The following is an abbreviated transcription from a video Linda and I recorded. Please excuse any typos or errors.
Have you ever wondered about millionaires, and what their money secrets are that “normal” people don’t get?
In this article we’re diving into some super cool stuff– the 4 biggest money secrets of millionaires that most people completely misunderstand.
We’re unpacking findings from a study by the Ramsey team that surveyed 10,000 millionaires and the results will shake up a lot of the myths you’ve heard about millionaire lifestyles.
Whether you’ve given a lot of thought to your financial journey or you’re still figuring it out, this episode will light a fire under you. And, if you’ve been overwhelmed by misconceptions about what it takes to reach financial freedom, we’re busting those myths wide open.
For those who are looking to be more generous, create passive income streams, or just live a life that honors God financially, these insights in this article are invaluable.
Success leaves clues! By understanding the real habits and choices of millionaires, we can apply those lessons in our own lives and change our family trees for the better.
Watch the full conversation or read the transcript below…
Now, let’s find out their secrets!
The 4 Biggest Money Secrets of Millionaires
Bob: But anyway, so today what we’re talking about that I’m really excited to talk about is the four biggest money secrets of millionaires that most people will misunderstand.
And this… It’s super cool. This comes from a study that the Ramsey team put together where they basically surveyed 10, 000 millionaires and asked all these questions and found out a lot of super interesting information about millionaires that I think most people have no idea about and that most people are completely wrong about.
I think there’s a lot of really good stuff in here.
Linda: What if you ask it in the form of a question? Can you do that without giving it away?
Bob: I don’t know. Maybe. Maybe we can try that. Maybe. The first one I think will work. And the reason we’re talking about this, and the reason I find this fascinating, is that I believe success leaves clues.
Okay, so you can look at someone who has succeeded in some particular area and there’s oftentimes clues of how they got there now Might not be a hundred percent roadmap where you can follow step by step everything, you know That’s not always the case. Although sometimes it is but there’s often clues of Alright, this person did this, and this, and those are defining characteristics of how they achieved X, Y, or Z.
Okay. Therefore, maybe we should model some of that. Maybe we should apply some of that to what we’re doing, if we desire the same thing that they achieved. Same result.
Secret #1: 79{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires did not receive any inheritance at all
Bob: Anyway. First question, or maybe we could pose it as a question. What percentage of millionaires do you think inherited their wealth versus those who are self made?Essentially self made. I don’t like the term self made, but, yeah, for, so we can understand. Yeah, self made millionaires.
So that’s the first question. Ask yourself that. What percentage of millionaires do you think inherited, okay? Do you want to guess?
Linda: A lot of thought going into this guess I know. It’s interesting because, When you think about how things used to be, or at least according to the movies that I watch about the olden times.
Bob: The olden times.
Linda: It’s a lot of like inheritance and they look down on people who were self made. New money.
Bob: Yeah, new money.
Linda: It was just like, who’s their family? What did their family do? But now it’s a little bit the opposite. Where it’s if you inherit your money, you’re oh you didn’t even have to work for it.
Bob: Yeah, all right, so I’m just gonna give you the answer: three percent of millionaires received an inheritance of a million dollars. Three. Three percent of received an inheritance of a million or more.
Okay, so that would be a I have nothing and then I’m instantly a millionaire Okay, so three percent inherited a million or more. Okay, but there’s surprised by that 79{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires did not receive any inheritance at all from parents or family members So that means that would have 21{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} received something But, it wasn’t enough to push them to be millionaires by itself.
Linda: What’s great about this is that there’s so much hope for everybody.
Bob: Yeah, no, that’s what’s really cool about this. Is that you don’t have to have that, and you don’t even have to receive any inheritance.
Linda: Yeah, absolutely. Cause like I would, in my head I would think, oh if somebody received, $100,000 as an inheritance, they could use that to start their business or, whatever. Get them up and going.
Bob: Yeah. But, that’s not the case either.
Which class do most millionaires come from?
Bob: Wow, look at this. 80{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires come from families at or below a middle class income level. 80{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires. That’s also really cool. And I think it is a little bit too no doubt there’s still inequality, and I think that’s just always gonna be present.
Like Jesus said, we always have the poor with us. I think it’s always gonna be present, but I think we should do whatever we can do to help remedy and solve that.
And I think to what you’re saying I think we’ve seen that tide turn a little bit like that’s exciting to me that 80 millionaires were middle class or lower class.
Linda: That’s Really cool and encouraging that, at least in America, that you can change your family tree, right?
And especially because like I feel like so many people can be trapped in a certain mindset And it’s just exciting to see that many people break out of yeah, I’ll always be poor type of thinking.
Bob: Yeah, and with the unlimited amount of education that anyone can get from YouTube, or from whatever these days, like education is so much more accessible than it’s ever been. And so I think that just makes all of this, for those who are willing to put in the work, just makes it a lot more accessible.
Linda: Yeah, that’s awesome. Alright, great. Okay, I’m not gonna, I’m gonna try not to look at the screen and read it.
Bob: Alright, so you wanna guess? You wanna keep guessing?
Linda: I wanna keep guessing. I think this is fun.
Bob: Alright. I don’t think the second one’s going to work like that, but we’ll just do it. So I’m going to just ruin it for you.
Secret #2: You don’t need to earn nearly as much as you think in order to become a millionaire
Bob: So the second one is that you don’t need to earn nearly as much as you think in order to become a millionaire. Okay. So most people believe that reaching millionaire status requires a big income. But, according to this national study of millionaires, it shows that the average millionaire makes far less than you would expect.
So 33{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires never made more than a hundred thousand dollars a year at any point in their career. 33{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760}, a third of them never made more than a hundred grand a year.
Okay. 31{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires made around a hundred thousand dollars a year over the course of their career.
And then from a whatever we would call this your position in your company only 15{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires were in senior leadership roles, executive roles like CEO, CFO, and stuff like that.
Yeah, only 15{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760}. So that means 85{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} were, middle to lower level employees. That’s very interesting. Yeah, that’s exciting.
It’s less about what you make and more about what you do with it
Linda: Yeah, and then we talk about this in the book (Simple Money, Rich Life) and in TFF, True Financial Freedom, about Mike Tyson. And Ronald Reed. Ronald Reed is this, gas station attendant and a janitor, right?
Bob: Yeah.
Linda: Made that salary and had what? Eight million dollars when he died? And I mean you, you honestly give several other examples of people like that who’s have tiny salaries. But yeah, by the time they die, they’re like They’re rolling in it.
Bob: Yeah, that’s why I always say it’s less about what you make and more about what you do with it like we have so much more control over the outcome and it’s the salary it can help no doubt.
Yeah, but as we see with Mike Tyson who earned three hundred or four hundred million dollars over the course of his career in blew it all. Like it’s not about how much money you make, you know?
Linda: It almost seems like the tides are shifting because you know when our grandparents we think about our grandparents and they would work at a company for What, 30, 40, 50 years, get their watch, get their pension, it was like that their loyalty to a place would take care of them in their retirement.
And then you see our parents generation who it wasn’t as much like that. Like you had to start working for it. And we saw what was happening when people weren’t working for it. Because they were still in that transition of, but the company is supposed to take care of me, and they’re not doing that anymore.
Bob: Yeah.
Linda: Yeah. And now I feel like people are getting it. Don’t you think?
Bob: I do. I really do.
Linda: It’s just, yeah, it’s interesting. The education is coming out a lot more to where people are like, no, you have to be investing. Yeah. Yeah. And hopefully we’re all getting good information and not just, Just buy crypto.It’s the best thing.
Bob: I love your investing advice, hun. You need to write a book. Alright. I already did, bro. I’m just kidding. You did write a book together. Millionaire.
Secret #3: Millionaire spending habits look a whole lot different than everyone has led us to believe
Bob: Number three, millionaire spending habits look a whole lot different than everyone has led us to believe. Whether that is commercials, whether that’s Instagram influencers, YouTubers with their Lamborghinis or whatever else. The millionaire, the true millionaire, habits are very different.
Okay. So most people, when they think of millionaires, they think of. I got my $100,000 Mercedes, or I got all these Gucci bags. And yeah, whatever, all this stuff. Flashy is what we think.
Linda: Yeah.
The Millionaire Next Door
Bob: Yeah. But the truth is that it’s very different. And The Millionaire Next Door, that book I read, whatever, 10, 15 years ago, that highlighted this idea as well and just blew my mind. Because, everything I thought a millionaire was it’s nope. It’s completely different Yeah, they actually drive Hondas and they, you know…
Linda: We need a Honda. He read that book. He was like, we’re buying a Honda.
Bob: Anyway, so bottom line is, I think there’s just this massive confusion over what real millionaires actually do with their money. And again, coming back to that first point of success leaving clues, it’s like when we understand what they actually do and not what they, the wannabes do. Not what the posers do who are trying to make it look like they have a lot of money.
And there’s a proverb, too, and I forgot which one it is, where it says something to the effect of there’s one who pretends to be rich but has nothing, and then one who pretends to be poor or something and has great wealth, or something.
Anyway, so 94{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires said they live on less than they earn. Okay, 94{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} say they live in less than they earn.
Credit Card Balances
Bob: And this one is really cool. They have to. 75{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires reported that they never in their lives have carried a credit card balance. That is a testament. That is telling something right there. That’s interesting.
Linda: 75{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} reported they have never in their lives carried a credit card balance, in their lives?
Bob: Yeah.
Linda: Wow. That’s pretty cool. It’s interesting because if they’re growing up middle class or lower class. I don’t know, I just find that interesting. Wow.
Bob: Yeah.
Bob: I think the big takeaway from this is… stop carrying a balance. You’re carrying a balance on your credit card and you want to move forward financially, and I think we all know this, but this is just like some emphasis to that point (find out how to get out of credit card debt).
Linda: That, that’s not helping you get where you want to go.
Linda: Quit being showy.
Bob: Quit being flashy.
Linda: Quit being flashy. Yeah.
Our SeedTime community is smart, they get it
Bob: Quit trying to impress other people. Quit spending more than you earn. And I know I know all of our SeedTime community who’s listening to this got that.
Linda: Cause you guys are all smart. Don’t receive an inheritance. If someone wants to give it to you and reject it.
Bob: No, I don’t. I disagree.
Linda: I’m just kidding. I know, I’m just making a joke.
Bob: But let’s get in the position that when that inheritance comes, that we can multiply that, we can use that for the advancement of the kingdom in such a significant way.
Bob: I know, I’m just making a joke. But again, that’s why it’s so important that we get these things right. And we’re not just yeah, whatever, my parents are going to leave me a million dollars and I’m going to go blow it on three cars, this $250,000 Lamborghini.
Linda: I had a friend a long time ago who, she got an inheritance when she was like 18. And it was gone so fast. Like leading up to it, she was like, Oh man, I just can’t wait. I’m going to do this.
And I was like, okay, that sounds like I wish I had it. I was not spending money wisely, but I did watch how fast it went. And it was like, that seemed you are going to be a bajillionaire, and that money was gone within two years, probably.
Fascinating thing about lottery winners
Bob: Yeah I’ll just mention this, because we were talking about this we’re recording this class for the Glorify Bible app right now, which I’m super excited to do, and so that’ll be coming out soon, and we’ll let you all know about it when it comes out.
Linda: But I like that app, too.
Bob: Yeah. And if you haven’t checked it out, you should. They’re just doing some cool things in there, but anyway, all I have to say in this, we were just talking about this the other day in one of the lessons we were creating there was a study done of lottery winners, and then I found this to be fascinating. But lottery winners, doesn’t matter how much money you win, six months later, you are no happier than you were before you won.
So like that initial burst of happiness, because whoa, we just won 10 million or whatever. It’s it’s super exciting for a day and maybe even a week or whatever. But, you quickly return down to your normal levels of happiness. And, I think that’s so telling because so many people just think, this is going to change my life for the positive in so many ways and, yeah, for the rest of my life.
Linda: And the reality is that, more money, more problems (what the Bible says).
Bob: That, but also, and this study doesn’t even go into all the problems, because when you actually study this out, like it’s really tragic like there are there’s a high percentage of lottery winners who end up saying I wish I would have never won.
Linda: Oh my gosh, because of all the problems that ensue and whatever family challenges because everybody’s asking you for money and all the drama that happens.
Bob: So anyway inheritance is slightly different In some ways, but point is that excitement, that rush, it wears off.
Linda: Yeah. And it doesn’t last forever.
Bob: And that, I think that’s really good to know.
Linda: Yeah, totally. Because I think so many people go into it like, yes, this is gonna change my life for good forever. And I’m gonna be happy forever. And it’s no. It’s not necessary. You got a few days. Enjoy it while it’s fun.
Bob: Yeah. Then it’s going to wear off. But anyway.
Secret #4: 75{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires said that consistent investing over a long period of time is the main reason for them reaching millionaire status
Bob: All right, let’s go to the fourth one. All right. This one is that millionaires are investors. Okay. So this study that was done determined that a key determining factor of whether or not people are going to be millionaires was that they were investors.
Linda: They were investing their money.
Bob: So 75{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires said that. Consistent investing over a long period of time is the main reason for them reaching that millionaire status.
Linda: Yeah, and I think that’s the only thing that makes sense given all the other things. Not having an inheritance and growing up middle to lower class and also not earning a high salary, right?
Bob: Yeah, but I think the important takeaway, too, that I’m often trying to remind people is you aren’t going to be able to save your way to become a millionaire. That’s addition.
Multiplying your money
Bob: Okay, but we need to be thinking in terms of multiplication, right? How do we multiply the money that God’s entrusted us with and that is through investing that is through taking some level of calculated risk.
And this is why you need to learn how to invest don’t just run out and start doing it. and we have a 10x investing course we’d be happy to show you everything we’ve learned on how to do that, But the point is, you need to use some wisdom, learn something about how to invest your money, and then take a calculated risk on how to do that.
And this is the Parable of the Talents. We go back to that, that parable, and the two guys who took some risks were praised, but the one who took no risks and buried the talent in the sand, like the master did not have good things to say to him.
Linda: Because he didn’t just want his money back in this. He was asking for you to multiply it.
Bob: That was the implication that was, yeah.
Linda: Yeah, and we’ve talked about how as long as the earth remains, these things will remain, cold and
Bob: heat. Yeah, summer and winter. I forgot the other one. Seed time and harvest. Seed time and harvest. I don’t know.
Linda: Yeah, And that idea of, he’s basically telling us go do this. Multiply.
Bob: Multiply. Yeah.
Linda: And when he, and his, the system that he sets in place is he didn’t want, like he could have just created one apple tree, but he didn’t. Or one apple that he didn’t do that either like it’s seeds in it and the season of multiplication
Bob: Yeah, so that you don’t you plant a seed and you don’t just get an apple you get an entire tree with lots more on it.
Linda: I mean, it’s just it’s amazing.
Bob: If you actually think about the system that God set in place, it’s absolutely amazing. And we have the, is same opportunity to do that with our money. Allow our money to multiply, to create more money.
Linda: Yeah.
Bob: And anyway, and that’s what millionaires do. Yeah. So this is also easy and in terms of having a starting point with this, I’ll give you this right here.
401k and 403b plans
Bob: So 80{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of millionaires invested in their company’s 401k or 403B plan. So four out of five millionaires invested, were invested in their 401k plan. So that’s the low hanging fruit. That’s the simple and easy way (a no-brainer investment). And again and I’ve been annoyed doing what we do. I feel like I’m finding more and more.
I have to repeat myself and say the same thing over and over again. And one of those things is that if your employer has one of these. And they have a matching program, like absolutely do it.
And I’ve said that so much, so I’m I don’t know if I need to say this anymore. But I just read the stat the other day, there’s only like For the average 401k program, it’s only 20{c87e2df4b343d0515d304e127afe4653a549475791ab451641a18e09bd64e760} of people are actually taking advantage of it.
Go to your HR rep today. Maybe we need to talk about it more.
Linda: No, but really, it’s HR that you go to?
Bob: Yeah. You go to HR and you say, I want to start contributing. Or find out what I’m contributing and make sure it’s… It’ll take you probably 15 minutes. You go in there, you find your bank account, your routing number, give them a phone call.
Check…check… or whatever, it’s simple, but yeah.
It’s worth your time
Linda: One of the things that you always do to me, because I hear that and I go, Oh man, I gotta fill out paperwork, blah, blah, blah, blah, blah, blah, and then I delay it, but one of the things that you always say to me is, If I was going to pay you a million dollars to fill out that paperwork, would you do it?
If I was going to pay you a million dollars to Do you know what I mean?
Bob: More appropriately is, what is the dollar per hour return on doing this thing? Sure. And I think that just makes it a little bit clearer. Sure. For example whether refinancing your mortgage or something that’s a great one.
It’s no one wants to do this, but if that’s a $10,000 task and it’s going to take you five hours, it’s like, all right, would you be happy to be paid $2,000 an hour to go refinance your mortgage? Yes. It’s yes.
That makes it so much more enticing. And so in the case of this, it’s a lot harder to measure what it actually is going to turn into, but…
But again… But still… For a dollar per hour task, it’s you probably don’t get anything, especially if your employer has a matching program where they’re giving you free money. You put in a dollar and they’re like, we’re going to put in a dollar for free for you. It’s that’s absolutely amazing.
And by the way, we have that. So if you ever want to come work for us, we have a matching program in our firm.
Work for SeedTime?
Linda: What are we hiring for? I don’t know.
Bob: Household manager? I don’t know. We do have a couple positions that we will be, Probably putting some feelers out for at some point soon, but I’ll just leave this I’m gonna throw this out there if you do something and you’re like I think I could be a really big asset to what SeedTime is doing, and I love their mission, send us an email send us a DM.
We’ll leave it at that if you have great ideas, you’re like man they’re doing this well. But I’m an expert at that and I could help them take that to the next level. Send us your ideas. We’ll leave it at that.
Not a single millionaire in the study said one individual stock investment was a big factor in their financial success.
Bob: Oh, let me read this too. This is really cool. Oh good. Not a single millionaire in the study said one individual stock investment was a big factor in their financial success.
Linda: Really? So what that means to me. So they didn’t buy Apple back when it first came out or something like that.
Bob: It wasn’t just a one single stock, like Starbucks. To me what that means is that they were investing in mutual funds or index funds. With a wide range of investments and not just one single moonshot stock that did really well.
In which and I great that’s what we teach in our 10x investing course. And you know the second half or plus package of the course like I get into stock picking because we have had some big stock picks that paid off our house, so it’s like we’ve gotten that and that’s great.
But at the end of the day I agree with that. It’s a much simpler approach and more consistent without the ups and downs. Because I’ve had stocks that have gone to zero. So it’s sometimes it works really well and big things happen. Krispy Kreme, that was one. Anyway, long story short, we won’t get into that. But point is that sometimes individual stock goes up, sometimes it goes down.
Linda: Those donuts tasted really good too. That’s a bummer.
Bob: I do remember that. You like Krispy Kremes?
Linda: I did Krispy Kremes. You get them hot. How cool is that?
Bob: They’re great. Anyway, okay So we have a I got a sweet tooth.
Linda: Do you know it’s time for chocolate and I don’t have any are we out?
Bob: Yeah, and it’s on its way. So if you want to bring us some chocolate, we live in Franklin. That’d be great. Linda would appreciate that if you want to just come on by.
Fun fact
Bob: Fun fact This fun random story I had someone when our book came out send me an email and said, Hey, I’m flying in from California. I want to be in Franklin. I’d love to come by your house and have you sign the book.
And I’m like, sure, like I, I didn’t know this person at all, but wanted me to come by and I gotta say. Sure. If it was you, I might not have said yes, but but since it was me asking to come, I went puff my chest real big when I opened the door with a shotgun.
Linda: This is Tennessee.
Bob: Here’s my sharpie to sign the book. And I got my shotgun. But anyway, yeah.
Linda: So if you saw our front lawn, that would not make any sense.
Bob: We live in a subdivision. So it’s, it would be a short front yard. But, anyway, it was fun, and the guy loved the book. And even more interesting than that he told me, he’s not even a Christian, but I just really loved this book.
And I was like, scratching my head, I’m like, I don’t… I am surprised. Because before I considered myself a Christian, I wouldn’t have liked this book. But anyway, I thought that was really interesting, and we had someone else the other day reach out to us, who just absolutely loved the book and said that they weren’t a believer and didn’t really get all the God stuff we talked about. But, really loved the book. And I’m like man Lord, you’re doing things with this that I never expected. So that’s pretty fun.
Linda: It’s just a seed planted. You know what I’m saying?
Bob: Seed planted. Yeah.
Our Prayer
Bob: God I just pray for both those people right now that you’d move on their lives and with our hearts and they come to know you in the fullness!
Action items
Bob: That is all for today. Hope you’ve enjoyed hanging out with us. We’ve enjoyed hanging out with you.
Linda: And yeah, what is your action item for this?
Bob: Yeah, a couple things, like some of these things we talked about, just think about this in your own life. All right. If success leaves clues, like what are the things you can apply? And so again, maybe that’s the 401k, like just starting there.
Linda: If you haven’t done any of this, right?
Bob: Maybe it’s, yeah, not being so flashy with your money. Maybe if that’s it, not trying to keep up with the Joneses. Don’t worry that your neighbor just got a new car. Keep driving your car that’s paid off. Just enjoy it. Keep driving that Honda.
Linda: Drive that Honda. That’s the millionaire maker there, man.
Bob: So anyway, that’s all for today. We will see you in the next episode.
Linda: We love you. Thank you for being part of the SeedTime community.
Bob: Yeah. See ya.