A large salary helps, but you can become a millionaire without one.
When you think of the typical millionaire, the first thing that comes to mind may be someone at the top of their field with a huge salary. According to research by Dave Ramsey's company, Ramsey Solutions, that couldn't be further from the truth.
This year, Ramsey Solutions released The National Study of Millionaires. It's based on a survey of over 10,000 millionaires, who were asked about their careers, financial habits, and much more. The most common millionaire careers probably aren't what you'd expect, and they show that making a lot of money isn't the only way to build wealth.
The top five careers of millionaires
Here are the top five careers of millionaires, according to the Ramsey Solutions' study:
- Engineer
- Accountant (CPA)
- Teacher
- Management
- Attorney
As you can see, not every career is one that's typically associated with a high salary. While some millionaires make significantly more than average, that's not the norm. Only 31% of those surveyed averaged $100,000 per year over their entire careers. One-third never made six figures in any year of their careers.
To be clear, income certainly matters. When you earn more, you can save more money and invest more. But you don't need to be in the top 10% or 25% of earners to become a millionaire. You could achieve it on an average salary or less with the right financial habits.
Millionaire financial habits
The financial habit that nearly all millionaires share is that they're careful about their spending. Of the survey respondents, 94% said they live on less than what they make. Even after achieving financial success, they still largely avoid overspending. In addition, nearly three-quarters of those millionaires had never carried credit card debt.
To get on the path toward being a millionaire, it's crucial to save money every month. If possible, saving at least 20% of your income is recommended. Make sure you also avoid high-interest debt, like credit card debt, or pay it off if you're currently in debt.
Next is deciding what to do with that money you're saving. Most millionaires use one simple, effective method to grow their money -- investing. Here's what Ramsey Solutions found:
- Eight out of 10 millionaires invested in their company's 401(k) plan.
- Three out of four also invested outside of company plans (options include IRAs and individual accounts with stock brokers).
- 75% of millionaires said that regular, consistent investing over a long period of time was the reason for their success.
- No millionaire in the study said that single-stock investing was a big factor in their success.
Instead of single-stock investing, most investors are better off putting their money in index funds that invest in a large assortment of securities. For example, there are plenty of exchange-traded funds (ETFs) that invest in the S&P 500. That index tracks the 500 largest companies listed on U.S. stock exchanges. Funds like this are a simple way to invest and offer better returns than most investors get by picking stocks themselves.
Consistency pays off
The millionaires surveyed by Ramsey Solutions are predominantly people with reasonable incomes who saved and invested. There are, of course, outliers who made a large amount of money or inherited wealth. But the research shows that becoming a millionaire is an achievable goal, and that's good news for everybody.
Making more money can certainly help you build wealth more quickly, so it's smart to look for ways to raise your income. However, the key is to consistently invest your money. If you invest a portion of your income every month for decades, you'll likely be on track for a million dollars or more.
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FAQs
Engineer 2. Accountant (CPA) 3. Teacher 4. Management 5.
What are the top 5 careers of millionaires? ›
Engineer 2. Accountant (CPA) 3. Teacher 4. Management 5.
What major makes the most millionaires? ›
Top 7 degrees that make the most millionaires
- Engineering.
- Economics/Finance.
- Politics.
- Mathematics.
- Computer Science.
- Law.
- MBA.
A millionaire is somebody with a net worth of one million dollars. It's a simple math formula based on your net worth. When what you own (your assets) minus what you owe (your liabilities) equals more than a million dollars, you're a millionaire.
How many millionaires did Dave Ramsey study? ›
For the ten thousand millionaires we surveyed, it was the point in time when the person woke up and realized they could become wealthy and could set out on a sacrificial plan to get there. They may have been coasting along, investing and living frugally, but then they became very intensely goal-focused.
What job occupation has the most millionaires? ›
By those standards, the five jobs with the most millionaires are engineer, accountant, teacher, people in management, and lawyer. Doctor is sixth.
What is the most common job for billionaires? ›
Finance and investments remains the surest way to get ultra-rich. It's the industry with the highest number of billionaires, 372, including hedge fund and private equity tycoons, bankers, venture capitalists and fintech founders.
What creates 90% of millionaires? ›
Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.
What college degree do most millionaires have? ›
The top 10 degrees that millionaires earn:
- Engineering.
- MBA.
- Economics.
- Law.
- Business Administration.
- Commerce.
- Accounting.
- Computer Science.
Fittingly, the most common subject matter for higher education was economics and finance, suggesting that when you know money, you know how to make money! Billionaires such as Warren Buffett, Alice Walton, and Elon Musk have degrees in economics. The college degrees studied by billionaires in the United States.
10 high-paying jobs
- Pilot. ...
- Actuary. ...
- Computer network architect. ...
- Air traffic controller. ...
- Petroleum engineer. ...
- Lawyer. ...
- Physicist. ...
- Computer and information systems manager.
In fact, statistically, around 10% of retirees have $1 million or more in savings.
What percentage of Americans have a net worth of over $1,000,000? ›
Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.
What was Dave Ramsey's GPA? ›
There is no college degree that will make you a millionaire. Did you know Dave Ramsey got a 2.93 GPA in college and he is one of the most successful people in the world financially. We focus on School, College, and degrees.
How much is a good inheritance? ›
Inheriting $100,000 or more is often considered sizable. This sum of money is significant, and it's essential to manage it wisely to meet your financial goals. A wealth manager or financial advisor can help you navigate how to approach this.
Is a million dollar inheritance a lot? ›
Inheriting a million dollars or more can be a life-changing event and will come with its own set of stipulations. Whether you're already well-off or you find you've achieved millionaire status overnight, there will be some things you'll need to consider when receiving a large sum of money.
What profession makes you the richest? ›
1. Chief Executive Officer (CEO) Topping the list, being a CEO gets you the highest paying job in the world, no matter where you work. A CEO is the highest-ranked position in any organisation's structure.
What jobs are in the 1%? ›
Some examples include:
- CEO and top executives in large corporations.
- Investment bankers and hedge fund managers.
- Lawyers and partners in large law firms.
- Medical doctors and specialists.
- Tech entrepreneurs and venture capitalists.
- Professional athletes and entertainers.
- Real estate.
Choose the right career
And one crucial detail to note: Millionaire status doesn't equal a sky-high salary. “Only 31% averaged $100,000 a year over the course of their career,” the study found, “and one-third never made six figures in any single working year of their career.”
What car does a rich man drive? ›
According to an Experian Automotive study cited by the Financial Times, while society's rich are more likely to buy luxury brand cars than its less well-off, 61% of people who earn more than $250,000 are more likely to be driving Hondas, Fords and Toyotas.
