8/3/2019 What Would Life Be Like as a Millionaire

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Ever dream about what it would be

like to be a millionaire? Almost

everybody does at one time or

another. In their minds, they see

chauffeurs, yachts, mansions, glamorous

clothes, vacation homes on palm-treed

islands. Lots of free time. No worries.

If you want something, you buy it. And a

servant carries it into the house for you.

Money is no problem, right?

Lets see how much you really know about

millionaires. Take The Millionaire Quiz.

Well dim the lights and cue the background

music. True or False?

1. ___ Most millionaires inherited

their money.

2. ___ Millionaires dont actually work. They

have people who work for them.

3. ___ Millionaires shop in very exclusive

stores, not where ordinary people

in America shop.

4. ___ Millionaires drive impressive cars.

5. ___ Most millionaires make their money

in glamorous ways theyre

basketball or football players, rock

musicians or movie stars.

6. ___ Millionaires have lots of credit cards.

7. ___ Most millionaires own their business.

8. ___ Many poor people become

millionaires by winning the lottery.

9. ___ Most millionaires are college

graduates.

10. ___ Theres a good possibility that you

can be a millionaire.

ANSWERS:

9.Mostmillionairesarecollegegraduates.

TRUE.4outof5millionairesarecollege

graduates.24%haveearnedmastersordoctoraldegrees.Another14%haveearnedmedicalorlawdegrees.Mostmillionairesare

welleducated.

10.Theresagoodpossibilitythatyoucanbeamillionaire.TRUE.Itwouldntbehard

todoeither.Letssayyouinvest$3,000

everyyearandearnjustunder8%interest.Youbegininvestingwhenyouare21.Bythetimeyouare64,(retirementage)youwill

havesavedamilliondollars!Ifyousavemore,orifinterestratesrise,youllbea

millionairesooner.Wanttohavesomefunplayingwithnumbers?Gotowww.themint.org.

IntheTryItsection,youllfindacalculatorto

dothenumbersforyou.

1OddsforPowerball,January23,2003.

1.Mostmillionairesinheritedtheirmoney.

FALSE.Only19%ofmillionairesweregiven

anyincomeorwealthfromtheirfamilies.

2.Millionairesdontactuallywork.

FALSE.Mostworkmorethan45hours aweek.Thatsmorehoursthanmost employeesworkinaweek.

3.Millionairesshopinveryexclusive

stores,notwhereordinarypeoplein

Americashop.FALSE.43%ofmillionaires haveSearschargecards.

4.Millionairesdriveimpressivecars.

FALSE.Only23%ofmillionairesdrivea

newcarthatis,onemanufacturedinthe currentmodelyear.

5.Mostmillionairesmaketheirmoneyin

glamorousways.FALSE.Mostmillionaires

workinveryordinaryjobs.Theyarepaving contractorsandownersofmobile-home parks,etc.

What would life be like as a millionaire?

6.Millionaireshavelotsofcreditcards,so

thattheyalwayshaveenoughmoneytobuy

thingsonthespurofthemoment.FALSE.

Manykeeponlyonecreditcard,andmostpayitoffinfullattheendofeachmonth.

Millionairesdontlikepayinginterestondebt.

7.Mostmillionairesowntheirbusiness.TRUE.Lotsofpeoplethinkthatmillionaires

workforlargewell-knowncompanies.Most

millionairesconsiderthemselvestobeentrepreneurs(peoplewhostarttheirownbusinessfromscratch).Thisfactmayexplain

whytheyworkmorehoursthanyouwouldthinktheyarethedecisionmakersfor

theircompanies.

8.Manypoorpeoplebecomemillionaires

bywinningthelottery.FALSE.Thechancesofwinningthelotteryare1in12millionto120million.

1Howlikelyareyoutowinthe

lottery?Youhaveabetterchanceofbeingstruckbylightening.Yourchancesofthatare1in9million.

A f a m i l y s g u i d e t o t e a c h i n g c h i l d r e n t o b e m o n e y s m a r

PerfectcentsNumber 8

8/3/2019 What Would Life Be Like as a Millionaire

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The Northwestern MutualLife Insurance Company Milwaukee, WIwww.nmfn.com

19-0151-09 (0203) (REV 1204)

It turns out that millionaires may not liveas extravagantly as we suppose. Theyshop at stores like Sears. They drive cars

that may be a year or two old nearly10% of millionaires drive Fords! They payoff their credit cards to avoid debt.

Theyve earned their money ratherthan inheriting it, and they put in a fullworkweek just like most of Americasfamilies. They didnt win the lottery, andthey believe education is the pathway tosuccess. Most spend lots of money toeducate their children.

Actually, all of this isgood news for the restof us. It means that ifwe get an education,work hard, save ourmoney, and avoid debt,we, too, might becomemillionaires.

The book, The Millionaire Next Door,2

found that people who becamemillionaires got there because theyworked hard, didn't give up, planned,

and were careful with their money. Howsthat for the opposite of the TV image?

Another interesting fact that theseauthors found was that many peoplewho live in expensive homes and driveluxury cars dont have much wealth they live paycheck to paycheck becausethey spend all that they earn.

Heres the point thebook makes: Wealthis not the same asincome. You can earna good income andblow it all on expensivethings. Wealth is themoney you accumulate.You save it and investit. Many wealthy people

do not live in expensive homes, andtheir personal habits seem prettynormal. Why arent millionaires moreextravagant? Perhaps thats why theyre

millionaires. Its something to think about.

2 Thomas J. Stanley, Ph.D. and William D. Danko,

Ph.D., 1998.

$

First of all, US Savings bonds werecreated to raise money for the Americangovernment during the World Wars I andII. People thought they were such agood idea that the bonds continue tobe offered today. When you buy thesebonds, you are really lending thegovernment money. The governmentpromises to return your money plusinterest after an agreed-upon amount oftime. Your money is safe with US Bondsbecause the US government guaranteesthat your money will be paid back to youwith interest no matter what.

Series EE bonds

These bonds are called discount bonds,because when you buy them, you payonly half their face value. So you couldbuy a $100 bond for $50. Each yearthe value of the bond grows becauseyou are earning interest on the amountyou paid for the bond. Even after thebond reaches its face value, you canleave your money in the bond and let

it continue to grow. How long? Thebond is good for 30 years from itspurchase date. Bonds come in facevalues of $50, $75, $100, $200,$500, $1,000, $5,000, and $10,000.

Series I bonds

These bonds are not discount bonds they are sold for their face amount.They, too, are sold at different values,just like Series EE, but I Bonds earntwo kinds of interest:

A fixed rate interest, the interestrate available at the time youpurchase the bond. This rateremains the same for the life ofthe bond: 30 years.

A rate that rises and falls with the

Consumer Price Index for UrbanConsumers. If inflation (the price ofthings in general) rises or falls, therate of the bond rises or falls tokeep pace with the economy. Theserates change twice a year, in Mayand in October.

To learn lots about US Bonds, go towww.savingsbond.gov .

Wealth is not

the same as

income. Wealth

is the money

you accumulate.

TWO SAVINGS TIPS1. Regular savings can make

you a millionaire even if your

income is modest.

2. Because of compoundinterest, the earlier you start

to save, the better.

Facts about millionaires

Did some of the answers in The

Millionaire Quizsurprise you?

One way to save US savings bonds

Everybodys got to start someplace.

How about those US Savings

Bonds you got as a gift? Do you

know what they are and how they work?

This information is provided only to explain savings bonds as a savings vehicle. Northwestern Mutual

does not endorse bonds or recommend that readers invest in US bonds or bonds of any kind.