Sometimes, we know how the wealthiest people in the country became wealthy. But sometimes we don’t.
In its quarterly Wealth Segmentation Series report Financial Behaviors and the Investor’s Mindset, Spectrem asked Ultra High Net Worth investors with a net worth between $5 million and $25 million what factors contributed to the creation of their wealth. There are some answers that are surprising.
The top factor on a percentage basis was “hard work’’ which 96 percent of the UHNW investors cited as being a factor in their wealth. Ninety-three percent indicate “education’’ was a factor, while 90 percent credit “smart investing’’ as one of the ways they became wealthy.
When the UHNW investors were segmented based on age, only 81 percent of investors under the age of 49 said “hard work’’ got them where they are from a wealth standpoint. That age group was far more likely than others to point to “inheritance” (38 percent to 29 percent overall) and “running my own business” (46 percent to 32 percent overall). That age group had the highest percentage (23 percent) of respondents crediting “family connections”.
That youngest group was also less likely to note “education’’ as a factor, with only 81 percent agreeing that was involved to the average of 93 percent.
After the top three factors, the next most popular choice was “frugality’’, which was a factor for 81 percent of all investors, and for 86 percent of investors over the age of 64. The only other factor given the nod by at least 70 percent of investors was “taking risk’’, which was tabbed by 72 percent of the investors.
Some investors were willing to admit that happenstance had some involvement in where they ended up financially. Sixty-one percent said “being in the right place at the right time’’ played a role in their wealth, while 57 percent said “luck” was a factor.
Meanwhile, some UHNW investors admitted that someone else played a role as well. Forty-three percent said “decisions made for me by my financial advisor’’ was a factor in creating their wealth.
To learn more about the UHNW, click here