You’re not alone—many people assume that most millionaires simply inherited their wealth. But is that really the case?

Let’s dig into the numbers and bust this common financial myth.

Why People Believe It

The belief that most millionaires simply inherited their wealth is surprisingly common—nearly three-quarters of Millennials, for example, think this is true.

It’s easy to see why this idea sticks around. Stories about wealthy families passing fortunes down through generations are everywhere, from TV dramas to news headlines about billion-dollar inheritances.

The rise of high-profile heirs and celebrity “nepo babies” only adds fuel to the fire. Plus, with so much talk about generational wealth and the coming “great wealth transfer,” it’s natural to assume that most millionaires just got lucky in the family lottery.

There’s also a psychological comfort in this myth. If wealth is mostly inherited, then it feels like becoming a millionaire is out of reach for the average person—just a matter of luck or being born into the right family.

This belief can serve as an excuse, making it easier to dismiss the idea that hard work, discipline, and smart investing can actually lead to significant wealth. 

Additionally, with so much talk about the looming “great wealth transfer” and the staggering sums set to pass from baby boomers to their heirs, it’s no wonder many people assume most millionaires got their start with a family windfall. 

But while inheritance does play a role for some, the reality is much more nuanced—and far more encouraging for those willing to put in the effort.

The Reality

Here’s the truth: the vast majority of millionaires didn’t inherit their wealth—they earned it. It’s been proven time and time again.

According to recent surveys, only about 11% of American millionaires say they inherited their wealth, while a whopping 80% are first-generation wealthy, having built their fortunes through hard work, smart investing, and disciplined saving. 

They invest well, use financial advisors where it makes sense, and work hard and take smart risks to build their wealth.

For instance, the Cato Institute has consistently proven the vast majority of millionaires earned their wealth rather than inherited it. The notion that “most millionaires inherit their wealth” is a myth, Cato says.

A Ramsey Solutions study of 10,000 millionaires found that only 21% of millionaires received any inheritance at all. Of those, 16% inherited more than $100,000 and only 3% got more than a million.

The late Dr. Thomas Stanley, who wrote the influential book “The Millionaire Next Door“, spent years studying millionaires in the United States from all walks of life. His findings prove just how little of an influence inheritance has on building wealth.

From Chapter 1 of his book, here are a few of his most insightful findings:

• Only 19 percent receive any income or wealth of any kind from a trust fund or an estate.
• Fewer than 20 percent inherited 10 percent or more of their wealth.
• More than half never received as much as $1 in inheritance.
• Fewer than 25 percent ever received “an act of kindness” of $10,000 or more from their parents, grandparents, or other relatives.
• Ninety-one percent never received, as a gift, as much as $1 of the ownership of a family business.
• Nearly half never received any college tuition from their parents or other relatives.
• Fewer than 10 percent believe they will ever receive an inheritance in the future.

Even among billionaires, most are self-made: as of 2023, nearly 2,000 out of 3,323 global billionaires earned their fortunes themselves, compared to just 314 who inherited their wealth.

Long-term studies show that only about 30% of wealthy families manage to maintain their wealth beyond two generations, and just 10% beyond three—meaning most fortunes don’t last and most millionaires today didn’t start out rich. While inheritance does play a role in wealth for some, it’s far from the norm.

In fact, only a small percentage of millionaires inherited $1 million or more, and many received little or nothing at all.

Expert Tip

If you want to build wealth, focus on what you can control: consistent saving, smart investing, and living below your means.

Don’t get discouraged by the myth that you need to be born rich to become wealthy. Most millionaires followed a plan, invested wisely, and worked hard to reach their goals.

Bottom Line: The idea that most millionaires just inherited their wealth is simply not true. The majority are self-made, proving that with determination and good financial habits, building real wealth is possible—no trust fund required.

So instead of envying those who seem to have it all handed to them, take inspiration from the countless millionaires who started from scratch and made it happen themselves.

The post Most millionaires lucked into or just inherited their wealth first appeared on Money Unrated.

In reality, consistent saving and investing are possible—and effective—at nearly any income level. It’s how people build wealth, regardless of their income.

Remember: It’s a myth that all high-income people are wealthy.

Why People Believe It

Many people equate wealth-building with high salaries, assuming that only those with substantial incomes have “extra” money to set aside.

Did you know that Dave Ramsey found that nearly 1/3rd of millionaires never earned more than $100,000/year? And almost 80% of millionaires didn’t receive an inheritance either.

This misconception is reinforced by images of wealthy investors and stories of people who became rich through large investments, making it seem like saving and investing are out of reach for the average person. 

Additionally, the pressure of everyday expenses and debt can make saving feel impossible, especially for those living paycheck to paycheck.

The Reality

Here’s the truth: You don’t need to be wealthy to invest. On the contrary, investing is how the vast majority of people get wealthy.

Even small, regular contributions can add up significantly over time thanks to the power of compounding interest. 

Many financial institutions and investment platforms now offer low or no minimums, making it easier than ever for anyone to begin investing—even with just a few dollars. 

Studies and expert advice show that what matters most is consistency and time in the market, not the size of each contribution.

So, how can you build wealth without a high salary?

Here are five practical tips to build wealth through saving and investing, without a high salary:

• Set a Realistic Budget and Track Spending
  Carefully track your income and expenses to find areas where you can cut back, even if only by a small amount. Use budgeting methods like the 50/30/20 rule to consistently allocate money toward savings and investments.
• Automate Your Savings
  Set up automatic transfers to a savings or investment account each payday. Automating this process helps you build wealth consistently and reduces the temptation to spend what you might otherwise save.
• Start Investing with Small Amounts
  You don’t need a lot to begin investing. Use micro-investing apps or low-cost index funds and ETFs to start building your portfolio, taking advantage of compound growth over time.
• Prioritize Paying Down High-Interest Debt
  Focus on eliminating high-interest debt, such as credit cards or payday loans. Reducing debt frees up more of your income for saving and investing and improves your overall financial health.
• Take Advantage of Tax-Advantaged Accounts
  Contribute to retirement accounts like a 401(k) or IRA, even with small amounts. These accounts offer tax benefits that help your money grow faster and can make a significant difference over time.

Expert Tip

Start by saving or investing whatever amount you can, no matter how small.

Set up automatic transfers to a savings or investment account to make the process effortless and consistent. Over time, increase your contributions as your financial situation improves.

Remember, the key to building wealth is not how much you make, but how consistently you save and invest, and how long you allow your money to grow.

Bottom line: You don’t need a high income to build wealth—consistent saving, smart budgeting, and starting to invest early with whatever you can afford are the real keys to long-term financial success. Small, steady steps can lead to big results over time.

The post You need a high income to save and invest money first appeared on Money Unrated.