Many people have a misguided view of millionaires. In this video, you'll discover the 5 most common myths of millionaires AND why it's so important to your personal financial life to not have a false perception of millionaires.
Do You Believe Any of the 5 Myths Broke People Have About Millionaires?
I know I did when I was homeless and living out of my truck. I had plenty of misconceptions about the rich. Why is it so dangerous to have a false perception of a millionaire? Well, because it can prevent you from becoming a millionaire yourself. If deep down you think that becoming a millionaire will turn you into a person that you don't want to be, you're going to associate pain with becoming a millionaire, and therefore you will sabotage your own success.
No matter how many videos you watch, how hard you work, and no matter how much you invest in trying to become a millionaire, if deep down you associate pain with it, you will never get there. In fact, I have a great video called The Fear of More Money that goes into more detail on this fascinating psychological phenomenon. So, this isn't just an interesting topic. It could be that believing any of these myths is part of the reason why you're not a millionaire yet.
You're Too Smart for That Right?
What adds to the confusion is the reality that there is a small percentage of millionaires who do confirm some of the myths I'm about to share. And it doesn’t help that TV, movies, and the media magnify that small percentage. This gives broke people a reason to justify why they want to stay broke, arguing that they don't want to become one of those people. But not my audience. You all are too smart for that, or so I thought. I recently posted a video, How to Think Like a Multimillionaire, and I was surprised by how many negative comments there were about millionaires. It was then that I realized that even my own audience has an incorrect understanding of economically productive people. So, we're going to put that to bed right now. Here are the five myths of millionaires.
Myth #1: Millionaires Inherited their Money
Not so. In fact, the most detailed study I'm aware of on American millionaires was done by Dr. Thomas J. Stanley. In his two books, The Millionaire Next Door and The Millionaire Mind, he reveals the results of his research. The truth is, more than 90% of millionaires never inherited one single penny and they created their wealth with no handouts. What I've discovered is the majority of people that inherit money squander it because they didn't have to earn it, whereas millionaires had to earn it and they take better care of it. So, you can‘t make assumptions. When you see a millionaire, recognize that they created that wealth during their lifetime and without handouts.
Myth #2: Millionaires are Workaholics
While it's true that millionaires do have a consistent work schedule, they're not workaholics. On the contrary, they lead a very balanced lifestyle. This is because an unbalanced life would completely undermine economic progress. It leads to burnout or major financial setbacks such as divorce. Your spiritual, physical, and mental health, your family life and work life, all these different aspects of your life have to be in balance. And when all these aspects are balanced it creates maximum productivity, and productivity is a key ingredient in wealth building. You've heard the saying that the richest person in the world and you have the same number of hours in a day. So what makes the difference? Productivity.
On the other hand, a workaholic is unproductive but extremely active. My mentor drilled this lesson into me repeatedly. There‘s a huge difference between activity and productivity, especially in real estate. You can be highly active and be incredibly unproductive. So, if you think that you need to become a workaholic to be a millionaire, you couldn't be more wrong. It’s a balanced lifestyle that is the time management program of millionaires.
Myth #3: Millionaires are Greedy
I rarely meet millionaires who are greedy. In fact, most are very generous. I have a video on this subject called The Most Important Personal Finance Principle. And it might surprise you that I believe generosity is that most important principle. You see, over the long haul, greedy people end up with less. Look, money is like manure. If you let it pile up, it stinks. But if you spread it around, it fertilizes.
And remember that becoming a millionaire is a long-term process. As Sam Walton, the founder of Walmart said, “ Like most overnight successes, I was 20 years in the making”. To become a millionaire, you need to build bridges and foster relationships along the way. Which makes being greedy completely unsustainable because you end up burning bridges. So, if you think that becoming a millionaire means that you have to be greedy, you couldn't be more wrong. In fact, most millionaires are very generous because it is important to the entire process of becoming wealthy.
Myth #4: Millionaires are Dishonest
Honesty is a key component of wealth building. You simply can't lie your way to the top, trample others on the way up, and then expect to stay there. Eventually you will come down, and on the way down you'll have to deal with the people you hurt when you were on the way up.
My own personal experience doing deals with millionaires has been quite refreshing. They tend to be brutally honest, and that's helpful in doing real estate deals. And just to clarify, when I refer to millionaires, I define what that is in my video called The Millionaire Misunderstanding. I set the bar pretty high and it's rare to reach that level. So, if honesty is important to wealth building, dishonesty would set you back. Therefore, the golden rule, “do unto others as you would have them do unto you”, turns out to be a very productive wealth building strategy.
Myth #5: Millionaires are Self-made
The phrase "self-made millionaire" is an arrogant oxymoron. They're not self-made and don't come out of the womb wealthy. We learn from our environment, our experiences, our formative years, and from both good and bad examples. Many go on to learn from others through independent research, reading books, watching videos, and then from a mentor. After that, even when they've been mentored, they now need the help and cooperation of others to get things done. My staff is an integral part of my wealth because they're the ones helping to get everything accomplished. I can't be in all places at once. So, wealth building is about cooperation with others. It's not about being self-made. And the shortcut to becoming a millionaire faster is to be mentored by one.
These are the Five Myths of Millionaires. Sure, there will be some exceptions, but most millionaires:
- Didn't inherit their money
- Are not workaholics
- They're not greedy
- Are not dishonest
- And aren’t self-made
That means you don't have to turn into an awful person to become a millionaire! Quite the contrary, you may need to shore up some of your own weaknesses on your journey to becoming a millionaire. And along the way, you might become a better person too.
I just wanted to thank you for all your no nonsense videos. I’ve been a real estate investor for eighteen years with a sizeable porfolio. I watch every video that gets emailed to me. You always have the best info. Thanks for putting it out.
Some people are perpetrating these myths to keep people down and laughing about in private
Just because someone has millions doesn’t necessarily make them honest or moral. As far as most millionaires being generous ,that might qualify as a myth.
Henderson Went says
Thanks Phil , for your article ” Five myths -of-millionaires” , I find it interesting ,refreshing and most of all very imformative.
Sam Prindle says
I love that! Thank you Phil.
I just watched your video pertaining to millionaires .
Great video Phil !
Stephen R Schafer says
Loved this video, Phil. I have a triplex and duplex. I’m in my 70s now. I started investing in Real Estate Investment Trusts [REITs] about 8 months ago. Do you invest at all in such things? I found the dividends and growth comparable to the sale of my first house after 22 years of ownership and with less expense and labor. What do you think?
Phil Pustejovsky says
No. I own all of my real estate holdings; I don’t buy into other people’s deals such as REITs. BI maintain complete control over any investments I do. Furthermore, I can create 30%+ returns on my deals and no REITs on earth can compete with what I can do myself.
Chuck Borrelli says
I have to agree with Phil on this one. We have done about 50 flips. (Nowhere near what Phil has done) We do 30% all day and sometimes more here in Brevard county FL. This week we closed a flip in Mims. Purchase 90k. Rehab 55k We borrowed the entire purchase cc and rehab from a private lender we use. Sold it for 256k. A hundred grand is always a good payday. My wife became a RE broker along the way so we only pay one side of the commission on most deals. We also get a lot of retail listings through our lead generation site which are money in the bank in this market. But here’s the main thing you won’t get in a REIT. YOU WONT BUILD RESOURCES…. Personal connections built over time are critical to growth as RE investor.
George Telleria says
Splendid presentation, learned much. Thx u
Derrick Anderson says
Please send me your free book on how to become a Real Estate Investor.
Phil Pustejovsky says
How to be a Real Estate Investor
They play off others weakness’s. Guaranteed