What are typical self-made millionaires like? How does a millionaire mind think? How do they build their fortune, and what do they do with their money once they have it?
People today may think the way to build wealth has changed, that we live in a culture of the quick jackpot, even that to get rich you have to abandon your code, principles and values. Many people still think the rich have built their fortunes by cheating or defrauding others, because you still hear phrases like “nobody gets rich honestly.” But nothing could be further from the truth.
Today we’re going to look at and analyse how a self-made millionaire really thinks. In fact, there are more millionaires than you can see, but as the book The Millionaire Next Door explained, the truly rich may be more discreet than those who try to imitate them. Let’s look at how a real millionaire thinks and what they are like.
10 traits of self-made millionaires
1. They are survivors
Many self-made millionaires never graduated from university. A share of them may have degrees, but the vast majority graduated from life’s school of survival. Although there is a false belief that the rich come from rich families, or that their wealth is inherited, the truth is that most of them come from very modest beginnings, even from families with financial hardship. Those modest beginnings are what lead them to apply that philosophy to their businesses.
When someone has been through hard times, they know that their financial survival requires total control of their finances and total control of their business, a frugal lifestyle and a debt-free position.
2. Self-made millionaires are independent
This quality is what drives them in their pursuit of money. Although they are aware that business success requires building synergies with other people, they know that, first and foremost, success starts with themselves, with what they do and the decisions they make. Money doesn’t rule them, but they are nonconformists who work to build their own businesses and avoid situations and complications that could spoil their independence. That brings us to the next point.
3. A millionaire’s mind is self-employed
Because they are so independent, these are people who realised early on that they didn’t fit in as employees of a company. In fact, most of them would struggle to survive mentally in the corporate world unless they were the ones running the company.
In fact, people sometimes wonder whether serial entrepreneurs might be a matter of genetics, because many of them, for no apparent reason, simply seem out of place from a very young age when they work for someone else. On the other hand, they feel happy and complete when they are taking a risk to create their own company.
Once they have set up their first business, whether it succeeds or fails, they will rarely go back to working for someone else.
4. Self-made rich people have principles and values
There will always be exceptions, of course, but as a general rule legitimate millionaires are nicer, and even better people, than those who aspire to imitate them. This is where belief systems come into play. If you believe millionaires made their fortunes by setting honesty and principles aside, you’ll look for a way to get rich illicitly.
The real self-made millionaire stands out for their humility. Add to that, as we said in an earlier point, the fact that they are survivors, and don’t think that just because they have no university degree you’ll be able to fool them easily: having graduated from life’s toughest school, they’ll spot a charlatan or a fraudster a mile away.
5. They are not big gamblers
Although people always say that millionaires got there by taking big risks, part of the self-made millionaire’s success actually lies in keeping risks under control. In fact, the holy grail for these people is to take on as little debt as possible and to have a business that is as debt-free as it can be.
They know that the moment they take on significant business debt, it puts them in an undesirable position with the banks. All that said, self-made millionaires put all their effort into paying off the debts they took on early in life. Even if they have no university degree, they know more than the average person about the fundamentals of personal finance.
6. They are savers
When you come from poverty and hardship and build a business little by little, the importance of a frugal, conservative lifestyle tends to stay engraved in your mind. And they apply this to their businesses too. As far as possible, they try to save as their business grows, so that when the time comes to expand, they can do it, ideally with cash, and avoid growing by taking on debt risk.
And let me clarify here: taking on debt with the aim of earning a return on the investment by expanding a business would fall within what we consider good debt. But the fact that debt is good doesn’t mean that expanding the business without debt isn’t much better. That kind of growth is healthier and more organic. In fact, that is how great business empires have been built.
7. They get rich with simple businesses
Most people try to get rich by looking for innovative businesses; others do it by looking for complex ones. Reality shows that many of the great self-made millionaires got there with businesses that are very simple to explain.
What businesses did self-made millionaires go into?
While it’s true that most wealth goes through real estate and the stock market, it’s even more true that these more discreet millionaires have businesses as basic as hardware stores, selling cardboard boxes, hospitality, nightlife, franchises, building materials, food supply, and so on.
I also want to break down some false beliefs that have been planted in people’s minds by authors like Robert Kiyosaki, such as the idea that self-employed people are not business owners and are slaves on the wrong side of the quadrant.
Many self-made millionaires are architects, lawyers and so on. Sometimes they work for themselves as self-employed professionals, and at other times they decide to grow and open their own firms, such as an architecture studio or a law firm.
In any case, you don’t have to be the owner of Mercadona (Spain’s largest supermarket chain) to be a millionaire. Mercadona’s lawyers, the architect who plans the opening of its stores, Mercadona’s suppliers and whoever provides it with a specific service can be millionaires too.
One thing that hasn’t changed is the culture of the self-made millionaire. Even in the dot-com era, when it seems some entrepreneurs in the tech industry have hit a quick jackpot, we can see two types of mindset:
- The one who creates a temporary business, gets rich fast and kills the business.
- The one who creates a solid, lasting company.
This is why the right mindset in business and towards money makes a self-made millionaire’s fortune last over time and across several generations, while the fortunes of stock market wizards, artists and athletes tend to end up at risk in the long run.
8. The self-made millionaire is discreet
Real self-made millionaires are a far cry from what people see on social media today. They don’t attract much attention or stand out much in a crowd. They dress well and look good in their business-casual suits.
Armani suits, Gucci belts and gold watches are for people trying to prove something. When you have a bank account with several million dollars in it, you don’t need to prove anything to anyone.
In fact, there’s something few people know. The new clothing and accessory lines from brands supposedly aimed at people with lots of money, the ones you can recognise from hundreds of metres away because the brand name is bigger than the garment or accessory itself, are not designed for millionaires or successful people. Quite the opposite. They are designed for the middle class and the poor who are trying to look rich.
See also: Are you living beyond your means? 5 signs that you are
Brands exploit this supposed exclusivity to sell a 1,500-euro Gucci belt with the logo clearly visible, not so that a millionaire will buy it, but so that someone who wants to look rich will.
9. They don’t talk much about how much they have
As we have explained before when discussing how to spot a fake rich person, real millionaires are very protective of their money and their privacy. That’s why they will rarely boast about how much money they have or about their luxuries, which, in any case, most of the time they don’t own, because they prefer to keep their money invested and tied up in their business or assets.
Self-made millionaires enjoy investing much more than spending. And this is another thing the middle class hasn’t understood about the rich: the poor believe they need to spend more money to be happier. The truly rich are happy even without spending much money.
10. They are very patient
The smartest wealth is patient wealth, and this is what most people looking to get rich quickly find hardest to understand.
The best investors of all time have proven to be those who based their investing on the simplest, long-term strategy. Meanwhile, thousands of dreamers buy magic methods to get rich in the market.
As we said in one of the earlier points, self-made millionaires are not gamblers. That’s why they prefer to invest in stocks (ideally dividend-paying ones), bonds, treasury securities and real estate. These long-term investments have been shown to generate levels of wealth that no snake-oil salesman will ever achieve with his magic speculative formulas.
They bring this patience to their businesses. They prefer to be patient and grow organically rather than speculate on ideas that would expose them to uncontrolled risks. And let’s not twist things here: every decision involves risk. The only difference is that some risks are within the plan and others are outside it.
Finally, if there’s one thing self-made millionaires are clear about, and that everyone else finds a little harder to understand, it’s that everything starts with hard work, effort, sacrifice and putting off immediate pleasures in exchange for future rewards. But above all, it’s about doing something whose purpose goes beyond money, because otherwise it would be a boring purpose.
And something even clearer for the champions of the quick-jackpot culture: smart wealth built from patience lasts longer, because wealth that comes quickly, by its very nature and mindset, goes the same way it came.
Featured image: Alec Williams, CC BY 2.0, via Flickr.
