Do Millionaires Invest in Real Estate? The Wealth-Building Secret (2024)

FAQs

Do Millionaires Invest in Real Estate? The Wealth-Building Secret? ›

One of the secrets to millionaire wealth is the creation of multiple streams of passive income. Real estate investments, particularly rental properties, generate ongoing rental income, contributing to a consistent cash flow. Millionaires often have a long-term perspective when it comes to investments.

Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.

Buying a home may be the "American Dream," but it's certainly not a prerequisite for building wealth. Owning a home is expensive, even if you rent it out, and you're never guaranteed a profit. Consider REITs instead, and maximize your investments in the market to build long-term wealth.

Real estate investment has long been a cornerstone of financial success, with approximately 90% of millionaires attributing their wealth in part to real estate holdings. In this article, we delve into the reasons why real estate is a preferred vehicle for creating millionaires and how you can leverage its potential.

According to The National Study of Millionaires, 3 out of 4 millionaires (75%) said regular, consistent investing over a long period of time is the reason for their success.

In 2023, the top 1% of household net worth in the U.S. started at $13.7 billion. An individual would need to earn an average of $407,500 per year in order to join the top 1%, and a household would need an income of $591,550. The median household income was $74,580 in 2023 and $45,440 for individuals.

While get-rich-quick schemes sometimes may be enticing, the tried-and-true way to build wealth is through regular saving and investing—and patiently allowing that money to grow over time. It's fine to start small. The important thing is to start and to start early. Earn money and then save and invest it smartly.

But while the answer to 'can property investment make you rich' is yes, becoming a millionaire through property investing can often take time. Some people will want to be a millionaire before retirement. If you're one of the people looking to maximise your wealth quickly, here are some tips to speed up the process.

The most common way to make money in real estate is through appreciation, an increase in the property's value. Location, development, and improvements determine real estate appreciation. Real estate investors commonly rely on income from rents for residential and commercial properties.

What do 90% of millionaires do? ›

Ninety percent of all millionaires become so through owning real estate.

1. JP Morgan Private Bank. “J.P. Morgan Private Bank is known for its investment services, which makes them a great option for those with millionaire status,” Kullberg said. “With J.P. Morgan, each client is given access to a panel of experts, including experienced strategists, economists and advisors.”

Millionaires can insure their money by depositing funds in FDIC-insured accounts, NCUA-insured accounts, through IntraFi Network Deposits, or through cash management accounts. They may also allocate some of their cash to low-risk investments, such as Treasury securities or government bonds.

Millionaires prioritize avoiding consumer debt, making wise financial decisions, and aligning spending with long-term goals.

It may sound like an intimidating term, but it really isn't once you know what it means. Here's a little secret: compound interest is a millionaire's best friend. It's really free money.

The key for most millionaires is to save money before spending it. No matter how much their annual salary may be, most millionaires put their money where it can grow, usually in stocks, bonds and other types of stable investments.

Shelby Elias | “90% of all millionaires become so through owning real estate.” This famous quote from Andrew Carnegie, one of the wealthiest entrepr... Instagram.

Choose the right career

And one crucial detail to note: Millionaire status doesn't equal a sky-high salary. “Only 31% averaged $100,000 a year over the course of their career,” the study found, “and one-third never made six figures in any single working year of their career.”

Dave Ramsey recently conducted a study of over 10,000 millionaires. Although some millionaires have high-paying jobs, only 31% average $100,000 per year during their careers. The keys to becoming a millionaire are spending wisely and investing consistently.

Many self-made millionaires have money coming in from several places, including their salaries, dividends from investments, income from rental properties and investments they have made in other business enterprises, to name a few examples. If one income stream slows down, there's another that can take its place.