The U.S. Federal Reserve conducts investigations on American financial investigations every three years. This study is called the US Survey on Consumer Finance (SCR), and it is a representative picture of American wealth. It details participants’ assets and liabilities in the study and also shows changes in income, demographic characteristics, and U.S. wealth every three years. So you might be wondering, if there are so many millionaires, why are you not a millionaire?
What is the average millionaire profile in the United States?
According to SCR, American millionaires usually have many characteristics.
- About 18% of households in the United States are millionaires (about 23.7 million households)
- Millionaire families are usually older – most are over 55 years old
- Most millionaires are couples, or couples with children.
- Millions generally have better education, with an average net value of $1.9 million for college degree holders, almost four times the net value of colleges that have never graduated.
- Millions are usually self-employed (net worth $3 million) or retire (net worth $1 million)
- Millions are more likely to own their own home (net worth $1.5 million) than renters (net worth $150 million)
- Millions are more likely to own businesses, while business owners have higher income and wealth than non-owners.
A survey of consumer finance also found that most millionaires own stocks, have retirement accounts, and have consolidated investments such as mutual funds or index funds.
Is consumer financial survey accurate?
Since the survey of consumer finance interviews only about 4,000 people, you might be wondering if the data is accurate.
This is.
According to the annual report of the survey, the survey uses a sample called multi-stage regional probability sampling, a statistical term that means the Fed selected research participants to make them roughly represent the country’s representatives. The study deliberately excludes members of Forbes 400, which is the list of billionaires. Therefore, this study reflects the appearance of American wealth. It is as accurate as large economic research.
So, why are you not a millionaire?
If you find yourself not one of the millionaires included in this report, there may be many reasons. Here is a list of common reasons why many people fail to become millionaires:
- Your annual spending ratio
- You don’t pay first
- You have a lot of kids, you’re too young
- You don’t have a home
- You do not save or invest
- You keep changing things before you need them
- Your income is low
- You won’t live a healthy life
- You don’t read
- You’re divorced
- You have at least one bad habit, which is a habit of losing money, such as smoking or gambling
- You’re young
- You won’t negotiate premium ticketing items like cars.
If you are not currently a millionaire, or are not a family member, then it is most likely due to the consequences of the choices you made in the past. The good news is that you can move forward from this point to make different choices to create the wealth you need. It doesn’t have to be easy and you need to avoid making mistakes that have restricted you in the past.
Want to be a millionaire – Here are some things you can do
Becoming a millionaire is simple, but over time it requires constant effort. Here are some immediate steps you can take to help you get on track.
- Start savings and investment as soon as possible. The survey of consumer financial data is very clear – it takes time to become a millionaire.
- Contribute the most to your retirement account. Almost all millionaires in the Fed study have retirement accounts. By contrast, few of the poorest in the study have these. So if you don’t have an IRA, or you’re not registered with the employer 401(k), do and contribute the maximum.
- Buy a house. Millionaires are more likely to be homeowners. Home ownership leads to forced savings, tax benefits, and the house usually appreciates value. Renters don’t have these advantages, and in the long run, homeowners have more wealth. If you don’t have one, buy an affordable home.
So by taking a few steps you might be able to see yourself as one of the millionaires in these reports in the near future.
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