Review of Challenges and Questions
http://www.bc.edu/research/swri/meta-elements/pdf/41trillionreview.pdf

Millionaires and the Millennium: New Estimates of the Forthcoming
Wealth Transfer and the Prospects for a Golden Age of Philanthropy
http://www.bc.edu/research/swri/meta-elements/pdf/m_m.pdf

I hope that helps.

Best regards,
Rainbow

Easy Million:

Invest $2,000 per year ($166.67 per month) for 36 years and earn 11%
(the market has averaged almost 12% over the last 80 years).
You'll have $1,000,000 when you're done.  And if you put the money in
a ROTH IRA as you invested it then you won't even have to pay taxes on
any of that Million.

If you get 12% interest then you will have $1,000,000 after 34 years.

If you don't have 36 years then simply invest more to make up for the
time, $1,000,000 isn't as hard of a goal as most people make it out to
be... it just takes time, I'm planning on having $2,000,000 by the
time I'm 55.