America’s fascination with the uber-rich has been fed by TV shows, movies, magazines. Now, a new book, Get Rich, Stay Rich, Pass It On, reveals the secret to building wealth — and suggests it’s not out of reach for a lot of everyday investors.
“So many perceptions are way off base — that wealthy people are glitzy, that most wealth is inherited. In fact, only 20 percent of mega-millionaires inherited their wealth,” notes Catherine S. McBreen, who wrote the book with George Walper Jr. “The reality is most earned it the old-fashioned way through hard work and smart decisions. This is something that should make you feel good. Wealth is within your grasp.”
McBreen, 46, should know.
She and Walper, owners of Spectrem Group in Chicago, have been tracking America’s millionaires and mega-millionaires (those with more than $5 million in assets, not including the house they live in) for more than a decade. Each year, the firm surveys more than 5,000 wealthy households, monitoring investment habits, asset allocation choices and the decision-making that goes into them. They interviewed some of America’s wealthiest families for the book.
“One of the biggest surprises was how friendly and open people are to sharing their stories,” says McBreen, an attorney. “And as we got deeper into the research, we began to see threads that were similar.”
Most mega-millionaires, their research shows, are highly educated, exhibit a strong work ethic and have a somewhat high risk tolerance. “They’re more likely to take chances,” she adds. “They will also tell you that they took a lot of chances that didn’t work out.”
They are also family-oriented, and they worry about the same things everyone does: Can they maintain their standard of living? What will their health issues be as they grow older? Most don’t fully retire. And they’re not glitzy. “This isn’t about private airplanes and yachts. They’re not ostentatious,” says McBreen. “Like most people, they like to travel and play golf.”
One of McBreen’s favorite anecdotes involves a man who inherited a dump truck, put a snow plow on it and, in the early 1970s, built up a lot of contracts to plow out shopping mall parking lots. Next, he began to invest in excavation equipment. One job was excavating land at the end of an airport runway. He bought some of the land for a few thousand dollars. The business grew and his sons became part of it. Ultimately, Wal-Mart paid $8 million for the land he had purchased years earlier for $5,000.
“This is a great example of someone taking what he knew — and working it to full advantage, building on it, finessing it,” she notes. “This is a story about an everyday person who made a lot of very smart decisions.”