What comes to your mind when you imagine a rich American? Many people imagine the rich as people who live in magnificent mansions, drive exotic sports cars and luxury sedans, and show their “black cards” when paying for things.
Nothing could be further from the truth. From the outside, a typical millionaire doesn’t actually act like a millionaire. Let’s look at three lies about the rich that you should stop believing.
1. Millionaires own mansions
It should come as no surprise that most millionaires own the house they live in. In fact, 90% have a primary residence, and in many cases, the equity they have built in their home is a big reason why. From where they are millionaires.
But don’t think that the typical millionaire’s home looks like the mansions probably associated with wealthy people on television. According to Ramsey Solutions’ National Millionaire Survey, 6 in 10 people live in homes worth less than $500,000.
There’s a good reason for this. Contrary to what your real estate agent may have told you, your primary home is not an investment. This is definitely an asset, and for many people, owning a home may be preferable to renting. But over time, it’s unlikely to generate returns like the stock market or rental properties.
2. Millionaires buy expensive cars
When you hear the words “millionaire” and “car” you probably think of brands like BMW or Cadillac. So you might be surprised to learn that you’re more likely to find millionaires driving Toyotas and Fords than either of them. The most popular vehicle among high-income households in the United States is the Ford F-150.
Simply put, vehicles are depreciable assets. And millionaires tend to get (and stay) rich by focusing their financial resources on assets that are likely to increase in value over time. That’s why more than 85% of people who drive luxury car brands are not actually millionaires.
3. Millionaires carry their balances on fancy credit cards
There are plenty of high-end credit card products marketed to wealthy Americans, and others designed simply to please the cardholder. To look rich. The Centurion Card from American Express is the most prominent example, as the “black card” is well known to be used by celebrities and the ultra-rich.
But you might be surprised at how hostile millionaires are to debt, especially when it comes to credit cards. Overall, 56% of active U.S. credit card accounts have a balance. But almost three-quarters of millionaires Never He was carrying a credit card balance.
Credit cards can definitely be a valuable financial tool, allowing you to build your credit score, earn rewards, and gain financial flexibility. But only if you’re paying off the full balance each month and not paying 20% or more in interest.
Key takeaways
Some of the most common myths about how the rich relate to their lives spending money. On the other hand, the way to become a millionaire or multi-millionaire is to save money, not spend it. These three facts about millionaires show us that.
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