Despite of the fact that there are more than 10 million millionaires in the world, millionaires are not very well understood.  In fact, there are many myths about millionaires that you should know, especially if you would like to become one of them.  In this article we will help you understand these millionaire myths in order to better prepare you to become a millionaire yourself.

 

Myth # 1 – Millionaires Feel Rich

 

The first myth about millionaires is that they feel rich.  Sure, some millionaires, particularly Ultra High Net Worth Individuals certainly live a rich lifestyle and feel rich.  But these individuals represent only about 1% of all millionaires.  Many millionaires, especially the ones who have just recently joined the ranks by accumulating $1 million in net worth do not feel rich at all.  These people usually live on average-size houses, drive mid-priced domestic cars, and do not have any of the possessions that we typically associate with the rich, such as yachts and mansions.

 

Like most individuals, the average millionaire worries about retirement, their children’s education and health care.  They typically live below their means, keep track of their expenditures, and manage a budget.

 

What is the average millionaire worth?  About half of all millionaires have a net worth of $2.5 million dollars or less, according to the research firm TNS.  So how much exactly does it take to truly feel rich?  According to Fidelity the magic number is $23 million.

 

Myth # 2 – Money Does not Buy Happiness

 

It is an old cliché that money does not buy happiness.  But according to the Harrison Group, this is just another myth.  About 70% of millionaires report that money has brought them more happiness.   According to a new study by economists at the Wharton School of Business, there is a correlation between level of income and satisfaction in life.  But the interesting finding from this study is that it is not the ability to acquire more material things that makes people happier.  Instead, it is the freedom that money can buy.  It is the fact that millionaires have choices without necessarily having to worry about money.

 

Myth # 3 – Millionaires Do Not Pay Their Fair Share of Taxes

 

As a matter of fact, the top 1% of all income earners in America paid roughly 40% of all federal income taxes in 2005, according to the IRS.  This is not to say that millionaires do not have more opportunities to get financial advice that may lead to more efficient tax strategies.  It is also true that many millionaires are also business owners, which allows them to get tax deductions that many employees are not eligible to take.  But overall, millionaires do pick up a significant portion of the tax bill.

 

Myth # 4 – All Millionaires are Alike

 

Millionaires are as diverse a group of people as any other.  They come from all walks of life.  Some come from rich families, others from poor backgrounds.  Some built their wealth by running their owner businesses, others as employees working for others.  Some attended elite schools, others barely got by in their educational pursuits.  Some are conservatives, others liberals.  Some are religious, others are not.  There is no single mold that millionaires come from.  So regardless of your background or heritage, you too can be a member of the millionaire club.

 

Being a millionaire is a hefty goal, and on a percentage basis, very few people achieve this difficult mark.  Understanding what it means to be a millionaire is the first step in the right direction.