If Ms. Lucy R. Given your age and income, how does your net worth match up? Where do you stand along the wealth continuum? If you are in the top quartile for wealth accumulation, you are a PAW, or prodigious accumulator of wealth.
If you are in the bottom quartile, you are a UAW, or under accumulator of wealth. We have developed another simple rule. To be well positioned in the PAW category, you should be worth twice the level of wealth expected.
In other words, Mr. If Mr. Contrasting the characteristics of PAWs and UAWs is one of the most revealing parts of the research we have conducted over the past twenty years. Miller "Bubba" Richards, age fifty, is the proprietor of a mobile-home dealership. But "Bubba" is a PAW. His counterpart is James H. Ford II. Ford, age fifty-one, is an attorney. What is Mr. Ford's actual net worth? His expected level of wealth? Ford, by our definition, is an under accumulator of wealth.
Ford spent seven years in college. How can he possibly have less wealth than a mobile-home dealer? In fact, Mr. Richards has nearly five times the net worth of Mr. In trying to answer the above question ask yourself two simpler questions:. Clearly, Mr. Ford, the attorney, must spend significantly more of his household's income to maintain and display his family's higher upper-middle-class lifestyle.
What make of motor vehicle is congruent with the status of an attorney? Foreign luxury, no doubt. Who needs to wear a different high-quality suit to work each day? Who needs to join one or more country clubs?
Who needs expensive Tiffany silverware and serving trays? UAWs tend to live above their means; they emphasize consumption. And they tend to de-emphasize many of the key factors that underlie wealth building. Most of America's millionaires are first-generation rich. How is it possible for people from modest backgrounds to become millionaires in one generation?
Why is it that so many people with similar socioeconomic backgrounds never accumulate even modest amounts of wealth? Most people who become millionaires have confidence in their own abilities.
They do not spend time worrying about whether or not their parents were wealthy. They do not believe that one must be born wealthy. Conversely, people of modest backgrounds who believe that only the wealthy produce millionaires are predetermined to remain non-affluent. Have you always thought that most millionaires are born with silver spoons in their mouths?
If so, consider the following facts that our research uncovered about American millionaires:. America continues to hold great prospects for those who wish to accumulate wealth in one generation. In fact, America has always been a land of opportunity for those who believe in the fluid nature of our nation's social system and economy. More than one hundred years ago the same was true. He reports that 84 percent "were nouveau riche, having reached the top without the benefit of inherited wealth.
Just before the American Revolution, most of this nation's wealth was held by landowners. More than half the land was owned by people who either were born in England or were born in America of English parents. Is more than half of this nation's wealth now of English origin?
One of the major myths concerning wealth in this country relates to ethnic origin. Too many people think that America's affluent population is composed predominantly of direct descendants of the Mayflower voyagers. Let's examine this assumption objectively. What if "country of origin" were the major factor in explaining variation in wealth? We would expect that more than half of America's millionaire population would be of English ancestry.
This is not the case see Table The results may surprise you. Those designating "English" as their ethnic origin accounted for People of English origin account for Thus, American millionaires of English origin are more prevalent than expected, given their numbers in the entire U.
In other words, this group has a millionaire concentration ratio of 2. And yet, what percentage of the English ancestry group in America is in the millionaire category? Would you expect the English group to rank first? In fact, it ranks fourth. According to our research, 7. Three other ancestry groups have significantly higher concentrations of millionaires. How can it be possible that the English ancestry group does not have the highest concentration of millionaire households?
After all, they were among the first Europeans to arrive in the New World. They were on the ground floor to take economic advantage in this land of opportunity. In Colonial America, more than two-thirds of households were headed by a self-employed person. In America, the achievements of the current generation are more a factor in explaining wealth accumulation than what has taken place in the past. Again, most American millionaires today about 80 percent are first-generation rich.
Typically, the fortunes built by these people will be completely dissipated by the second or third generation. The American economy is a fluid one. There are many people today who are on their way to becoming wealthy. And there are many others who are spending their way out of the affluent category. If the English ancestry group does not have the highest concentration of millionaire households, then which group does?
The Russian ancestry group ranks first, the Scottish ranks second, and the Hungarian ranks third. Although the Russian ancestry group accounts for only about 1. This is in sharp contrast to the English ancestry group, in which only 7. How much wealth does this Russian American millionaire group have in total? How can one explain the economic productivity of Russian Americans?
In general, most American millionaires are manager-owners of businesses. Russians in disproportionate numbers are manager-owners of businesses. Further, this entrepreneurial spirit seems to translate from one generation of Russians to the next. The Hungarian ancestry group also is entrepreneurially inclined. This group accounts for only 0. Yet it makes up 2 percent of the millionaire households.
Contrast this with the German ancestry group, which accounts for nearly one in five households Only The Scottish ancestry group makes up only 1.
But it accounts for 9. Thus, in terms of concentration, the Scottish ancestry group is more than five times 5. The Scottish ancestry group ranks second in terms of the percentage of its clan that are in the millionaire league.
Nearly twenty-one What explains the Scottish ancestry group's high ranking? It is true that many Scots were early immigrants to America. But this is not the major reason for their economic productivity. Remember that the English were among the earliest immigrants, yet their concentration numbers are far lower than those of the Scots. Also consider that the Scots did not enjoy the same solid economic status that the English enjoyed during the years the nation was in its infancy.
Given these facts, one would think that the English ancestry group would account for a higher concentration of millionaire households than those in the Scottish group. But just the opposite is the case.
Again, the Scottish ancestry group has a concentration level nearly three times that of the English group 5. What then makes the Scottish ancestry group unique?
If an ancestry group has a high concentration of millionaires, what would we expect the income characteristics of that group to be?
The expectation is that the group would have an equally high concentration of high-income producers. In fact, this correlation exists for all major ancestry groups but one: the Scottish. This group has a much higher number of high-net worth households than can be explained by the presence of high-income-producing households alone. High-income-producing Scottish-ancestry households account for less than 2 percent of all high-income households in America.
You'll find similar methodology in, e. Yes, there are so few billionaires they're all individually trackable on a daily basis. See our full methodology in the net worth average post. Net Worth. Please enter all required fields. Correct invalid entries. Don't Quit Your Day Job DQYDJ may be compensated by our partners if you make purchases through links. Not everyone's finances were negatively impacted by the global health and economic crisis.
Thanks to stimulus payments and reduced spending, some Americans actually increased their savings levels during the pandemic. Regardless of how your own net worth changed over the past year, it's likely worth taking the time to evaluate where you're at right now and starting to plan for the future, says Rob Williams, vice president of financial planning at Charles Schwab.
Those who create a written financial plan typically have more savings and financial stability, as well as less credit card debt and late loan payments, Scwab's survey found. Skip Navigation. VIDEO Here's how to use the budgeting strategy.
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