How many times have you heard that “90% of millionaires made money from real estate?” Real estate gurus make this statement often, and it has a certain appeal. It’s a catchy phrase that suggests the path to wealth is simple and accessible to anyone willing to invest in real estate. However, this statement is not entirely accurate. In this article we will delve into the data and reveal where real wealth is actually created.
Debunking the real estate myth
Understanding the millionaire population
To begin, let’s look at the number of millionaires in the United States. There are approximately 23 million millionaires, which represents approximately 6.7% of the total population. This is a significant number, but it is important to understand how these individuals accumulated their wealth.
Homeownership and wealth
One of the key arguments put forward by real estate gurus is that owning a home is a surefire way to become a millionaire. However, the data tells a different story. Only two-thirds of Americans own a home, and only 8.2% of those homes are worth more than $1 million.
Let’s consider a hypothetical scenario where these million-dollar homes are simply gifted to their owners, without any money changing hands. Even in this unlikely situation, only 5.3% of the population would own $1 million worth of real estate. This is a far cry from the 90% figure touted by real estate gurus.
Additionally, only 5% of Americans own more than one home. This fact further undermines the claim that real estate is the primary source of wealth for most millionaires.
The true source of wealth
So if real estate isn’t the primary source of wealth for 90% of millionaires, where does this wealth actually come from? The answer is simple: employment. Most millionaires accumulate wealth through their jobs, owning their own business, or working for someone else.
That’s not to say that real estate can’t be a valuable part of a diversified investment portfolio. However, it is essential to recognize that it is not the silver bullet that some believe it to be. Building wealth requires a combination of hard work, wise investments, and financial discipline.
Conclusion
The claim that 90% of millionaires make their money from real estate is a myth. While real estate can certainly contribute to wealth creation, it is not the primary source of wealth for most millionaires. Instead, most millionaires build their wealth through employment, either by owning their own business or working for someone else.
It is crucial to approach wealth creation with a realistic perspective. Hard work, smart investments and financial discipline are the real keys to becoming a millionaire. Don’t be influenced by catchy phrases or promises of easy wealth. Instead, focus on building a solid financial foundation and making wise investment decisions.
Frequent questions
Q. What is the real estate myth?
The real estate myth is the claim that “90% of millionaires have accumulated wealth through real estate.” Real estate gurus often tout it as a simple and accessible path to wealth. However, this statement is not entirely accurate.
Q. How many millionaires are there in the United States?
There are approximately 23 million millionaires in the United States, which represents approximately 6.7% of the total population.
Q. Is owning a house a surefire way to become a millionaire?
No, owning a house is not a surefire way to become a millionaire. Only two-thirds of Americans own a home, and only 8.2% of those homes are worth more than $1 million. Additionally, only 5% of Americans own more than one home.
Q. What is the main source of wealth for most millionaires?
The main source of wealth for most millionaires is employment. This could be through owning your own business or working for someone else. Real estate can be a valuable part of a diversified investment portfolio, but it is not the primary source of wealth for most millionaires.
Q. What are the real keys to becoming a millionaire?
The real keys to becoming a millionaire are hard work, wise investments and financial discipline. It is essential to build a solid financial foundation and make wise investment decisions rather than relying on catchy phrases or promises of easy riches.
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