4 Different Paths to Becoming a Millionaire

Becoming a millionaire is more achievable than you might think. Lots of people prove every year that you don’t have to be a high-flying banker, lottery winner or be born into a rich family to build up your wealth above seven figures. There are several different paths that can help you become a millionaire. Of course, the journey isn’t going to be easy, but hopefully knowing which path is best for you can save you time and make the journey a lot smoother.

In 2004, Tom Corley — an accountant, financial planner and author of ”Rich Habits: The Daily Success Habits of Wealthy Individuals” spent 5 years interviewing and researching the daily lives and characteristics of 233 high net worth individuals. It became clear to him that there were 4 broad paths that these individuals had taken which had eventually made them millionaires, with one standing out as perhaps the easiest for most people to follow and imitate.

One of the paths Tom’s studied, which he called The Dreamers path, accounted for approximately 28% of the millionaires. They accumulated an average net worth of $7.4 million (more than any of the other groups had) over an average 12-year period.

These participants had built their wealth through what he calls “the pursuit of a dream, such as starting a business, becoming a successful actor, musician or author.”

He goes on to say “All of them told me that pursuing their dreams was one of the most rewarding things they had done in their lives. They loved what they did for a living, and their passion showed up in their bank accounts.”

However, be aware that success on this path can involve long hours and perseverance until you make it big. Tom continued: “The Dreamers in my study worked more than 61 hours per week before finally achieving their dreams. Weekends and vacations were almost non-existent… Trying to make ends meet was not always easy… To finance their dreams, some decided to put off buying a home, while others dipped into their retirement savings.”

For most people, this is maybe not the easiest path to building wealth, but if you have a huge passion, talent or hobby that you love doing, this could one day land you millions.

Path number 2 he termed The Company Climbers path.

Tom explains them as: “Climbers are individuals who work for a big company and devote all of their energy into climbing the corporate ladder until they land a senior executive position.” Approximately 31% of the group people studied were successful through being ‘Company Climbers’.

It took these research participants on average 22 years to build an average net worth of $3.4 million, which was mostly gained through being compensated on top of their salary with Company stocks or a lucrative profit-sharing arrangement.

Vital to becoming a ‘Climber’ are strong relationship-building skills, ability to network, and making enduring connections with higher ups within your particular industry.

Like the Dreamers, Tom noted that “Climbers also work long hours. The ones I interviewed all arrived at the office early and left late. Many were required to travel frequently and even had to sacrifice a lot of their vacation time.”

Another factor affecting a Climber’s success is the success of the company they have invested their time into. If it ends up in financial difficulty, the Climber might not receive the rewards they anticipated for all of their efforts.

Path 3, The Virtuosos path, is that taken by those who are some of the best at what they do within their particular profession. They possess above average knowledge and skills and for that they are compensated higher than others.

Some of the areas they specialized in were medicine, law, technology and finance. Tom noted that “Virtuosos aren’t necessarily born with natural intelligence. They must spend many years continuously studying and learning. Formal education, such as advanced degrees, is usually a requirement.

This means investing an enormous amount of money and time before seeing any payoff at all. Not everyone has the ability… or the financial resources to pursue advanced degrees.”, his study noted.

The Virtuosos path was taken by approximately 19% of the study participants, taking them an average of 20 years to reach an average net worth of $4 million.

The final path identified in Tom’s study is perhaps the easiest for the majority of people to follow. 22% of the millionaires studied had chosen this as their path to significant wealth — the Saver-Investors path. This path almost always guarantees a significant payoff, and the earlier you start, the earlier you’ll reach the million-dollar mark. The Saver-Investors in the study made their first million dollars in their mid-to-late 30s and had accumulated on average a net worth of $3.3 million by the time they were in their mid-50s.

The study found they had 4 things in common:

1. “They typically had a middle-class income (many reached a six-figure salary early in their career, and if they didn’t, they lived very frugally.)

2. They had a low cost of living and preferred to save, rather than spend lavishly.

3. They saved 20% or more of their income.

4. They started investing their savings early in life and continued to do so prudently for many years.

No matter what their day job was, this group made saving and investing part of their routine; they were constantly thinking about smart ways to grow their wealth.”

Although the Savers-Investors requires some financial discipline and long-term commitment, it is the most achievable path to wealth that many people have successfully followed.

In Conclusion then,

The study shows that being a dreamer, a climber or a virtuoso are some of the most fruitful and quickest paths to enormous wealth, and if these paths match with your personality, then you should definitely consider putting your mind towards them. The Saver-Investors path, while not as lucrative as the others, is probably the most consistent and achievable for most people.

If you have your own theories about paths to becoming a millionaire, drop me a line in the comments.

Thanks for reading.

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