Everyday Millionaires

Introduction

In "Everyday Millionaires," Chris Hogan sets out to debunk the myths surrounding millionaires and reveal the truth about how ordinary people can build extraordinary wealth. Drawing from the largest study ever conducted on millionaires, involving over 10,000 American millionaires, Hogan presents a compelling case that becoming a millionaire is within reach for anyone willing to follow certain principles and behaviors.

Hogan's journey to becoming a financial coach began when he started working with Dave Ramsey, the renowned radio host and author known for his teachings on fiscal discipline and wealth creation. This experience opened Hogan's eyes to a new way of thinking about money and wealth. He realized that many of the common beliefs about millionaires were simply not true, and he set out to uncover the real habits, beliefs, and strategies that lead to financial success.

The book aims to inspire readers by showing that millionaires are not a special breed of people born into privilege or blessed with extraordinary luck. Instead, they are ordinary individuals who have made smart choices, worked hard, and stayed committed to their financial goals over time. By sharing the stories and insights gathered from his extensive research, Hogan provides a roadmap for anyone aspiring to achieve millionaire status.

The Power of Belief

One of the fundamental principles Hogan emphasizes is the importance of believing in your ability to become a millionaire. He argues that the first step towards financial success is rejecting the notion that the American dream is dead or that the average person can't get ahead in today's economy.

Hogan shares his own experience as a black man raised by a single parent in Kentucky, illustrating how the idea of becoming a millionaire once seemed impossibly distant to him. However, he discovered that with an unshakeable belief in oneself, anything is possible. This mindset shift is crucial for anyone aspiring to build wealth.

To drive this point home, Hogan uses the example of Roger Bannister, the British runner who broke the four-minute mile barrier in 1954. Before Bannister's achievement, it was widely believed that running a mile in under four minutes was physically impossible. However, once Bannister proved it could be done, others quickly followed suit. This story illustrates how breaking through mental barriers can lead to real-world achievements.

Hogan emphasizes that there are nearly eleven million millionaires in America today, proving that becoming a millionaire is not only possible but achievable for many. He encourages readers to look around and see that others have done it, which should serve as motivation and proof that it's within reach for them too.

Moreover, Hogan stresses the importance of being proud of financial success once it's achieved. The millionaires in his study believe that winning is always a good thing and not something to be ashamed of. This doesn't mean they win every time, but rather that they use setbacks as motivation for their next big win.

Debunking Millionaire Myths

Myth 1: Millionaires Inherit Their Wealth

One of the most pervasive myths about millionaires is that they inherit their wealth or are born into rich families. Hogan's research definitively disproves this notion. In fact, 79% of the millionaires interviewed in his study received no inheritance whatsoever. The vast majority of millionaires built their wealth through hard work, sacrifice, and consistent financial planning.

Hogan shares the story of Thomas, who grew up in poverty and dysfunction but managed to accumulate a net worth of $2.6 million by the time he retired from teaching. Thomas's success came from avoiding debt, paying in cash, working extra when possible, and investing wisely – not from any inherited advantage.

The author draws a parallel between the misconceptions about millionaires and the public perception of Olympic swimmer Michael Phelps. While many attribute Phelps' success solely to genetic gifts, they overlook the incredible amount of hard work and dedication he put into his training. Similarly, the success of millionaires is often the result of consistent effort over time, not just luck or inheritance.

Myth 2: Wealthy People Take Big Risks

Another common misconception is that millionaires achieve their wealth through risky investments or get-rich-quick schemes. Hogan's research reveals that this couldn't be further from the truth. The millionaires in his study consistently avoided high-risk investments and instead focused on steady, long-term growth strategies.

For example, none of the millionaires in the study mentioned investing in single stocks, recognizing the inherent risk of putting all their eggs in one basket. They also steered clear of trendy but volatile investments like cryptocurrencies, which are unregulated and highly speculative.

Instead, 79% of the millionaires surveyed built their wealth through employer-sponsored retirement plans, primarily investing in growth stock mutual funds. These investments offer a balance of reasonable risk and good potential for growth over time.

Hogan emphasizes that the path to wealth for most millionaires is predictable and steady, not quick or flashy. In fact, 95% of the millionaires in the study took more than ten years to reach millionaire status, with most achieving their first million around age 49. This long-term approach stands in stark contrast to the get-rich-quick mentality that often leads people astray.

Myth 3: Millionaires All Have Prestigious Educations and High-Paying Jobs

While it's true that most millionaires in Hogan's study have a college education (88% have a bachelor's degree), the myth that they all attended prestigious, expensive schools is unfounded. In fact, 62% of the millionaires surveyed earned their degrees from public state schools.

Hogan points out the significant cost difference between private and public universities, with private schools often costing more than twice as much for the same degree. He strongly advises against taking on student loans to attend expensive private schools, noting that 68% of the millionaires in his study didn't take out any student loans at all.

Contrary to popular belief, most millionaires don't have exceptionally high-paying jobs either. Only about a third of them have made $100,000 a year on average throughout their careers. The top three professions among millionaires are engineer, accountant, and teacher – normal jobs with normal salaries. What sets millionaires apart is not their annual income, but their financial behavior and discipline.

The Millionaire Mindset

Taking Responsibility

A key characteristic of millionaires is their willingness to take full responsibility for their financial success. Hogan contrasts this with the general population, where many people worry about their financial future but fail to take concrete action to improve it.

For instance, while 56% of Americans express concern about retirement, many aren't actively preparing for it. Half of the baby boomers surveyed had less than $10,000 saved, and 80% of millennials wished they were investing more but weren't taking steps to do so.

Millionaires, on the other hand, understand that they alone are in charge of their financial destinies. A staggering 97% of millionaires in Hogan's study believed they were solely responsible for what happens to them financially. This mindset of personal responsibility is crucial for anyone aspiring to build wealth.

Hogan emphasizes the importance of knowing your current financial position, starting with calculating your net worth. This involves adding up everything you own and subtracting your debts. Once you have this baseline, you can set clear financial goals and create a plan to achieve them.

Practicing Intentionality

Another key trait of millionaires is their intentionality in financial matters. Hogan describes this as the difference between "deciding" and "sliding" through life. Millionaires make conscious decisions about their money rather than passively drifting along without a plan.

The author shares the story of Frank and Alice, a millionaire couple who intentionally chose to live below their means and save for the future, even when Frank worked on Wall Street. Their disciplined approach, learned from Frank's frugal immigrant family, led them to accumulate a net worth of $6 million.

This intentional approach to finances is common among millionaires:

• 94% keep their expenses lower than their incomes
• 95% make saving for big expenses a priority
• Most live on a carefully planned budget

Hogan emphasizes that a budget isn't a restrictive cage but a tool for taking control of your money. It brings clarity to your finances, allowing you to make better choices about where your money goes and how to make it work harder for you.

Setting and Achieving Goals

Goal-setting is another crucial behavior of millionaires. Hogan reports that 97% of millionaires in his study almost always achieve the goals they set for themselves. He introduces the SMART framework for setting effective goals:

• Specific: Goals should be detailed, clear, and unambiguous.
• Measurable: There should be clear metrics or milestones to track progress.
• Achievable: Goals should be realistic and attainable.
• Relevant: Goals should align with your overall life vision and other objectives.
• Time-sensitive: There should be clear deadlines to create a sense of urgency.

Hogan advises writing down goals to increase accountability and the likelihood of achievement. He suggests a mix of short-term and long-term goals, with short-term wins helping to maintain motivation for bigger, life-changing long-term goals.

One significant long-term goal Hogan recommends is paying off your house early. This transforms your home from a liability into a 100% asset and frees up money that can be invested to build wealth even faster.

The Path to Millionaire Status

Harnessing the Power of Compound Interest

Patience and consistency are key traits of millionaires, allowing them to benefit from the power of compound interest. Hogan explains how compound interest works, with returns earning their own returns over time, creating a snowball effect that can dramatically grow wealth over the long term.

The author's research shows that most millionaires build their wealth through employer-sponsored retirement plans like 401(k)s. He provides a step-by-step guide for maximizing these plans:

1. Invest in your 401(k) up to the company match (if offered).
2. Put as much as possible into a Roth IRA, which offers tax-free growth.
3. If you hit the Roth IRA contribution limit or income limit, put the remainder of your 15% savings goal back into your 401(k).

Hogan emphasizes that 15% is just a starting point. Once major debts like mortgages are paid off, he advises increasing contributions to retirement accounts even further.

The Importance of Professional Guidance

While the book provides a wealth of information and strategies, Hogan strongly recommends enlisting the help of investment professionals. He compares managing your finances to representing yourself in court – it's generally not a good idea to go it alone.

Hogan advises readers to seek out qualified investment professionals, interview them carefully, and choose someone whose experience, certifications, philosophy, and fees align with their needs and goals. This professional guidance can be invaluable in navigating the complex world of investments and long-term financial planning.

Real-Life Examples of Everyday Millionaires

Throughout the book, Hogan shares stories of real millionaires he encountered during his research. These examples serve to illustrate the principles he discusses and show how ordinary people from various backgrounds have achieved millionaire status.

One such example is the story of Michelle, a single mother who worked as a second-grade teacher. Despite her modest salary, Michelle was intentional about her finances from the start of her career. She lived below her means, avoided debt, and consistently invested in her retirement accounts. By the time she retired, Michelle had accumulated a net worth of over $2 million.

Another inspiring story is that of Carlos and Maria, immigrants who came to the United States with very little. They worked multiple jobs, lived frugally, and prioritized saving and investing. Over time, they built a successful small business and achieved millionaire status through consistent hard work and smart financial decisions.

These stories, and many others like them, demonstrate that becoming a millionaire is not about having a high-paying job or coming from a wealthy background. Instead, it's about making smart choices, living below your means, avoiding debt, and consistently investing over the long term.

The Role of Education in Building Wealth

While Hogan emphasizes that expensive, prestigious educations are not necessary for becoming a millionaire, he does stress the importance of education in general. The vast majority of millionaires in his study had college degrees, highlighting the value of higher education in building wealth.

However, Hogan cautions against the trap of student loan debt. He advises readers to consider more affordable options like state schools or community colleges, which can provide excellent education at a fraction of the cost of private universities. He also suggests exploring scholarships, grants, and work-study programs to minimize the need for student loans.

Furthermore, Hogan emphasizes that education doesn't stop with a college degree. Many millionaires in his study were lifelong learners, constantly educating themselves about personal finance, investing, and business. This ongoing self-education played a crucial role in their financial success.

The Importance of Avoiding Debt

One of the most consistent themes throughout the book is the importance of avoiding debt. Hogan repeatedly emphasizes that debt is one of the biggest obstacles to building wealth, and most millionaires in his study were diligent about avoiding or quickly paying off debt.

He advises readers to:

1. Avoid taking on new debt, especially for depreciating assets like cars.
2. Pay off existing debts as quickly as possible, starting with high-interest debts like credit cards.
3. Live below your means to free up money for debt repayment and investing.
4. Use cash for purchases whenever possible to avoid accumulating new debt.

Hogan shares stories of millionaires who made significant sacrifices early in their careers to pay off debt quickly, setting themselves up for long-term financial success. He argues that the temporary discomfort of living frugally to pay off debt is well worth the long-term benefits of financial freedom.

The Millionaire Approach to Spending

Contrary to popular belief, most millionaires in Hogan's study were not big spenders. Instead, they were intentional and often frugal with their money. This doesn't mean they never enjoyed luxuries, but rather that they made conscious choices about their spending based on their values and long-term goals.

Hogan shares several common spending habits among millionaires:

1. They live in modest homes: Many millionaires live in middle-class neighborhoods and avoid overspending on housing.
2. They drive used cars: Instead of buying new luxury vehicles, many millionaires opt for reliable used cars.
3. They shop for bargains: Millionaires often look for deals and aren't afraid to use coupons or shop at discount stores.
4. They prioritize experiences over things: Many millionaires prefer to spend on travel or family activities rather than accumulating material possessions.

These habits allow millionaires to maintain a high savings rate, which is crucial for building and maintaining wealth over time.

The Role of Giving in Millionaire Lives

An interesting finding from Hogan's research is that many millionaires are generous givers. Despite their frugal habits in many areas, they often prioritize charitable giving and helping others.

Hogan suggests that this generosity contributes to their overall happiness and sense of purpose. Many millionaires in the study reported that giving to causes they care about was one of the most rewarding aspects of having wealth.

This generosity often extends to helping family members as well. While most millionaires didn't receive inheritances themselves, many planned to leave inheritances to their children or grandchildren. However, they typically did this in a way that encouraged financial responsibility rather than creating dependency.

Overcoming Obstacles on the Path to Wealth

Hogan acknowledges that the path to becoming a millionaire is not always smooth. Many of the millionaires in his study faced significant challenges along the way, including job losses, market downturns, and personal setbacks.

What set these millionaires apart was their resilience and ability to stay focused on their long-term goals even in the face of adversity. Hogan shares strategies for overcoming common obstacles:

1. Develop an emergency fund to handle unexpected expenses or income loss.
2. Stay invested during market downturns, understanding that markets historically recover and grow over time.
3. Continuously educate yourself about personal finance and investing to make informed decisions.
4. Surround yourself with positive, supportive people who encourage your financial goals.
5. Stay motivated by regularly reviewing your progress and celebrating small wins along the way.

The Importance of Marriage and Family

Hogan's research revealed that most millionaires were married and had stayed married to the same spouse. He argues that a stable marriage can be a significant factor in building wealth, as it allows for shared financial goals and combined efforts to save and invest.

However, Hogan is quick to point out that this doesn't mean single individuals can't become millionaires. He shares examples of successful single millionaires as well. The key, he says, is to have a strong support system and to be extra disciplined with your finances when you're managing them on your own.

For those who are married, Hogan emphasizes the importance of being on the same page financially with your spouse. He advises couples to:

1. Have regular, open conversations about money and financial goals.
2. Create and stick to a budget together.
3. Make major financial decisions as a team.
4. Support each other's career growth and income-earning potential.

The Millionaire Legacy

Many of the millionaires in Hogan's study were focused not just on building wealth for themselves, but on creating a lasting legacy for their families and communities. This often involved:

1. Teaching their children about money management and the value of work.
2. Setting up trusts or other structures to pass on wealth responsibly.
3. Getting involved in community organizations and mentoring others.
4. Supporting causes and charities that align with their values.

Hogan encourages readers to think beyond their own financial success and consider how they can use their wealth to make a positive impact on others.

Final Thoughts: You Can Do It Too

Hogan concludes the book by reiterating his core message: becoming a millionaire is within reach for ordinary people who are willing to follow certain principles and behaviors. He emphasizes that it's not about having a high income or getting lucky, but about making smart choices consistently over time.

Key takeaways include:

1. Believe in your ability to become a millionaire.
2. Take full responsibility for your financial future.
3. Live below your means and avoid debt.
4. Invest consistently over the long term, taking advantage of compound interest.
5. Set clear financial goals and work steadily towards them.
6. Educate yourself about personal finance and seek professional advice when needed.
7. Be patient and stay focused on your long-term objectives.

Hogan encourages readers to start their journey to millionaire status today, no matter their current financial situation. He reminds them that every millionaire started somewhere, and with the right mindset and behaviors, anyone can join the ranks of everyday millionaires.

In closing, "Everyday Millionaires" offers a refreshing and inspiring perspective on wealth-building. By debunking common myths and showcasing the real habits and behaviors of millionaires, Chris Hogan provides a practical roadmap for anyone aspiring to achieve financial success. The book serves as both a motivational tool and a practical guide, empowering readers with the knowledge and strategies they need to take control of their financial futures and build lasting wealth.