Meet the Boring Young Millionaires
| August 19, 2008 | Posted by Roshawn Watson under Uncategorized |
Recently, Kiplinger Personal Finance Magazine profiled Rik Wehbring, a 37-year old millionaire living on $50,000 a year in San Francisco.
He simply states that “I do not need material possessions.” He made his money during the dot-com boom but unlike many of his peers (both younger and older), he decided to forgo materialism and irresponsible money habits.
He is part of a newly-named group: YAWN (Young And Wealthy but Normal).
Considering that most people become millionaires between 50 and 60, he is about 2 decades ahead of his time (at least from a net worth standpoint). Although the article failed to disclose exactly how much he is worth, it is most likely that he is part of a growing number of middle-class millionaires with a net worth approximately between 1 and 20 million.
Living Beneath Your Means
One of the most common characteristics of the wealthy is that they live far beneath their means. Okay, that may sound trite and obvious, but the reason it is so important is because other pundits claim that you merely need to increase your means. Most people focus on income so they can continue their conspicuous consumption-oriented lifestyle whereas most millionaires focus on net worth. The following statement accentuates this point. Did you know that…
On average, millionaires annual realized income is less than 7 percent of their wealth. Moreover, the average millionaire saves at least 20% of their earned income.
Out of The Spotlight
Do not allow financial headlines to be your sole sources of financial information. Looking at any financial news website and newspaper, you will see how bad the home prices are, how the economy is in a funk, and how job losses are abundant, etc.
Although all of these things are true, what often gets overlooked is that millionaires are increasing both in number and in wealth. The same financial principles that worked a decade ago are still working today. Although it is also true that perhaps using your primary residence for short-term wealth building may not be a good plan, over the long-term home-ownership makes sense. Over 97% of millionaires are home owners.
Moreover real estate investors are scooping up good deals all of the time because of overstretched mortgage holders. The media gravitates towards the extremes. For example, check out the following clip…
[youtube=http://www.youtube.com/watch?v=fDPBxN9Ez1o]
He is not the prototypical millionaire, and most millionaires cannot afford to spend like he does. At the end of the day, decide what’s most important to you: displaying a particular social status or realizing enormous wealth. Your decision with determine your financial legacy, so choose wisely.
Lastly, if you like this post, please click here to get my Brand New eBook FREE and Propel it, Stumble it, and tag it on Delicious.
Copyright 2008, Roshawn Watson, Pharm.D. All Rights Reserved.
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I love hearing stories like this because it means the average joe can become a millionaire.Slow and steady always wins the day. In other words anyone can become a millionaire if they live well beneath their means and save for long enough.
Thanks for the feedback. I am glad this article inspired you.Friendly Regards,Shawn
Part of this is simply that — because of decades of inflation — "millionaire" does not mean what it once did.The public's perception of a "millionaire" would now be more practically encompassed by the term "billionaire".We're not quite as bad off as Zimbabwe, where virtually overnight a million went from being a lot of money to the price of bicycle — and the following day to that of a can of soda pop — but we have done something similar over the past 40 years; just to a lesser exponential degree.Thus "millionaires" are pretty commonplace these days, many are your next door neighbors (or may the guy a couple miles away).
Cool, YAWN never heard of that! I guess I'm a YAWN then, I think. I remember first crossing the 1 million mark in my mid-to-late 20's, about one year after I did. I guess I was surprised, but not really. I have a 10.5 year old house, and dress very humbly. I don't want to attract any attention at all. It's really fun this way!
He cashed out in the dot com bubble, which perhaps sadly is not really possible anymore. And he spends $50,000 a year which is what the average family spends, yet he does not need material possessions. Then what is he spending all that money on?Anyway, either you need a substantial six figure salary ($200k+ in aftertax income) or you need to cash out in a bubble of some kind. This is not for the ordinary person.
@Financial Samurai Hey Sam, it is really cool that you indeed became a YAWN in your mid/late-twenties. Honestly, I think you are very atypical in the sense that most millionaires want to be known. There's a sense of "look at what I have accomplished." YAWNs are so incognito and not concerned with high profile for status sake, except to advance a cause perhaps. BTW, I love how you joined Budgets Are Sexy Millionaire's Club challenge.Side note, I typically have respect for those who have accumulated great sums of money. That's because millionaires have done what over 90% of the US population cannot or will not do. With over 2/3 of millionaires never increasing their wealth over $2.5 million, you are in very exclusive company. My hat's off to you.
@Early Retirement Extreme The interesting thing is there is always some bubble or another. If we are prepared, we can always capitalize on some opportunity. For example, in 2003-2004, Warren Buffet gave an interview and was asked if there was a housing bubble? He said, if there is not a bubble, "there is plenty of froth (small bubbles)." We all know what happened four years later. Now there are more opportunities than ever to get rich. Consider that John Paulson and David Tepper just made $4-7 billion in 2007-2009 personally by smart investing doing the economic downturn. As we all know, that's the nature of the capitalistic beast.I do agree that becoming "rich" is not easy because one of biggest limitations is lack of capital and lack of financial literacy (bigger handicap). However, most millionaires are not rich nor do miillionaires feel rich. According to Fidelity, we "need" between $9-20 million to "feel rich" in today's economy. I believe it is relatively "simple" to become a millionaire, especially a paper millionaire nowadays. Start young, aggressively invest, avoid debt, earn a decent income, etc. Using this path most people can retire millionaires if they desire, even on $50K/year. Don't you think?
Video helped in understanding the life of an Entrepreneur in better way and I would like to say thanks for sharing this article including this great video what really helped me to think something big today and work to get the dreams.
I don't know how I missed responding to this comment, but thank you so much! I really appreciate your feedback. I wish you all the success in the world achieving those big dreams!
Love these kind of stories! Not everyone needs a lot of stuff to thrive in their daily lives…
Bingo Kevin!
It is funny how we mature to realize that some of the most important things don't involved conspicuous displays of wealth. It's not about hating stuff. It's about not allowing stuff to own you.