Secrets of Self-Made Millionaires
Do you dream of becoming rich but aren't sure how to make your millions--or better yet, billions? Who better to ask than the rich themselves about how they climbed their way to the top?
Steve Siebold did. He's spent the last 30 years interviewing the world's wealthiest people.
Siebold, author of How Rich People Think, spoke with U.S. News about what the rich have in common, how self-made millionaires attained their wealth, and why now is the best time to strike it rich. Excerpts:
[See What It's Really Like to Be Rich.]
What sparked your fascination with the rich?
I was a broke college student in 1984 and I wanted to be rich. But I didn't feel like I was getting the information I needed from my college business classes. In a lot of the classes, the business professors seemed to put down the rich, and that didn't make sense to me. So I started looking for outside sources until I found a millionaire to interview.
Was he difficult to find?
Yes, because I didn't know any millionaires and I was just a kid. I was probably 19 years old. And I found the rich don't really like to flaunt their wealth. Most of the rich, in my experience, aren't like Donald Trump--they're the polar opposite. They want to be left alone, because as soon as people know they've got a lot of money, people come after them and the media goes after them. They want to be quiet and unexposed.
The deal they made with me was I wouldn't give their name out unless they gave me permission, and very few of them gave me permission.
Have you found any commonalities among the people you've interviewed?
Their personality styles vary: Some are introverts, some are extroverts. But their belief systems around money are the same. That was the one thread that really helped me throughout the process: They all have a really positive relationship with money. They think about money in terms of freedom, as opposed to the negative relationship a lot of people have with money.
The net worth of the richest Americans grew by 13 percent in the past year to $1.7 trillion. Does that surprise you?
No, not at all. If you look at the global equity markets over the last few years, they're up 18 percent. As where the average Americans have their money wrapped up in their home equity and low-interest vehicles, like 401(k)s, the rich have their money in the global equity markets. They've got the money to invest, and it's a good place to be right now. They're also in a nice position because they can afford to lose.
[See 10 Questions That Will Help You Earn More Money.]
Did self-made millionaires simply work harder than the rest of us to get where they are?
Most people think the rich got lucky. People think their money wasn't earned by hard work and strategic, calculated thinking, which is not the truth for most people. There are crooks in every income category, but in my experience, there's no more on the rich side than the poor side.
But it's interesting how the self-made rich are a really hated group. They're discriminated against, even in the wealthiest country of the world. I think it's really sad. I think we should celebrate these people. There's a tendency to demonize them, which I think is just crazy.
Is there any way that contempt some people have for the rich can change?
I hope so. It's so easy to take a shot on people who are rich. I hope that over time we can change our beliefs in this country, because if we don't lead the way in changing people's beliefs about capitalism and wealth, I think we're really in trouble.
Do rich people feel that resentment to the point where they only want to associate with other rich people?
Absolutely. I call it 'cocooning.' But they don't like to talk about money when they get together. They genuinely like to associate with one another. But many people think it's because the rich think they're better than other people, and it's not--it's because they're discriminated against. I think they just want to be with similar people who won't discriminate against them. They're a minority that people target, which is why they tend to hide out and stick together.
Richard Branson has said that for people to climb to the top, they have to set seemingly unachievable goals for themselves and rise above them. Is he right?
They all seem to do that. They set these huge goals; they want the yachts, they want the vacation homes. One guy told me he was going to take a $400 million company he and his partners were acquiring and sell it for $4 billion. He said they figured on paper they could sell it for $1 billion, but they wanted to sell it for $4 billion because they wanted to stretch themselves.
Guys like Branson set these outrageous goals and they achieve it, so they do it again. Before they make their first $1 million, they may not believe they can make it. But once they overcome that hurdle, it seems to get easier. They get that one big success, which everyone told them they couldn't do, and then they replicate it. They take these nonlinear leaps of success, where they go from $1 million to $10 million to $30 million, and the catalyst is their belief that it's possible. I don't think it's their competence, because a lot of people are competent, but they're confident in themselves.
At some point, they stopped listening to anyone but themselves. They learned to trust themselves so much because of their success.
[In Pictures: The 10 Youngest Billionaires in the World]
Why is it your belief that more self-made millionaires will emerge in the next five years than in any other time in history?
There all these new problems with the economic crash, all this uncertainty. Corporate America right now is sitting on $2.5 trillion in cash. The whole economy is only $15 trillion. All of this wealth is out there, but a lot of giant corporations are lost. They're dealing with all these new problems: the economic climate, they don't know where to put their money, there's too much government regulation, and they need people to help them figure it out. So there's room for new people to emerge to help solve those problems.
What's the most important lesson the middle class should take away from the rich?
I would say that having money and making money and being wealthy is a positive thing--there's nothing negative about it. They need to ignore all of these messages and this brainwashing that goes on, like people telling them the love of money is the root of all evil. I think the challenge for the average person is to have a positive outlook on being wealthy.
