Secret to Wealth Part 2 -The Answers


If you were looking for that special formula to get rich quick, an answer to picking the right stock, or how to game the system – you may have been disappointed, but you shouldn’t be since the power is in your hands. That’s right, the vast majority of millionaires earned it on their own without any money in inheritance or winning any money, and you can and will also.

Today’s actionable step is to think about and write down what you would do with your life if money was not an issue. Assume you’ve reached financial independence and work for money is an option. If you could really do What you Want, with Who you Want, When you Want…write down what you’d do with your life.

Chilling on the beach drinking Mai Tais or Pina Coladas might last for a month or two, but life is long and that will ultimately get boring pretty quick for the average person. Try to answer what would be your purpose and mission if you didn’t have to worry about working for the man? If you’re having trouble with this, it might help to write down 10 things that truly bring you joy. Money won’t bring you happiness, but it is a great tool to really help you live your values which provides true fulfillment.

FYI, I tend to stray off on tangents and get passionate about some items so when I catch myself I separate those rants as “Soapbox”…sorry can’t slow my brain when going on a rant, but hopefully you find them useful or you can just skip past them.

Answers to Questions About Millionaires and Wealth

  1. What percent of Americans could cover a $1000 emergency with savings (i.e., not requiring using credit/debt to pay for a bill like new car tires, etc.)?

39-40% (consistent at least from 2018-2020)

  1. What percent of millionaires in US are first-generation, self-made millionaires (i.e., no inheritance, no lottery, etc.)?


  1. What was median household income of a family when they built their first $1M ($1 million) in net worth (i.e., Assets – Liabilities = $1 million)?

$89,178 – that means that half of households made less than $89,178 when they first reached net worth of $1M!

  1. On average, how long did it take these millionaires to build their first $1M in net worth?

28 years

  1. What is the average person’s age when they built their first $1M in net worth?


  1. What percent graduated from college (4 year bachelors)?

88% compared to 33% of general population

  1. What percent attended elite prestigious private school (i.e., highly expensive)?


  1. What percent attended public state schools (i.e., relatively affordable)?


  1. What percent of millionaires said single-stock investing was a significant factor in their financial success?

0% – that’s right, no millionaire said single-stock investing was a significant factor in their financial success. Single-stocks did not even make the top three list of factors for reaching their net worth. Doesn’t mean some didn’t find it important or helpful, but if it were that easy everyone would be doing it and listing it as a significant factor.

Before moving on, take a moment to see if those answers aligned with what you expected, or were you biased like me and a bit surprised by some?


Time to review the answers and see if/why they make sense…at least in my opinion – let me know if you agree or think I’m just a dumb-a$$

1. Only 40% of Americans can cover a $1000 emergency with savings…while sadly pathetic, this was not a surprise at all. Hell, at 14 I started repeatedly loaning my stepdad ~$600 (interest-free…thought I was helping the family like the poor ignorant sap I was) and didn’t realize at the time that my mom likely didn’t even know, but my savings as a paperboy were keeping our lights on at home. Sadly, studies show the numbers are probably even worse for the military community, but that’s what we’re going to correct – we have the tools, we have the talent, and better than the rest of the US, we should have instilled the discipline to make real change.

2. 80% of millionaires are first generation and didn’t receive an inheritance or some other pot of gold? This study has been repeated many times over the years even going back to 1892 with consistent results. The fact that most people was a surprise for me when I first learned that in the Millionaire Next Door… Wait, to become rich you have to have been born into it, right? What a load crap! Any of you initially have this bias like me as a child based on your upbringing? Sadly a victim mentality, and that’s what I love about this statistic – building wealth is really up to you and nobody else – so don’t play the victim, take charge and start your wealth journey today.

3. Probably my favorite fact, that the median* household income…that’s right household not just an individual was under $90k. Why this is my favorite fact…because it means that half of the millionaires actually had a household income less than $89,178 when they built their first $1M in net worth! It doesn’t take a large income to grow wealth, it’s all about spending less than you make and investing the savings.

*NOTE: When looking at finances in general, “median” (the middle value in the list of all the numbers) is typically far better than the mean (“average” people are used to that equals sum of the terms divided by the number of terms). Median is better in finances since the numbers are typically very skewed, and in this case a few super high-incomes would skew the “mean” up very high, whereas the middle number is a much better overall average

Soapbox: There are so many people with high incomes that still live paycheck to paycheck or have huge debts and sadly no wealth. Isn’t the road to wealth being a professional athlete? Without financial literacy that career is sadly an epic fail. Sports Illustrated reported that 78% of NFL players have gone bankrupt or are in financial distress within 2 years of retirement. 60% of NBA players are in the same boat within 5 years of retirement. That’s right 8/10 NFL players and 6/10 NBA players are bankrupt or flat broke within years of retirement! WTF?!?! One example hits home hard and is difficult to swallow being a UT Longhorn graduate, and that’s the struggles of Vince Young. Vince nearly single-handedly defeated the huge favorite USC Trojans in the 2006 NCAA football national championship, likely still the best college national championship game ever (FYI, I later earned my MBA from USC so I’m consistently conflicted every time they’ve played since 2017). I looked forward to Vince having a great career and a great life. Instead, Vince filed for chapter 11 bankruptcy in January 2014 and has a current net worth of -$1.5M, that’s right a negative $1.5 million. There are several reasons for these horrible stats, but it mostly comes down to simple lack of financial literacy. Professional athletes lose their money by not following the simple principles of the Secret to Wealth – and are compounded by several other items: 1) many came from incredibly poor backgrounds and have family/friends that feel entitled to what they earned (violates spend less than you make), 2) spend extravagantly – have to show you’re rich which prevents you from building real wealth, 3) scammed by people saying they will make you great money risk-free…we are such a similar target as military; believing there is a better way to invest as a high-income earner-there are plenty of people that can’t wait to help you earn their own yacht while you lose money; 4) divorce – one of the top 2 ways to lose wealth.

4. 28 years to become a millionaire on average. There are two important points from this fact. First, building wealth is a slow steady climb and it takes a number of years, so be patient and stick with the plan. Second, the reason people that save and invest fail to keep with market returns is poor investing due to behaviour: chasing the huge return due to FOMO (Fear Of Missing Out – how many of you wished you had invested in Tesla, BTC, Gamestop in the last year?) instead of the boring but wildly successful buy and hold strategy, panicking during a market collapse and selling near the bottom and waiting to get back into the market until the rapid rebound has already occurred (market timing is a loser’s game). It’s ok to gamble and speculate with a small portion like 5% of your savings, but the rest of your investing should actually be boring-automatic contributions in low cost broad-based index funds-much more on that later and where I screwed up. Most would agree it’s the first $100k that seems to be the most difficult milestone, then are surprised by how rapidly the number goes up from there.

5. Age 49 is the average age of when people first become a millionaire. Totally makes sense when thinking about the median income and average time (28 years) it takes to become a millionaire. Someone starting in their early 20s being disciplined and investing some amount of money consistently will get there. Are you on track? A good formula to calculate your expected net worth is provided in The Millionaire Next Door (and sequel):

a. Expected Net Worth = (Age x Household Pre-tax Income) / 10

If you want to be a prodigious accumulator of wealth (and don’t we all), then you need to multiply that number by 2

b. Prodigious Accumulator Net Worth Formula = 2 x (Age x Household Pre-tax Income) / 10

c. If you’re young and starting out, this formula might be depressing since it actually takes some time to start earning, saving and accumulating wealth, so I like the Money Guy Show’s adjustment that accounts for early years:

Prodigious Accumulator Net Worth Formula = 2 x (Age x Household Pre-tax Income) / (10 + (40 – Age)) 

Example: Person age 26 with a pre-tax income of $40K:

Formula = 2 x (26 x $40,000) / (10 + (40 – 26) = $2.08M / (10 + 14) = $86.7K

6, 7 and 8. Discussing these 3 answers together since they are all related, but percentages are potentially changing in the near future with the rise of talent stacking regardless of college.

88% completed a college bachelor’s degree compared to 33% of the general population. 62% of millionaires graduated from public state schools (solid programs but relatively inexpensive) and 8% attended elite prestigious private schools (i.e., Ivy League, highly expensive schools). While I think this is changing in the high-tech sector as useful skills can be obtained more rapidly through certifications, in general a college degree (that means a 4-year bachelor’s degree, not a 2-year associate’s degree) has historically made a significant difference on potential salary and for certain professions will always remain a requirement.

Soapbox: Being in the military is the best way in the world to obtain a college degree with zero debt, so quit wasting your time and start working on it now. On an annual basis, bachelor’s degree holders earn $32k more per year than those with just a high school diploma, and earn $17.8k more per year than someone with an associate’s degree. Why is that? Does a degree make someone more intelligent or a better leader? Not at all, getting a college degree really just made me realize how little I knew, but it does show discipline and ability to complete a long-term goal which is highly desirable for most employers. In the military, we have a better ability to complete this debt-free far easier than most of the world, so take advantage of the opportunities right in front of you-don’t wait until transition when most of the work can be done while on active duty for free (CLEP test, PACE courses, tuition assistance (no brainer for enlisted, tougher decision for officers due to worse requirements). Get off your ass and take advantage of the opportunity right in front of you! Opportunity doesn’t fall into your lap, you have to seek it out and put in the work to achieve it!

Rant over, but the other important pieces about college are that most millionaires didn’t attend expensive, private colleges, but went to the affordable state colleges. Sadly, I haven’t found great stats on what percent attended community college before heading to a state or expensive private college, but know from personal experience this is a great way to obtain a college degree with minimal expense. Bottom line, we in the military have the best opportunity to get a good college degree with zero student loans, and improve our odds of making significantly higher salaries that those without a college degree.

9. 0% of millionaires claimed that single-stock investing was a significant factor in their financial success…stop. Reread that sentence. I was surprised to hear that, and yes many people in certain, few, highly successful companies became millionaires due to their own employer company stock (i.e., secretaries at Microsoft becoming multi-millionaires), but this stat showed that this was incredibly rare, and the majority actually earned it through their 401k invested in a diversified portfolio. Much more to talk about this, but as a young person, FOMO (fear of missing out) is so real that we gamble instead of invest (a separate topic we’ll delve into and define), and some may be lucky, but most get burned and the smart way to invest for the vast majority is simple and boring…but highly effective and typcially crushes the gambling/speculating/day trading results while absorbing none of your personal energy that can be used for higher pursuits.

So now what?

Do I have to read a bunch of books to get educated before I can start? No, that was one of my early mistakes while you can laugh about later. Check out the Secret to Wealth page and download the free resources to get started today!

Baby steps, just like sometimes just getting to the gym is the first step…


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