How Did Millionaires Get Rich? Not How You Think

Summary

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Podcast Summary

Podcast: WSJ Your Money Briefing
Episode: How Did Millionaires Get Rich? Not How You Think
Date: April 15, 2019
Host: J.R. Whalen (The Wall Street Journal)
Guest: Chris Hogan (Author, "Everyday Millionaires")

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Episode Overview

This episode explores the realities behind how millionaires in America actually build their wealth, debunking widespread myths. Host J.R. Whalen interviews financial expert Chris Hogan, who conducted a major study of more than 10,000 net worth millionaires for his book “Everyday Millionaires.” The discussion focuses on what most people get wrong about the path to wealth—including misconceptions related to income, inheritance, education, and investing behavior—and offers practical insights that ordinary people can use to build lasting financial success.

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Key Discussion Points & Insights

1. Common Myths About Millionaires

• Myth 1: Millionaires have high-paying jobs

  • Most people believe you need to earn an extremely high income to become a millionaire.
  • Chris Hogan: “A third of the millionaires never had a six-figure household income in a single working year.” (03:23)
    • Many millionaires are ordinary people with regular jobs who have been financially consistent over time.

• Myth 2: Millionaires inherit their wealth

  • The majority of millionaires are not recipients of large inheritances.
  • Chris Hogan: “Seventy-nine percent of the millionaires that we talked to didn’t inherit one dime.” (04:31)
    • Many grew up facing financial challenges and built wealth from the ground up.

• Myth 3: Millionaires attended elite schools

  • Prestigious education is not a prerequisite for wealth.
  • Chris Hogan: “Seventy-nine percent did not attend some prestigious private school… 62% graduated from a public state school, 8% attended community college, and 9% never even graduated college at all.” (04:59)

2. The Real Keys to Becoming a Millionaire

• Beliefs, Knowledge, Actions

  • The foundation for wealth-building centers on three areas:
    • Belief: Do you believe you can become wealthy, whichever your background?
    • Knowledge: Do you understand key principles, such as budgeting, debt elimination, and investing?
    • Actions: Are you implementing what you know, developing strong financial habits?

• Chris Hogan:

  • “It’s your beliefs, and it’s your knowledge, and it’s your actions.” (05:30)
  • “When you get out of debt, you give yourself a raise.” (05:48)
  • “Building an emergency fund… and most importantly, investing money. Time and compound interest are what helps grow money.” (06:00)

3. The Importance of Intentionality

• Be intentional with your money
  • Take charge of your finances, regardless of current income.
  • Chris Hogan: “You happen to your money, not your money happening to you.” (06:23)
    • Good habits established with small amounts of money scale up as income rises.

4. Role of Retirement Plans

• Employer-Sponsored Retirement Plans as a Wealth Builder

  • 79% of millionaires attributed their first million in some part to using employer-sponsored retirement plans like 401(k)s and IRAs.
  • Consistency, not a high salary, is what matters: “It was amazing to see that 79% of the millionaires that we talked to said that their employer sponsored retirement plans… were the number one thing that helped them to reach millionaire status.” (07:12)

• Top Professions of Millionaires

  • Engineers, accountants, and notably, school teachers (the third most common profession among millionaires).
  • “Teachers… are able to do it because it’s not about a large income. It’s about understanding how money works but being consistent over time.” (07:46)

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Notable Quotes & Memorable Moments

• On education and legacy:

  • “Seventy-nine percent of the millionaires that we talked to didn’t inherit one dime… These were people that built wealth over time.”
    – Chris Hogan (04:31)

• On education background:

  • “Sixty-two percent graduated from a public state school, 8% attended community college, and 9% never even graduated college at all.”
    – Chris Hogan (04:59)

• On building wealth:

  • “It boils down to your habits with money… Do you understand about these key components that help you get to millionaire status?”
    – Chris Hogan (05:28)

• On the power of consistency:

  • “Teachers… this is a profession that’s underpaid and undervalued… Because it’s not about a large income. It’s about understanding how money works but being consistent over time.”
    – Chris Hogan (07:46)

• On the broader purpose of wealth:

  • “Put ourselves in a position to be able to build wealth so we can take care of our families, but also do the best thing you could ever do with money. And that’s give.”
    – Chris Hogan (08:12)

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Timestamps for Important Segments

• [02:31] Introduction to myths about millionaires and guest Chris Hogan
• [03:07] Myth-busting: Millionaires and high incomes
• [04:15] Inheritance myth exposed
• [04:48] Debunking the myth of elite education and careers
• [05:25] The real path: beliefs, knowledge, and actions
• [06:23] The importance of intentionally managing money
• [07:09] Employer retirement plans as the top wealth-building tool
• [07:37] Surprising top professions among millionaires, including teachers
• [08:12] The ultimate goal for wealth: giving

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Summary

This episode challenges popular stereotypes about how millionaires are made, revealing that most American millionaires are self-made, did not earn enormous salaries, did not inherit wealth, and attended ordinary schools. According to Chris Hogan’s research, what sets these millionaires apart is consistent, intentional financial behavior—living within their means, maximizing retirement accounts, controlling debt, and making wise, long-term investment decisions. The key takeaway: almost anyone can apply these principles and chart their way to financial security and abundance.

Transcript

[A]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. [e-mail] Washingtonwise. With your Money briefing. I'm Charlie Turner in New York for the Wall Street Journal. In a moment, we'll learn some things about millionaires, specifically how they got rich. And there are a lot of myths floating around about exactly how millionaires amass their wealth. First, here are some money headlines. Walt Disney's stock soared more than 11% Friday, one day after the company said that its Disney plus streaming service will launch in the US on November 12 for $6.99 a month, half the price of Netflix, the current streaming champ. It will offer programming from Disney's biggest franchises like Star wars and Marvel Studios, in addition to new original programming. Within its first year, consumers will have 25 episodic series to choose from, some of which will come from Disney's new Fox assets like the Simpsons. They will also have original content to binge nine original pieces launching in November. Investors cheered the unveiling of Disney, but the Wall Street Journal's Heard on the street says while Disney is pulling its content from its rival platform Netflix, it remains to be seen whether Disney will pose a serious threat to Netflix. True, it's undercutting Netflix with its pricing, but that may mean that Disney is more additive for consumers, not a substitute for Netflix, at least for now. Then there's Uber, which made its IPO filing public last week. Heard on the street says Uber could benefit by taking a more cautious approach to its valuation after the more aggressive tack taken by its ride hailing rival Lyft. Shares of Lyft fell in the days following its strong trading debut, but both Lyft and Uber have never made a profit, and that trend is likely to continue for Uber for quite some time. A key reason is that Uber faces tough competition, although Uber said it remains the ride sharing leader in all countries in which it owns operations. It also said its ride sharing market position declined in a substantial majority of markets last year, particularly in the US And Canada, where Lyft operates. Uber has also been investing heavily in its food delivery business, another brutally competitive market. Still ahead, J.R. whalen talks with author Chris Hogan about millionaires and some myths about how they got rich.

[B]

Wouldn't it be great to be a millionaire? Well, since most of us are not going to win the Powerball lottery, we may as well get to know what makes millionaires tick and how they achieved their millionaire status. Well, guess what? Most of what we think about how millionaires made their money is wrong. Financial expert Chris Hogan conducted a study of more than 10,000 net worth millionaires for his new book, Everyday Millionaires. And he's on the line with us with some details. So Chris, let's start with common myths about millionaires. One in your book jump right out at me and that is that most wealthy people do not have high paying jobs.

[C]

Yeah, that's so true. I mean, in reality, as you look at this, I think the whole concept of millionaires has been misunderstood in our society today. A lot of people think that you have to make a million dollars a year or, you know, you have to do, have to go to a certain fancy school. And the reality is that it's neither of those. The myth that wealthy people have high paying jobs is just not true. We talked and did this research, as you said, to over 10,000 and we found a third of the millionaires never had a six figure household income in a single working year. And so that means that there were two people working between the two of them. They didn't make six figures in a single working year. So the reality is the average millionaire doesn't have a high paying job. It's a regular man or woman that's working a regular job. But they've been consistent over time and

[B]

being consistent and being smart with their money. And that lesson could apply to any of us.

[C]

It sure can. And I think that's really the message that I'm really wanting people to get from this book is to understand, you know, these are regular people that have done this so you can do it as well. It just requires us taking some steps and having some new understanding of exactly what it takes to become a millionaire.

[B]

That's a common theme among many of the stories about some millionaires in your book. And that is in many cases they didn't inherit their money and in fact they grew up enduring financial struggles.

[C]

That's right. And that's another myth that people believe that, well, if someone is a millionaire, they were handed this from someone, they were in the lucky DNA lottery and it just worked out for them. The reality is 79% of the millionaires that we talk to didn't inherit one dimensional. That means they did not have a family member give them a large amount of money. These were people that built wealth over time.

[B]

And there's another myth that really jumped out at me and that is that wealthy people have a leg up on education and Careers. And that's not the case.

[C]

No, it really isn't. I mean, looking at this, especially the whole school thing, the whole process and thought around education, people think you have to go to an Ivy League school in order to become a millionaire. And in reality, you know, 79% of the millionaires that we talked to did not attend some prestigious private school. A matter of fact, 62% of them graduated from a public state school, 8% attended community college, and 9% of them never even graduated college at all.

[B]

So it has a lot to do with what you do with the education.

[C]

That's exactly right. It's what you do with the education, but how you go about it. But also, more importantly, it boils down to your habits with money. How do you relate with it? How do you look at it? And do you understand? I think there are three key areas for people to really kind of assess where they are. It's your beliefs, and it's your knowledge and it's your actions. Do you believe that you can become a millionaire? That it's not about where you were born or the zip code or the type of family you were born into? It's a matter of us understanding we can do this and believing in yourself, but growing in your knowledge. Do you understand about these key components that help you get to millionaire status? That's budgeting, being in control of your money, attacking debt, and understanding that when you get out of debt, you give yourself a raise, building an emergency fund, you have a cushion between you and life happening. And most importantly, investing money. Time and compound interest are what helps grow money.

[B]

And that's really related to a lesson in the book here. And that is, as you say, be intentional with your money.

[C]

Yeah, being intentional with your money. What I mean by that is that you happen to your money, not your money happening to you. I used to believe this misconception years ago that I could only build wealth if I had a large income. And that's not true. And oftentimes people will say, well, I'll wait and get more serious about my income once I make more money. And in reality, what we have to do is choose to start right where we are to make a decision to control the 30, 40, 50,000, or whatever it is you make right now, because that reinforces the habits that you'll need. So when your income grows, you actually can grow wealth as well.

[B]

There's another really interesting note in your book, and that is a clear majority of millionaires that you studied achieved their millionaire status in part through their employee sponsored retirement plan and being smart about it.

[C]

Yeah, this was key. I mean, you know, it was amazing to see that 79% of the millionaires that we talked to said that their employer sponsored retirement plans. 401ks, 403s, Roth IRAs. And IRAs were the number one thing that helped them to reach millionaire status. Which simply tells me that it's a matter of allowing compound interest to work for you by being intentional but putting money in over time. Another big key fact, people think that you have to have some fancy job in order to become a millionaire. And in our study, the top three positions of the millionaires were engineers, accountants, but number three were school teachers. Teachers. This is a profession that's underpaid and undervalued in my opinion. But how are they able to do it? Because it's not about a large income. It's about understanding how money works but being consistent over time.

[B]

How about that? So teachers are the smartest ones in the room. How about that?

[C]

Well, they have potential and I love it because teachers love knowledge and they want to grow. And so I think we all have the capacity to make decisions for ourselves and put ourselves in a position to be able to build wealth so we can take care of our families, but also do the most the best thing you could ever do with money. And that's give.

[B]

All right, that's Chris Hogan. He is author of Everyday Millionaires and Good Enough to come on our show. Chris, thanks for coming on the line.

[C]

Thank you so much for having me. Have a great day.

[B]

And that's your money briefing. I'm JR Whalen in New York for the Wall Street Journal.

[A]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. [e-mail] WashingtonWise.