The American Dream Is Still Alive, and You Can Become a Millionairehttp://www.fool.com/investing/general/2014/02/02/the-american-dream-is-still-alive-and-you-can-beco.aspx Patrick Morris
February 2, 2014
It is widely proclaimed that in order to make money, you must first have money, but evidence shows that's not actually the case.
PNC (NYSE: PNC) recently released its Wealth and Values Survey, in which it solicited the opinions of almost 1,000 high-net-worth individuals on what they believed were the biggest contributing factors to their financial success and well-being. And their answers may surprise you.
The actions of the rich and famous
Just last week, a report funded by the National Science Foundation done by economists at Harvard and UC-Berkley noted that while the chance of moving up the proverbial income ladder has remained relatively stable over the last few decades, it is still "lower in the U.S. than in most developed countries," especially in some parts of the country like the South and the Rustbelt.
When the wealthy individuals were asked what "actions most contributed to personal financial success," only 12% cited "receiving an inheritance," and only 3% noted "marrying someone with money."
In fact, it wasn't until the fourth action that money earned is even cited, as only 26% of respondents noted that "earning a lot of money," was a contributing factor to their financial success. Instead of citing those things that were beyond their control like family circumstances, the wealthy individuals noted the biggest contributing factors were "saving early and regularly," cited by 56% of respondents, 38% felt "controlling spending" was key, and "38%" highlighted "making smart investment choices."
What we can learn
Consider an example of a 25-year-old who made $38,750 and received a 3% raise each year, working until they were 72. Let's then say they save 5% of their income each year, and then pledge to save just 0.1% more each year. So when they're 30, they'll be saving 5.5% and by the time the