Millionaires: Who Are They, and What Can We Learn From Those Who Got There?

Millionaires: Who Are They, and What Can We Learn From Those Who Got There?

A client education article from Montage Wealth

The media throws the word “millionaire” around so casually that it can start to feel like there’s one on every block in town. In this article, I want to demystify both how millionaires actually built their wealth and the reasons most people never reach that level of financial success.

Let’s start with the definition. How many millionaires are there in the United States, really? That question is not as simple as it seems — the answer depends entirely on how you define “millionaire.”

How Many Millionaires Are There, Really?

1. Gross Net Worth Millionaires

At the highest level, a millionaire is any household with a gross net worth of $1,000,000 or more. Note the phrase “gross net worth” — that’s the metric most commonly used to define wealth. It includes everything you own: your home, bank accounts, retirement accounts, other real estate, investment accounts, and business equity. Add it all up, and if it totals a million dollars or more, you’re a millionaire by this measure.

Using this formula, there are approximately 23.8 million millionaires in the United States — about 8.8% of adults. [1]

2. Investable Millionaires

Now let’s get more granular. As a financial advisor, I exclude the home from planning purposes. Why? The equity in a home is non-productive — it generates no income now or in the future, and it’s actually an ongoing expense to maintain.

When we remove the home from the formula, we arrive at what’s called an “investable millionaire” — counting only spendable funds and productive real estate, such as rental property. Spendable funds include 401(k)s, IRAs, Roth accounts, and investment accounts. Once we remove home equity, the number of millionaires drops from 23.8 million to 14.5 million. [2] As you can see, home equity makes up a sizable share of the typical millionaire’s net worth.

3. Liquid Millionaires

Let’s take it one step further and look at “liquid millionaires” — people with at least a million dollars in liquid, spendable, unrestricted assets. This excludes IRAs, 401(k)s, deferred compensation, private business equity, and real estate, since withdrawing cash from those accounts often triggers taxes or penalties, and real estate and business equity simply aren’t liquid. Once we account for this, the number of true millionaires drops from 23.8 million to just 6 million — about 2.2% of Americans. [3]

The Millionaire Profile

Let’s look at the profile of a typical millionaire — it’s not what the media and popular culture would have you believe.

Age

• Average age: 61. Most millionaires today are between 60–79 years old — about 66% of all millionaires fall in this range.
• 24% of millionaires are between ages 45–59.
• 10% fall between ages 35–44. [4]

Below age 35, millionaires barely register on the scale. The median age of a millionaire is 50 — meaning half are above and half are below that age. This tells us it typically takes 25 to 30 or more years to reach this level of financial success.

Inheritance

Contrary to popular belief, most millionaires did not inherit their wealth.

• 81% of millionaires received no inheritance at all.
• 16% received an inheritance of $100,000 or more.
• 3% inherited $1 million or more.
• 95% own a home, and on average paid it off in 9.9 years. [5]

Millionaires tend to live a very average life, as we’ll see. What can we take from this? Millionaires take responsibility. They are proactive, intentional, goal-oriented, hard-working, and consistent. The lesson: what you think and what you do matter far more than what you make.

Mindset and Background

• 97% of millionaires believe they control their own financial destiny.
• 76% say that anyone in America can become a millionaire with discipline and hard work.
• 79% did not grow up in upper-class or upper-middle-class homes — most say they came from lower- or middle-class backgrounds. [6]

Income

This is key: roughly a third (33%) of millionaires never had a six-figure income in a single year!

• 31% averaged $100,000 per year in household income over their career.
• Only 7% averaged over $200,000 per year in household income. [7]

What History Can Teach Us About Building Wealth

If income isn’t the secret, then what is? Let’s step through the habits that separate millionaires from everyone else.

1. Time and Compounding — The Cost of Starting Late

If you’re young, time is your biggest ally. Here’s a simple illustration of why you should be contributing to a 401(k) or similar retirement plan as soon as you start working.

Each scenario below assumes a $243-per-month contribution to a 401k, maintained consistently to age 67, with an average market return of 8%. (This does not include an employer match or future contribution increases from career advancement — both of which would improve these numbers further.)

The hypothetical investment results shown are for illustrative purposes only and should not be deemed a representation of past or future results. Actual investment results may be more or less than those shown. This does not represent any specific product and/or service.

Notice that starting at age 25 requires roughly $122,000 of your own money to reach $1,000,000 — compounding contributes the remaining $877,685. Wait until 35, and the same monthly contribution leaves you at $430,522. Wait until 45, and you’re at just $173,957. Consider what a 10-, 15-, or 20-year delay really costs you.

Millionaires understand the power of small amounts of money, invested consistently over many years, having the potential to build into large sums at the end — and they understand that lost time can never be recovered. 401(k) plans are a key vehicle for helping build wealth today. Contributions aren’t an afterthought; they’re intentional, driven by self-discipline.

2. Avoiding Lifestyle Creep

This is one of the biggest mistakes that keeps people from having a million dollars or more later in life. Simply put as income increases, spending increases right along with it — but savings and investing often don’t increase, or worse, drop to zero.

In my experience, lifestyle creep typically begins in the $100,000-per-year income range. Vacations look different, cars get nicer, maybe the home gets bigger — everything looks nicer. To an outsider, it looks like they’re getting richer. But after 40 years of watching this pattern, I’ve seen that they’re often getting “broker.” The lifestyle is funded by high cash flow and often increased debt, and if the cash flow stops, so does the lifestyle. Sadly, the accumulation of real wealth never happened — at best, a couple more percent went into the 401(k).

Look at it this way: a business owner earning $350,000 a year who saves $10,000 a year vs. an engineer earning $175,000 a year who saves $25,000 a year — these two will end up at very different net worths by age 67.

People typically operate from one of two perspectives: the Stewardship or the Consumer.  One will generate wealth the other will keep you broke. The “consumer” is high visibility, high emotion, earn to spend, spend to show, show to feel good and impress. This is a cycle of exhaustion. Stewardship is low volume, low visibility, high on self-discipline – you earn to build, build to protect, protect to provide. This person doesn’t need an audience. He is no show. He is quietly building his wealth for generosity and legacy.  He can say “no” as easily as “yes”.

A good illustration is the lottery winner. He lacks the self-discipline honed over time and the financial structure to manage the overnight wealth. As a result, approx. 70% of lottery winners are broke within 3-5 years.

3. Steering Clear of Consumer Debt

Cars, boats, RVs, and general lifestyle spending all have one thing in common: they go down in value — dramatically. Millionaires call these “depreciating” assets, as opposed to “appreciating” assets, the kind that go up in value over time. The everyday millionaire avoids depreciating assets like the plague.

Cars are a necessary evil financially, so some millionaires may buy used, letting someone else absorb the initial depreciation hit. The average millionaire drives a Toyota, Honda, or Lexus (also a Toyota brand). The rest of their money goes toward appreciating assets. They’ll rent the cabin for $3,000–$4,000 for two weeks rather than take on the mortgage, insurance, and maintenance of owning one. They’ll rent the RV or sailboat rather than absorb all the upkeep costs of ownership.

4. A Practical Approach to Housing

The everyday millionaire pays off their home in about 9.9 years. [8] To them, debt is a distraction — it consumes cash flow that could otherwise go into appreciating assets. They don’t overbuy on the home; it’s practical, and it meets the needs of the family. They also understand that paying on a mortgage for 30 years means the house ends up costing far more than its purchase price.

For example: if you bought a Southern California home for $900,000, put $200,000 down, and financed the remaining $700,000 at 5% over 30 years, the interest alone would total $653,402 — almost as much as the loan itself. The total cost of the home would be $1,553,402.

When you buy a home, consider buying below the maximum amount you’re approved for. Start with a smaller home and grow into it. By the time you outgrow it, you’ll have paid it off or nearly paid it off. That equity, combined with your additional savings, moves to the next home, and you pay all cash — or nearly all cash — for it. At that point, you’re likely done. Remember, Warren Buffett still lives in the same home in Omaha, Nebraska, that he bought in 1958 — and he’s a lot wealthier than you or me.

Wealth Destroyers

Here are the things that can greatly harm wealth accumulation. Not all of them are controllable, but they need to be understood and managed as best as possible.

Divorce

This is the event that can decimate family wealth, and often the lower-earning spouse rarely fully recovers financially. You lose what we call “scale” — a single household is split into two, legal fees can wipe out savings and liquid cash, the compounding effect of two people saving together is lost, and the cost of living is split across two households. This doesn’t even account for the emotional toll it takes on the family.

Job Loss

A layoff earlier in life (ages 25–40) is generally recoverable. A layoff between ages 45–60 is much harder to recover from — earnings drop, 401(k) contributions stop, and the impact on wealth accumulation can be significant. We see evidence of this in Social Security claiming ages: the average age people claim Social Security is 62. This tells us that after the last recession, re-hiring in the late 50s was very difficult, and many people claimed benefits as soon as they were eligible.

Strategies That Can Help With Wealth Building

Raise Your Savings Rate

Before you start chasing performance — trying to eke out another 1–2% return by chasing a hot stock or the next shiny coin — raise your savings rate instead. If you have a $100,000 account, add $5,000 in savings, and, for illustrative purposes only, assume an 8% return that year (a historical average, not guaranteed, and not tied to any specific investment), you’ve gained approximately 13% on that account. The most important thing you can do is add money to the account(s).

Start with a 10% savings rate, then move to a “better” rate of 15%. Next, work toward the “strong” level of 20%, and once you hit 25%, you’re in the wealth-builder stage.

As stated earlier — start early. The discipline, self-control, and short-term discomfort of a leaner lifestyle can help transform you into a wealth builder. It’s very difficult to downsize once lifestyle creep sets in, because it has the appearance of going backward. Nobody wants to look like they’re failing after building the appearance of wealth.

The average millionaire doesn’t buy designer clothes, bags, or high-end cars. Most shop at Costco. Most millionaires don’t look like millionaires — they actively fight lifestyle creep. When they do buy high-end items, it’s with purely discretionary cash; they don’t need to borrow or stretch their cash flow to buy it.

If you’re in the “strong” to “wealth builder” savings stage and your income goes up, spend half of it and save half of it. You worked for it — enjoy some of it.

Build an Emergency Fund

Keep a cash emergency fund at your bank or credit union. Take your monthly cost of living and multiply it by six — save six months of living expenses as a backstop for emergencies or a job layoff.

Automate Everything

Another thing millionaires may do is build a process and automate their priorities. They split their mortgage into bi-monthly payments with added principal. Their 401(k) contributions are automated, and they max out their plan each year. Their savings are automated. The automation is the structure to keep the dollars going to the places they need to go to first, not last! Savings, 401k, mortgage paydown are not after thoughts, they are first dollar priorities for the millionaire.

Some millionaires attain their wealth through their 401(k) plans. Start your 401k with your first job and increase your contribution with each raise — not your lifestyle.

A Real-Life Example: Focus on the Right Things

Let me end with a real-life example that shows how important it is to focus on the right things. I had a client couple who were fixated on the rate of return on their IRA’s and having the perfectly allocated portfolio, constantly adjusting it for market conditions.

Here’s the kicker: they hadn’t added money to that IRA in three or four years. Meanwhile, they had inherited four rental properties sitting empty that needed repairs to get rented out at $2,000 per month each — which would have generated $8,000 per month in income. Instead, they were focused on the wrong priority, trying to control something that wasn’t the priority, and missing out on $96,000 a year in free cash flow.

Let that sink in.

Keep More of What You Work For.

[1] UBS, Global Wealth Report 2025 (Zurich: UBS Group AG, 2025), 12–15.

[2] Robert Frank, “The United States Is Home to More Than 14 Million Millionaires, New Data Shows,” CNBC , May 28, 2025, https://www.cnbc.com/2025/05/28/united-states-millionaires-billionaires-wealthy.html.

[3] Henley & Partners, USA Wealth Report 2025 (London: Henley & Partners, 2025), “Methodology,” https://www.henleyglobal.com/publications/usa-wealth-report-2025.

[4] National Study of Millionaires, Ramsey Solutions, pp. 105–112.

[5] National Study of Millionaires, Ramsey Solutions, pp. 23–38.

[6] National Study of Millionaires, Ramsey Solutions, pp. 41–62.

[7] National Study of Millionaires, Ramsey Solutions, pp. 81–98.

[8] National Study of Millionaires, Ramsey Solutions, p. 104.

This article is for general informational purposes and is not personalized financial, legal, or tax advice. Please consult with a qualified professional regarding your specific situation. Neither Cetera Wealth Services LLC nor any of its representatives may give legal or tax advice. Securities offered through Cetera Wealth Services LLC (doing insurance business in CA as CFGAN Insurance Agency LLC, CA Insurance Lic# 0644976), member FINRA/SIPC. Advisory services offered through Cetera Investment Advisers LLC, a registered investment adviser. Cetera is under separate ownership from any other named entity. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. All information is believed to be from reliable sources. However, we make no representation as to its completeness or accuracy. Please keep your original official statement(s) in a safe, secure location. This information may not be relied upon for the purpose of determining your social security benefits or eligibility, or avoiding any federal tax penalties. You are encouraged to seek advice from your own tax or legal professional. These results are for illustrative purposes only and should not be deemed a representation of future results. Circumstances, solutions, and/or results are based on specific facts tied to unique client situations. Favorable results cannot be guaranteed even in a similar scenario. Each specific set of circumstances will differ depending on client needs and profile. Actual results may be more or less than those shown. Past performance does not guarantee future results. This assessment is that of the writer, and not the recommendations or responsibility of Cetera Wealth Services, LLC or its representatives. The solutions presented in this scenario are offered through Montage Wealth Advisors.