Sources of Wealth

For those who continue to believe in the American Dream, the primary sources of wealth listed by affluent households in the U.S. continue to support that dream. Despite the fact that most of us believe that the rich guy down the street inherited it all….only slightly more than a quarter of Millionaires inherited any wealth.

The number one factor listed by affluent households of all wealth segments is Hard Work. This factor is followed by Education and Smart Investing in the households with $1-5 Million of Net Worth (Millionaires) and those with $5 Million to $25 Million (Ultra High Net Worth – UHNW). But in households with $100,000 to $1,000,000 of net worth (the Mass Affluent), Frugality trumps Education which falls into third place. Yet these four factors: Hard Work, Education, Smart Investing and Frugality are the top sources of wealth for all of the wealth segments. Inheritance was a source for roughly a quarter of individuals in all segments. 

Households with over $1 million are more likely to have a graduate degree than those in the $100,000 to $1 million segment. Thirty four percent of Millionaires have an advanced degree and 30% of the UHNW are similar. Fifteen percent of the UHNW are Doctors, 17% have a MBA and 6% are lawyers.

Another factor is in the definition of “Hard Work”. The UHNW are the most likely to work or have worked more than 60 hours each week while twenty two percent of both Millionaires and the UHNW worked 51-60 hours each week compared to only 8% of the Mass Affluent. The largest percentage of the Mass Affluent (47%) worked less than 40 hours each week.

Clearly other dynamics influence the success of each household. The data clearly shows, however, that households that are well-educated and work long hours are likely to succeed. And despite the fact that we want to believe that all rich people were just “lucky” or “they inherited it”, the facts show that the American Dream, driven by hard work and education, is still alive.