He’s 55, he’s a teacher, and he has $2 million. He’s probably not the typical person who thinks you’re a millionaire.
The evidence, however, indicates that the average millionaire is just like him.
Most millionaires are like the person I talked about, or the person at the top, who is also a millionaire. Normal people.
People with middle and high incomes, with good spending habits. Now in middle age. They’ve had good spending and investment habits.
It’s a numbers game. Being a millionaire means having $1M or more in net assets.
You can’t have $1M or more in net assets if you spend more than you get.
So for most rich people, even though they are rich now, they are not big spenders, but they have less money worries and more choices.
Or put another way, if you have $2M-$3M at age 55, you can:
Travel the world
Living off the 4% rule – 80k-120k in this case.
Most people who are unreasonable end up bankrupt: where are the more than 120,000 billionaires?
The world is full of previously wealthy people. What saves some people is that they realize that the consumer lifestyle is overrated.
They spend 2-3 years after they get high incomes, where they overspend.
It becomes boring, and they have a more balanced life. I know several frugal and rich people, who are just frugal, because they tried the opposite for a few years, and realized that it doesn’t make sense.
Staying in a 5-star hotel won’t make you any happier than a 4-star hotel.