What Real Estate Creates 90% of Millionaires (2024)

FAQs

Where do 90% of millionaires come from? ›

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.

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.

Real estate offers a tangible and stable asset class that can withstand economic fluctuations. It's not just about making money; it's about preserving and growing wealth over generations. One of the secrets to millionaire wealth is the creation of multiple streams of passive income.

One reason commercial properties are considered one of the best types of real estate investments is the potential for higher cash flow. Investors who opt for commercial properties may find they represent higher income potential, longer leases, and lower vacancy rates than other forms of real estate.

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.”

The top 1% of household net worth in the U.S. was just shy of $13.7 million in 2023. An individual would have to earn an average of $407,500 per year to join the top 1%. A household would need an income of $591,550. The median household income was $74,580 in 2023 and $45,440 for individuals.

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

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.

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.”

Do millionaires use credit cards? ›

Although most adults have credit cards, millionaires are even more likely to use them. According to the Federal Reserve, almost all adults with incomes over $100,000 have a credit card in their name.

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.

Federal Tax Benefits

The government encourages real estate ownership. Buying real estate often lowers your taxes. With depreciation, it can appear as though you're running at a loss. Even though you're making income, you have lower taxes and no self-employment tax on rental cash flow.

Investing in real estate can be one of the best ways to accumulate wealth. Wealth grows through compounding, which means putting money into something on the expectation that you will receive more money back later.

Real estate investing stands as one of the most time-tested and proven methods for building wealth and securing financial freedom.

Countries with Most Millionaires

Representing over 40% of global millionaires is the United States, ranking first with 24.5M individuals identified as millionaires, a testament to the important role the country plays in global economics and its affinity for fostering wealth creation.

Labor income is the most important determinant of wealth, except in the top 1%, where capital income and capital gains on financial assets become more important. Interestingly, inheritances and gifts are not an important determinant of wealth, even at the top of the wealth distribution.

There are 47 million millionaires globally. It may not surprise you that the majority of the world's millionaires are residing in the USA.

1. New York City. Of all the cities in the US, it's little surprise that the Big Apple has the most millionaires. New York City had 349,500 as of December, a jump of 48% compared to 2013, the Henley and Partners' report said.