Millionaires Expose The Truth About Wealth

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1:03And what they said might completely change how you think about becoming rich.

1:08Brian Preston:Brian, I am so excited because today we're revealing the lies that people believe about wealth, what the truth actually is, and what it means for you and for your money. I'm Brian, he's Beau, and we're two wild and crazy guys who are here to tell you the truth about wealth to help you reach financial independence. With that, let's dive right in.

1:33Brian Preston:So, Brian, this was the question that we laid out. It said, what is the biggest misconception that people have about wealth? And honestly, we got tons of great responses, and many of our clients shared not only a misconception, but also the reality behind what's true about the misconception. Yeah, we're very fortunate. We get to sit in the front row of our millionaire clients and specifically every year ask them what creates wealth. We create content off that, but there's also a section, and you just laid it out, Beau, where we actually ask them an open-ended question of what are the misconceptions, and that's what really has created the content today.

2:10The seven biggest lies that we're fed. Look, I fell prey to this. I grew up in a household, lots of love, lots of hard work, lots of discipline. But the thing that I always heard from my father is you have to be born with it. You have to come from a, you know, have a silver spoon in your mouth. I'm here to tell you, I love that today's show gets to dispel a lot of those lies.

2:32Brian Preston:And you just alluded to the very first lie that we're told about wealth is that you have to be born with it. We actually looked at some of our client responses. This is what they said. The biggest misconception is that acquiring it has to do with luck. You're born into a wealthy family. You receive an inheritance that on sacrifice, hard work, discipline, calculated risk-taking, and responsible decision-making. It's more on the luck stuff and less on what you do. Or how about this one? That it can only be achieved by lucky situations or generational legacy. Yeah, and that leads to, well, hey, if this is what we're being fed, that's a lie.

3:12What's the reality? And this is one of those stat points that I remember when I read, personally for myself, I read Millionaire Next Door. And I was like, whoa, it looks like the actual reality is that a lot of these wealthy people are first generation just like me. And then I can remember when I was working my first public accounting job and started doing tax returns, I remember calling my dad. and be like, dad, a lot of these people are small business owners. Are they working this? You wouldn't believe what these people pay in taxes. You wouldn't believe in what... I felt like I had had the window or curtain opened.

3:49And that's what we're here to share is because there's a lot of stats like of millionaire next door that show that this is first generation behavior.

3:57Brian Preston:Yeah. Most millionaires are self-made and this is not a new phenomenon. If we look at a number of studies that were done, we can go all the way back to 1892, and there was a study of millionaires that found that 84 % of millionaires, or millionaire equivalent in 1892, were self-made. Or 1996, when The Millionaire Next Door came out, 80 % of millionaires were first generation. In 2019, with the Ramsey survey of millionaires, 79 % of millionaires are first generation. And even in our own Money Guy Abound Wealth client survey, we found that 75 % of our respondents are also first generation. So it must be true that in order to be wealthy, you don't have to be born with it.

4:41Brian Preston:You don't have to get an inheritance. You don't have to get lucky. There must be something else to it. Well, and look, we've shared this stat before. And usually it gets us lots of engagement in the comments section because people just don't like hearing that stat. I actually looked at it as liberating and is actually coming from humble beginnings. You came from humble beginnings. That stat empowered me. But for some reason, some people get upset about it. And I'm here to, for all of you who are like, no, the system's stacked against you. This next stat will kind of bring it all back around because there's no way that that stat, that 80 % of millionaires are first generation can be true without this second one.

5:19Because if you are somebody who comes from money, this should be cold water and scare the heck out of you. because 70 % of wealthy families lose their wealth by second generation. 90 % lose it by third generation.

5:34Brian Preston:So if you do happen to be one of those people that is born into an affluent family or does receive some sort of inheritance, don't squander it because that's what a lot of your peers are doing. It's because the second and third generations are not going with their resources is why the first generation has to keep doing it over and over and over again. We sit in the place where we believe whether you come from money or whether you don't come from money, achieving financial independence and building wealth is attainable, but it's not going to happen automatically. You have to be an agent for your own future financial security.

6:12Brian Preston:Let's talk about law number two. This is one where, look, there's a little sliver that this has something to it. but a lot of people believe the lie that money buys happiness. And look, we're gonna put some meat on this bone, but a lot of people think if I can just have a million dollars or I can have$3 million, a goal number out here of X, that they're going to be happy, there's obviously more to it than that. Yeah, this is what our clients said. Listen to these responses. The biggest misconception is that a dollar amount when reached will solve all of your problems. Or how about this? It doesn't solve all your problems or make you happy, or it won't change your level of happiness.

6:56Brian Preston:It will just amplify your current personality. The money that you have or that you receive or that you build really just makes you more of who you already are. Yet, even though that's true, even though there's not a goal number, we have clients who've reached financial success that will exclaim that that's not the case. the average American right now, if you were to ask them, believes that in order to be happy, in order to classify yourself as a happy person, you would need to earn over$284 ,000 a year in annual income. Look, that's disconnected because that's three times the median income that puts you in the top 3 % of people of what they make.

7:40So that's obviously disconnected. So let's kind of pivot and let's talk about what's the truth. And the reality is, is money is nothing more than just a tool.

7:51Brian Preston:You won't find happiness in a specific dollar amount earned or a specific amount invested, but the money can help you do things that will bring you happiness. And what are some of the things that do bring happiness? Well, one, and we talk about this all the time, are experiences over possessions, creating memories and doing things and activities and having things you can take with you are oftentimes way more valuable than the things or the items that you can spend your money on. So experiences over possessions, obviously time with the family is gonna be more important. And I just gave away the second one is because we want you to have those experiences with key people that actually bring happiness and fulfillment to you.

8:34Typically that is your friends, that's your family. Make sure you're making blossoming memories with these awesome people.

8:41Brian Preston:So obviously it's the people you spend time around, but it's also the work that you do. The study found that giving back or pouring into the community around you, pouring into other folks around you is a great way for you to experience happiness or figuring out how you can engage in work that you're passionate about, whether that be the vocation that you do, the job that you do every day, or maybe it's the thing that you volunteer for, the thing that you do on the side, the thing that you do in the margin. if you can find fulfillment in the way that you're spending your time, it's a lot more likely that you're going to be a happy person.

9:15And I want you to be purposeful on how you structure your life. And look, there's a lot of research on happiness that if you're setting yourself up for long things, I know this sounds ridiculous, but it's true. Commutes. If you can have a longer, if you have a long commute, there's a lot of people that you think in the short term that won't cause a problem, but in the long term, it probably can. So pay attention to how you're structuring your life. And then I like this last point just to kind of bring, close this loop is can you get outside of yourself? Spiritual fulfillment. Are you doing, are you thinking bigger than yourself?

9:51This kind of gets back to the giving because I also think that you always hear the adage, it's better to give than to receive. But also, if you can be a person that's spiritually based, meaning you're thinking about how do I build a life that's bigger than me? I think it really brings in the engaging and passion work, giving back, but also understanding that, look, I need to be a good person. Money is not just about what I can buy or what I can do with this. It's about how do I live the best version of myself.

10:21Brian Preston:All right, bro, we're talking about seven lies about wealth or misconceptions. And lie number three is one that I think society has forced upon us. And it's this idea that you can see wealth. Oh, if someone is wealthy, it is ultimately going to be visible. Listen to some of these responses that our clients gave when we asked them about misconceptions. The biggest misconception is that you can see wealth. Many people who look, quote, rich are not wealthy. And most people that I know that actually are wealthy don't look rich. Or what about this one? People know that we're comfortable, but they would have no idea were multi-millionaires.

11:00Brian Preston:Or you cannot see wealth because wealth is built from the dollars that you don't spend, not the dollars that you do spend. And that's why I love that we get to share the truth. Real wealth whispers. We often talk about stealth wealth. It's one of those things is that being rich is so much better than just looking rich. Yeah, oftentimes, I try to tell my kids this, whenever they see someone who has a really fancy car or a really nice house. Like, oh, daddy, so-and-so must be rich. I'm like, baby, they may or may not be. But oftentimes when you see those things, you are not seeing a representation of how much money someone has.

11:36Brian Preston:You are seeing a representation of how much money someone has spent. And how much someone has spent is not reflective of what they have. And I think society and the Instagram real world that we live in is telling us a very, very different thing. Look, I've been around the block for a while. And I can remember back in the mid nineties when Millionaire Next Door came on the scene And one of the headlines that came out of that book that seemed like it was on the nightly news and made their rounds with all the entire news cycle was that most millionaires drive Ford F-150s. F-150, that's right. You know, and that's because that was the worker truck of the small business owner.

12:09Well, we'll take it even a step further. The study from Experian said that 61 % of households making more than$250 ,000 a year don't drive luxury brands. Instead, they drive less showy cars like Hondas, Toyotas, and Fords. So this is something that I think is really valuable is that those who have it don't feel like they have to flex with the whip.

12:31Brian Preston:And so what do people, why do people do that? What's the reason why people try to show their wealth? Well, obviously it's so that they give off the perception of being wealthy. So if you truly wanna be a financial mutant, you need to recognize that, man, I don't need to try to keep up with the Joneses because there's a really good chance that the Joneses are broke. So I wanna be careful spending money on things that I don't care about to impress people whose opinions don't matter. If you can figure out what it is that you enjoy, what it is that you value, what it is that you want to spend your dollars on, you're going to find it's likely not gonna be the things that are showy and impressive to other people, but it's gonna be the things that actually matter to you.

13:12Well, and I still want people to spend time on happiness by bedazzling your basic life. Don't mishear us. We're not saying don't do vacations, don't drive a reliable transportation. we just want it all to be purposeful. I want you to kind of, when I say bedazzle your basic life, I still want you to go on trips, make memories, do all those things that we talked about that are kind of indicators that work towards happiness, like time with family, being purposeful with your time and what you're here for. But it's just that you understand the value of your money and so you don't have regrets. So when you're in your 50s and 60s, you still look back and go, yeah, I did it right in my 20s.

13:49Yeah, I did it right in my 30s. Yeah, I did it right in my 40s. and I knew how to take and turn a little bit into a lot so I could have my great big beautiful tomorrow.

13:57Brian Preston:All right, so wealth is not something that often should be seen. Another thing is we shouldn't let our wealth affect our mindset or the way that we think because lie number four is that having wealth or being wealthy makes you superior to others. Listen to what our client said. The biggest misconception is that there's a moral component associated with wealth, that wealthy people are somehow more trustworthy and those without money have a moral deficit and can't be trusted. Or how about this one? Having a lot of money does not mean that you're a better person than regular folks. The public tends to glorify the wealthy as heroes to be followed, when in truth, they are just regular human beings with the same flaws as all the rest of us.

14:45You know, I go on these walking meetings with friends and other entrepreneurs viewers and others, because I love going on walks. And a mutual friend of ours, another business owner, we were on a walk not too long ago, and we had a conversation. And we were like, people over$100 million, how many of them can we say are great people? And I'll be honest, there were some people we came up with, but there's a lot more that you see, broken households, you see just not the greatest versions of what you expect out of humankind. And I think there's something to that. Look, we think that money is obviously a very important tool, but it is, and it makes the key point that your wealth is not your worth.

15:32And it's something that I think everybody needs to be mindful of that this is just a tool.

15:37Brian Preston:Wealth or being wealthy does not define you or the kind of person you are. What it most likely is, is wealth is a reflection of wise, inconsistent choices made over a lifetime. We do an annual survey where we ask our clients, we say, hey, how did you achieve your wealth? What was the thing that brought you to it? What was the thing that allowed you to be wealthy? And 76%, three out of four of our clients said that they were able to reach their very first million dollars, not by being better than someone else at something, not by being a virtuoso, not by climbing the corporate ladder and being a top C-suite executive, but simply by saving and investing, exhibiting consistent saving behavior, living on less than they make, building up wealth.

16:25Brian Preston:So being wealthy is not a function of you are a better person, a more moral person, a more smart person. It's really a reflection of, hey, I was willing to make consistent decisions to arrive at the financial circumstance I'm at right now. Well, I also, I want to create this as something that's an encouraging stat as well, is that I think a lot of us, we look at ourselves and go, are we that special? You know, and when I see a stat like this is that 76.4 % were just savers and investors. They took small decisions, small good decisions, and just did it consistently over and over again. So you don't have to be the virtuoso.

17:00You don't have to be the senior executive. You don't have to be this dreamer slash entrepreneur. you can do this with just good common sense and good decisions.

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18:12Brian Preston:Money doesn't change who you are. It merely unmasks you. If a man is naturally selfish or arrogant or greedy, all that happens when they have money is the money brings that out. It amplifies who you are. So whether you are wealthy as you're sitting here today or whether you're not wealthy, it's worth self-reflecting. Okay, what kind of person do I want to be? And if I'm able to have more wealth, if I'm able to build up the financial coffers, will I be better able to lean in to being the kind of person that I want to be? Well, I think it's an amplifier. You know, this is one of those things I talk about in Millionaire Mission is that I think that all money does is really amplifies who you are.

18:56It's once again, why going back to that list of what creates happiness and fulfillment, are you a generous heart? Because that's gonna get you outside of, where's your spirituality? Where's the, those type of things, the whys of who we are as people is gonna keep you from getting into the greedy stuff and thinking you're better than somebody else. There's a better way to do money.

19:19Brian Preston:All right, Brian, we're talking about lies or misconceptions about wealth. Now, this next one is really interesting, because this is a lie about what's required. There's this common idea out there that if you want to be wealthy, not only would you have needed to inherit it or not only would you need to have wealthy parents, but if that was not the case, the only way for you to get there is that you must have a high salary. You need a very large shovel in order to build wealth. But listen to what our client said. The biggest misconception is you have to have a high salary to build wealth. This particular client made$60 ,000 as a starting salary in their 20s, yet they were still able to build hundreds of thousands of dollars in liquid net worth at that salary through smart and wise investing.

20:06Brian Preston:Another client said, sure, income helps, but most importantly, it's based on the behavior of starting early and being consistent over a long period of time. Or most people can outspend any amount of income if they don't have discipline to save and invest. And Brian, we've seen this. We have seen folks who make millions and millions of dollars a year in annual income, and yet they are still broke because they've not figured out the key to actually building a life. Yeah, money is only a part of the recipe. And what do I mean by that is that, guys, anybody who's hung out with us for any amount of time, you know we talk about it often, is that there are three ingredients to wealth creation.