'Made, not born': Dave Ramsey says 79% of US millionaires didn't get an inheritance from their parents or family members — here's how they really made the big money (2024)

FAQs

Are 79% of millionaires inherited? ›

When Ramsey's National Study of Millionaires asked where the riches came from, they found that a whopping 79% didn't receive any inheritance from parents or other family members. Not one cent. Unpaid bills perhaps (though the study didn't ask).

Only 3% of millionaires inherited a million dollars or more. 3 PERCENT! Most wealthy people didn't inherit their wealth, they made it... and YOU can too. They're always mad.

The U.S. inherited wealth share has declined from 51.2% in 1992 to 41.4% in 2016.

Millionaires Are Made, Not Born

In fact, the majority of millionaires didn't even grow up around a lot of money. According to the survey, 8 out of 10 millionaires come from families at or below middle-income level. Only 2% of millionaires surveyed said they came from an upper-income family.

Further, a second study by Fidelity Investments found that 88% of all millionaires are self-made, meaning they did not inherit their wealth. The Fidelity study also revealed that self-made millionaires' top sources of assets were investments/capital appreciation, compensation and employee stock options/profit sharing.

Recent studies have shown that the notion that most millionaires are born into wealth is a myth. In fact, over two-thirds of millionaires are self-made, according to a 2019 study by Wealth-X and a study by Fidelity Investments.

“90% of all millionaires become so through owning real estate.” This famous quote from Andrew Carnegie, one of the wealthiest entrepreneurs of all time, is just as relevant today as it was more than a century ago. Some of the most successful entrepreneurs in the world have built their wealth through real estate.

According to a survey conducted by the Federal Reserve, between 2016 and 2019, the average inheritance received in the U.S. was $46,200. The average for the wealthiest 1% of individuals surveyed was $719,000, while the average for the bottom 50% was only $9,700.

How Many Millionaires Inherited Their Wealth? 21% of millionaires received some inheritance, but only 3% received an inheritance of $1 million or above. 79% of millionaires did not receive any inheritance from their family or relatives.

Over 49 million U.S. households expected to leave an inheritance in 2022 compared to 34.4 million recorded in 2015.

Do millionaires pay off debt or invest? ›

They stay away from debt.

Car payments, student loans, same-as-cash financing plans—these just aren't part of their vocabulary. That's why they win with money. They don't owe anything to the bank, so every dollar they earn stays with them to spend, save and give!

In broader terms, the finance and investment profession has the most millionaires. It also has the most billionaires, with 371. Here's a list of the seven best careers if you want to be a millionaire.

88% of surveyed millionaires graduated from college.

In contrast, 33% of the general U.S. adult population has graduated from college.

It found that 88% of millionaires graduated from college, compared to 38% of the general population. In addition, 52% of millionaires had a master's or doctoral degree, compared to 13% of the general population.

Researchers have found a correlation between risk-taking and being the last-born sibling.

According to data from Forbes, the United States has the highest number of billionaires in the world with a total of 724 billionaires. This is followed by China with 698 billionaires and India with 237 billionaires. Germany and Russia complete the top five countries with 136 and 117 billionaires respectively.

High net worth investors typically keep millions of dollars or even tens of millions in cash in their bank accounts to cover bills and unexpected expenses. Their balances are often way above the $250,000 FDIC insured limit.

The Hurun Global Rich List 2023 showed that 70% of the billionaires are self-made and only 30% are legacy. Some of the self-made billionaires include Jeff Bezos, Mark Zuckerberg, Gautam Adani and others. As many as 247 self-made women made it to the list this year, down by 22 from last year.

On average, Gen X billionaires are worth $4.46 billion, which is actually the lowest net worth of any generation. However, 80.7% of them are self-made, with very little wealth being inherited. This makes them the biggest generation of self-starters.

Do millionaires pay off their house? ›

Most have paid off their mortgages. In 2020, 58% of the state's equity millionaires owned their homes free and clear. Statewide, there has been a dramatic rise in the number of Californians who have paid off their mortgages, from 1.6 million households in 2000 to 2.4 million in 2020.

The world's richest people owned on average about four homes in 2022.

According to a 2022 study by Experian Automotive, a lot of wealthy folks simply don't drive fancy cars. The study found that for people with household income of more than $250,000, 61% don't drive luxury brands. They drive Toyotas, Fords and Hondas like the rest of us. Other studies show similar results.

You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth. That's how financial advisors typically view wealth.

Many estate planning attorneys recommend distributing the assets in chunks (typically one-third at age 25, one-third at age 30 and one-third at age 35). The thinking is that with maturity will come better financial decision-making. An inheritance advance can provide financial relief if you expect to inherit money.

We find that inheritance size is highly correlated with income, particularly at the top end of the income distribution; the bulk of inheritances are received between the ages of 46 and 75; and that most inheritances come from parents.

Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.

In fact, statistically, around 10% of retirees have $1 million or more in savings.

by state U.S. 2020. In 2020, California had the highest number of millionaire households in the U.S., with 1.14 million households having one million or more in investible assets.

Expectations for an inheritance's size have to be realistic. The Federal Reserve's 2019 Survey of Consumer Finances (SCF) found that the average inheritance in the U.S. is $110,050.

How much can you inherit in the US tax free? ›

The six U.S. states with inheritance taxes provide varying exemptions based on the size of the inheritance and the familial relationship of the heir to the deceased. The federal estate tax exemption shields $12.06 million from tax as of 2022 (rising to $12.92 million in 2023). 3 There's no income tax on inheritances.

If one of your children passes away before you, their children (your grandchildren) could inherit their parent's portion of your estate. Typically, your parents and siblings are next in the order of inheritance, followed by your aunts, uncles, nieces, nephews, and cousins.

A net-worth millionaire is someone who has a net worth of at least $1,000,000. Net worth is a fancy way to say 'what you own minus what you owe. ' If that amount ends up being $1,000,000+, you're a net-worth millionaire."

What is an ultra-high-net-worth individual (UHNWI)? These are people with investable assets of more than $30 million, according to the 2021 Knight Frank Wealth Report. 14 By comparison, high-net-worth individuals (HNWIs) have at least $1 million in assets. This group of people is small but continues to grow.

What is 'good debt'? Borrowing to invest in a small business, education, or real estate is generally considered “good debt,” because you are investing the money you borrow in an asset that will improve your overall financial picture.

Indeed, married people are happier than unmarried people: across nearly five decades of surveys, data from the GSS shows that 36% of people who have ever been married (including divorced, separated, and widowed people) say they are “very happy” while just 11% are “not too happy,” compared to 22% and 15% for people who ...

Are Wealthy Couples More Likely to Divorce? Wealthy couples have higher odds of divorce because more money translates to more stress in a committed relationship.

Of the 3,311 billionaires in the world in 2021, only 12.9 percent were women, meaning that there were 430 billionaires worldwide. Whereas male billionaires tend to be self-made, 45 percent of the female billionaires in 2020 had inherited their fortune.

Approximately 70% of wealthy families lose their wealth by the next generation, with 90% losing it the generation after that. When it comes to building wealth, growing your net worth is half the battle.

21%. That's right. Millionaires and the general population receive inheritances at the exact same rate.

What percentage of the population owns 86% of the wealth? ›

Extreme Wealth Reflects and Perpetuates Racial Inequality

White, non-Hispanic families own 86 percent of the total wealth in the United States, while Black, non-Hispanic families own just 3 percent, our analysis of data from the SCF indicates.

76% of millionaires in the U.S. are white, and white people account for 60% of the total U.S. population. There are about 62.5 million millionaires globally, a 11.4% increase from 2020.

You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth. That's how financial advisors typically view wealth.

The highest average American net worth belongs to those in the age group of 55 to 64 at $1,175,900. Americans 65 to 74 years old have the second highest average net worth at $1,217,700 . The oldest age group of 75 and older have an average net worth of $977,600. Those under 35 have the lowest net worth at $76,300.

The average net worth of Americans aged 65 to 74 hovers around $1.2 million. The median net worth is lower, at $164,000. The typical 70-year-old has around $105,000 in debt, including mortgages, home equity loans, credit cards and student loans, as measured by the Fed's data.

Baby boomers have the highest household net worth of any US generation. Defined by the Federal Reserve as being born between 1946 and 1964 (currently in the ages between 59 and 77), baby boomers are in often in the sunset of their career or early into retirement.

African Americans, who in many categories have the greatest gender economic equality, have the greatest gender wealth disparity though still having little wealth compared to Whites. Single Black men's median wealth was $10,100, compared to Single Black women's median wealth of $1,700.

The pyramid shows that: half of the world's net wealth belongs to the top 1%, top 10% of adults hold 85%, while the bottom 90% hold the remaining 15% of the world's total wealth, top 30% of adults hold 97% of the total wealth.