Written By: The American Academy of Estate Planning Attorneys
John Steinbeck once said, “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”
One of the great things about the U.S. is that anyone really can become a millionaire, or at least amass a significant amount of money and assets over the course of their life. The Los Angeles Times reported that there were more millionaires in the U.S. in 2013 than at any time in past history. Today, most U.S. millionaires and even billionaires are self-made. Tomorrow, you may become one of them – if you aren’t already.
In 2013, there were 9.63 million households in the U.S with a net worth of $1 million or more, excluding their homes. This beat the previous record of 9.2 million millionaires that was set in 2007 before the global financial crisis sent the number of millionaires tumbling to 6.7 in 2008.
Some other wealth records were broken recently, as well. For example, a record high of 132,000 households had a net worth of $25 million or more, which surpasses the prior record of 125,000 super-rich households in 2007. The number of families with a net worth exceeding $100,000 also climbed to 38.6 million in 2013.
While a few of these prosperous families inherited their money, most made their own fortunes through good old-fashioned hard work. This includes not just millionaires, but even billionaires. In 1984, a fourth of the people on the Forbes 400 list of the wealthiest people had inherited their fortunes, but in 2014, only 7% were living on family fortunes they’d done nothing to grow. A total of 8.5% of the billionaires on the Forbes 400 list in 2014 had inherited nothing at all and had made billions completely on their own.
Looking at the Forbes 400 list (with names like Bill Gates, Warren Buffett, and the Walton family), it’s easy to imagine you have to be a computer programmer, retail mogul, or superstar investor to get really rich in the U.S.; however, this simply isn’t true! Just look at the inventor of the pet rock, who made $15 million in the first six months his product was on the market; the inventor of the Snuggie who made more than $200 million; the inventor of beanie babies whose fortune is in the billions; or the owner of the Internet site I Can Has Cheezburger who sold his feline-friendly site for $2 million.
Since monetizing cat pictures and marketing cute stuffed animals has already been done, you can also make millions by simply saving your money. The authors of The Millionaire Next Door say that most millionaires save more than 15% of income they earn. The authors also provide a simple formula to determine if you are on track for riches. If you multiply your household income by your age in years and divide by 10, this should give you your net worth. If your net worth is greater than this number, you’re considered a “wealth accumulator” and are probably going to retire rich.
Of course, once you have accrued money through a lifetime of hard work (or through creating the next kookie cat Internet meme), make sure you protect what you have built and grown. This means talking to an experienced estate planning attorney about how to leave assets for your loved ones in a way that avoids family fights or creditor claims of beneficiaries. No matter how much you are worth, planning ahead for the future is the greatest gift you can give your family (although a Snuggie may be a close second choice!). Talk to an estate planning attorney today to start the process of protecting your legacy.
