How Many Millionaires Actually Inherited Their Wealth?

When it comes to wealth building, there’s a whole lot of bad information out there! For example, a lot of people think millionaires get their money through a big fat inheritance. They think if you don’t come from a wealthy family, your chances of reaching millionaire status are slim.

But is that fact or fiction? The National Study of Millionaires—which is the largest study ever done on millionaires—uncovered the truth about how these men and women built their wealth. (Spoiler alert: Inheritances aren’t as important as you think.)

Did Millionaires Inherit Their Wealth?

Just how deep does the myth that millionaires’ wealth simply fell into their laps go? We found out that 74% of millennials believe millionaires inherited their money and more than half (52%) of baby boomers think the same thing.¹

But our study of millionaires blows that theory out of the water. Here are the facts:

• Only 21% of millionaires received any inheritance at all.
• Just 16% inherited more than $100,000.
• And get this: Only 3% received an inheritance at or above $1 million!²

Think about that: Most folks believe millionaires simply inherited their wealth, but the vast majority of millionaires didn’t get any inheritance at all—and those who did certainly didn’t get enough to make them millionaires!

And remember that an inheritance isn’t some automatic golden ticket to wealth. In fact, one study found that one-third of folks who receive an inheritance actually saw no change or a decline in their wealth afterward.³ Whether you get $10,000 or $100,000, what matters most is what you do with that inheritance.

How Many Americans Receive an Inheritance?

If 21% of millionaires inherited their money, how does that measure up against the rest of America? The Federal Reserve asked that question, and guess what their answer was . . . 21%.⁴

That’s right. Millionaires and the general population receive inheritances at the exact same rate. So, don’t miss this: Millionaires are no more likely to get an inheritance than their neighbor who’s swimming in debt.

And if you do happen to get an inheritance, you’re probably going to have to wait a long time to get one. The average age when Americans get an inheritance is 51,  and more than one-fourth of inheritances wind up going to folks over the age of 61.⁵ And the typical size of an inheritance these days? It’s just around $55,000.⁶  

So if you’re banking on an inheritance to make you a millionaire . . . you’re going to need a new plan!

Where Do Millionaires Get Their Money?

If only a small percentage of millionaires in our survey received an inheritance, then how do millionaires actually build their wealth? Work. Old-fashioned, gritty, roll-up-your-sleeves, get-your-hands-dirty work.

We gave the millionaires in our study a list of items that could contribute to someone becoming a millionaire, and then we asked them to rank them. What ranked number one, beating out everything else? Financial discipline. What ranked number two? Saving consistently.

Discipline and consistency. These two factors working together will beat out a high-paying job, an inheritance and luck every time. And the good news is, we can all choose discipline and consistency. They aren’t reserved for special or “lucky” people. Anyone can commit to being financially disciplined. That’s a choice you can make today!

Baby Steps Millionaires Who Didn’t Get an Inheritance

It’s easy to dismiss the idea of becoming a millionaire. You tell yourself it can’t be done unless you get an inheritance or end up as a contestant on Who Wants to Be a Millionaire? But here’s the true story of two Baby Steps Millionaires that proves otherwise:

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Meet Ben and Courtney. Ben and Courtney met in college and shared similar goals about staying out of debt and working hard toward financial independence. Growing up, Ben’s father and grandfather taught him that if he wanted something, he needed to work and save for it instead of borrowing money to pay for it. Meanwhile, Courtney’s father taught her a great work ethic.

Ben started mowing lawns when he was 14 years old and continued mowing lawns all through high school to save money for college. He went on to graduate with an engineering degree, no debt, and immediately started investing 15% of his $35,000 salary into his company 401(k).

When she was 19 years old, Courtney worked long, hard hours in fast food to pay for her college tuition at a local community college. Eventually, she found a better-paying job at a bank to earn more for tuition—and she also opened a Roth IRA account while contributing to her 401(k) as well. Courtney graduated with an education degree and began her career as a teacher.  

Once Ben and Courtney got married, they set up their budget to live off of just one of their incomes so they could save and invest the rest and avoid lifestyle creep—they didn’t want to spend more just because they were making more. At that point, they didn’t have children, so they were focused on maxing out their retirement accounts and paying off their house early.

Following the Baby Steps principles from a young age and growing their income from $50,000 to $185,000 in less than 20 years made it possible for Ben and Courtney to become millionaires before they turned 40 years old. As a 39-year-old supply chain manager and a 36-year-old teacher, their $1.7 million net worth looked like this:

• $620,000 in 401(k) accounts
• $450,000 in Roth IRAs
• $230,000 in a taxable account
• $50,000 in a 529 account
• $350,000 in a paid-for house

And here’s the kicker: Neither Ben nor Courtney received any money through inheritance to get to this point. What they did inherit from their parents was something much more valuable: the value of hard work and discipline.

Ben and Courtney’s story proves that you don’t need an inheritance to build wealth. Hard work and financial discipline created the foundation that helped them become millionaires before they were 40 years old!    

Want to learn more? Dave's new book, Baby Steps Millionaires, will show you the proven path that millions of Americans have taken to become millionaires—and how you can become one too! Grab your copy today to learn how to bust through the barriers preventing you from becoming a millionaire.

How Can You Become a Millionaire?

If you read Ben and Courtney’s story carefully, you can clearly see the steps you should take on your own path to building wealth. They stayed out of debt. They lived on less than they made. They invested. They didn’t get distracted by what others were buying and doing. And they did those things month after month, year after year . . . until one day they were millionaires. Slow and steady wins the race every time.

So, what about you? Are you willing to put in the work? Will you live below your means? Do you want to develop the patience and determination to invest month after month, year after year? If so, then you can reach your financial goals. You can live the life you want on your terms. It’s all up to you.

And the good news is that you don’t have to do it alone. Our SmartVestor program can connect you with an investment professional who can help you come up with a game plan for your financial future. Your dreams are too important to go it alone! 

Find your SmartVestor Pro today!

This article provides general guidelines about investing topics. Your situation may be unique. To discuss a plan for your situation, connect with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of participating Pros.