If there is one theme that I cannot resist writing about, it is the sharing of the alleged secrets of millionaires. Smart Money recently gave us a typically insipid example with 10 Things Millionaires Won’t Tell You. (Credit where credit is due, I found it via Free Money Finance.)
I am not sure if I have said this unequivocally before, but I am a millionaire. So, using the level of scientific inquiry typical of Smart Money and its ilk, let’s validate their secrets using this sample of one.
1. “You may think I’m rich, but I don’t.”
The "I don’t" part is basically true, but I’m not so sure about the "you may think I’m rich" part. When you get down to it, a million dollars ain’t really that much money. Something like 1 in 16 US households has a net worth north of a million. Equating millionaire with rich made sense a hundred years ago, but today I think the lifestyle most would associate with rich would start at around $10 million in net worth.
2. “I shop at Wal-Mart . . .”
Basically true, but I’m more of a Target guy. And I live in an under-Wal-Marted part of the country. That said, if you’ve never been to Wal-Mart at 5am on Black Friday you’ve never really seen America.
3. “. . . but I didn’t get rich by skimping on lattes.”
Well, duh. (See my clever discussion of lattes here.)
4. “I have a concierge for everything.”
Is this a joke? They are talking about a paid agent who will score you tickets and dinner reservations. I have never used such a service, have never considered it, and frankly wouldn’t know where to find it if I wanted it. As far as I know, nobody I know has ever used such a thing.
5. “You don’t get rich by being nice.”
This one doesn’t feel right to me, but it is so vague it is hard to mark it down as false. Certainly, guys like Warren Buffet made their fortunes by buying stock from some people for less than it was worth and then selling it to others for more than it was worth, and that is not very nice, is it? But in my experience, being a charming guy people don’t mind spending time with will get you pretty far in life. I, on the other hand, am unemployed.
6. “Taxes are for little people.”
The person who said this went to jail for tax evasion. In fact, much as they may resent what they pay, the little people account for just a small slice of federal income tax revenues. As SmartMoney concedes, 1% of taxpayers account for 40% of taxes, and the top 10% pay 70% of the total. Moreover, contrary to popular assumptions, this has been getting more skewed (i.e. progressive) over time. In 1980 the top 1% paid only 20% of taxes. (See interesting chart here.)
7. “I was a B student.”
True. I my GPA was only slightly above a B. But it was at Harvard. That’s brand equity on my resume that has been paying dividends for 20+ years. Where you went to college means less here than it does in just about any other developed nation, but it still counts for a lot. Maybe too much.
8. “Like my Ferrari? It’s a rental.”
Again, this one is so alien to me it sounds like a joke. I used to know one guy who had a Ferrari. He drove it very occasionally on perfect summer days, but mostly just enjoyed having it in the garage. Renting something like that might be a fun splurge, but it is probably a poor investment. Assets such as exotic cars, fine art, and high-end jewelry don’t depreciate much, so owning is relatively cheap.
9. “Turns out money can buy happiness.”
It hasn’t for me. Not yet, anyway. Perhaps I need just a little more of the stuff. Entirely too thoughtful discussion of this here.
10. “You worry about the Joneses — I worry about keeping up with the Trumps.”
The Trumps? Seriously? On what planet is Donald Trump an attractive role model for anything other than implausibly successful self-promotion?
Of course, there is truth to this in that no matter how successful you are, the grass is always greener on the lawn next door. That’s just human nature. And it folds back into the point made above in item #1. Being a middle aged millionaire in America feels common and ordinary because it is common and ordinary. Just being above average does not fill a person with a serene feeling of success. Until you get to the true wealth stratosphere of the billionaires, there will always be plenty of people around you who are more successful.
Final score: 3 true (2, 3, 7) 2 kinda true (1, 10) 2 dubious (5, 9) and 3 off-the-wall-wrong (4, 6, 8).
[Photo – William Helsen]