Think you got what it takes? The latest research published this year in Russ Alan Prince and Lewis Schiff’s The Middle-Class Millionaire makes compelling reading. They identified 8.4 million households with a net worth of between $1 -10 million. They predict that this number will double in the next 10 years.
In 2005 the top 10% of households in the USA earned 48.5% of the national income! What’s more remarkable is that this number was just 36% in 1982. As the middle class continues to weaken, Prince and Schiff have indentified four primary qualities that the middle class millionaires share.
1. They work hard.
Hope you weren’t expecting a quick fix. Do you work hard? Chances are you’ll say YES to this. But what do your numbers say? The average middle-class professional works 41 hours/week. However, the MCMs (middle-class millionaires) work an average of 70. The authors found a big disconnect between what middle class people said was important in this area and what they actually did. I assume desire is hidden in here somewhere.
MCMs value their careers very highly – much more so than their less affluent peers (83% compared to 43%). Some of this may well be because over 80% of the MCMs run their own business or are part of professional partnerships. Most of the others are corporate employees with incentivized or pay for performance compensation.
I’m sure you’re busy; everyone’s busy. Where do your hours go?
2. They network.
The Millionaire Next Door author, Thomas J Stanley, has been correlating net worth with the size of your network since the ‘90’s. The MCMs value knowing a lot of people and see it as “a natural means of getting what they want in life.” They have made networking a WAY OF LIFE. The good news therefore is it is a habit you can develop too. MCMs get asked for advice on many more things from buying goods to recommending other service professionals. They are thirty-five times more likely to be asked about networking groups than regular middle-class professionals!
More than 43% of the MCMs (compared to 16%) belonged to formal or informal networking groups. They are over 4 times as likely to bring in new members.
What are your networking habits? Do you need to start scheduling more of it – even online?
3. They persist and they have an empowering mindset about ‘failure’.
Doesn’t sound very original, I know, but so what? 77% of the MCMs had failed more than once in the same field and tried again. Only 14% of their middle-class peers said the same! They mostly gave up when something didn’t work the first time and tried something else. All those clichéd quotations about sticking at it are repeated for a good reason!
Learning from mistakes is deemed vital by the MCMs and “was mentioned more frequently as a key to success than having a good formal education, obtaining an ownership stake in your work, or even building rapport with people.”
Want an empowering mindset to ‘being rejected’? 51% of them said it was important to “accept failure as a sign that you’re doing your best.”
How often each week do you ‘fail’? If you’re not where you want to be, is it time to fail more? And is time to look at ‘failure’ differently?
4. They are driven to benefit financially from their work.
They truly value financial independence. AND they find ways to get in the flow of where money is going. Two thirds of the MCMs say that “obtaining an ownership stake” in their work is important to financial success compared to just 28% of the other sample. This also means that many of them were willing to do work that they were less than crazy about.
Do what you love, think like a champ - and the money WON’T come!
The biggest surprise for me in the whole book is that only 2% of the MCMs believe doing what you love is important to financial success compared to 54% of other middle-class professionals (most of whom are earning less than $80,000/year.)
Also amusing is that while 73% of middle-class respondents believed “thinking like a millionaire” is important to their financial success, only 2% of MCMS agreed!!! These two statistics, if truly accurate, make a mockery of some personal development ‘gurus’. (I am not suggesting such celebrities are lying; I am questioning whether they are being anecdotal about a large percentage of this 10%.)
What are you doing to get in the flow of where the money’s going these days?
Three other useful lessons from Middle-Class Millionaires.
1. They focus; they specialize; they target market.
They pick one money-making endeavor and work very hard at it, whereas other middle-class people hedge their bets and put eggs in multiple baskets.
In business some of the MCMs are not just dentists, they have an expertise in cosmetic dentistry. In financial services, they work almost exclusively with one demographic such as physicians or engineers. In real estate, they focus on one higher-end neighborhood.
2. They are more comfortable taking risks.
“Risk is a way of life for MCMs.” This means choosing projects with greater risk and greater reward. Interestingly this does NOT mean risking their own assets and capital. Most MCMS seek other investors so they survive to try again. Similarly, committing to a target market requires a leap of faith since you’re no longer diversifying who you work with.
3. They hire business coaches and professional advisors.
MCMs invest in themselves – mostly in the professional arena whereas most middle-class professionals see that as an unnecessary expense (even though top athletes and performing artists have been doing it for years). They hire business coaches and other service professionals to serve on their team. MCMs are focused and spend their time doing what they do best; they do not want to waste time on things beyond their competency. Also, they want to be financially independent and recognize that this involves improving their professional skills so they hire coaches. They also hire legal, financial and real estate advisors. They value their health very highly and often hire personal trainers.
Why coaches? They provide a structure for business owners (who have no boss) that helps them focus. As one high achiever says: “You can’t do it for yourself. There are too many distractions, too many people trying to hold you back or hold you down, whether they do it intentionally or not. The coach is the only one really in your corner. Everyone else has their own agenda.”
Is it time for you to consider honing your professional skills in a specific area? Or your health? If it’s more referrals you want, I might know someone! Action is the only thing.
Next week? Some thoughts on where to meet MCMS.
Don’t forget to share this with others who want to know!
