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Bosiljčić igor lecture - an average american millionaire


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  • 1. ¢ 1
  • 2. In what king of World are we living in?There are around 6.4 billion people in the Worldtoday, and every second our number increases by3.2.1/3 of the world’s population or 2.2 billion isliving with less than 1 dollar a day.1/3 of the world’s population has never used atelephone.1 billion people don’t have access to cleandrinking water, which causes 500,000,000 people toget sick with diseases that have been eradicatedcenturies ago in western countries.800,000,000 people don’t have enough food,among which are 300,000,000 children. 50,000children go blind every year because they don’thave enough vitamin A in their diet.84% of all the world’s wealth is owned by only 20%of the population.The world’s 200 richest people own almost10% of the World, and are increasing their wealthby 500 US dollars per second. 2
  • 3. Every second 10 – 15 plant or animal species 2disappear. 3,610m of rain forest is cut every sec.40,000,000 people are currently HIV positiveIn the year 2000.a meteor hit the Pacific with animpact force of 4 hydrogen bombs. It takesonly 5 to 6 hydrogen bombs to kill 90% of France’spopulation. Every 4 to 4.5 thousand years a meteor,which can destroy New York, hits the Earth. Every19 million years a meteor hits the Earth anddestroys 80-90% of all plants and animals.In about 50,000 years we will enter an ice age.Half of the World’s surface will be covered in ice.The Moon is getting further from the Earth everyyear by 4-5 centimeters. In 400 000 years the Moonwill be so far away that it wouldn’t be able to causesufficient tides, and this alone will kill 90% of sealife. Don’t forget it is the Moon’s periodicalinteraction with Earth that caused first organicmolecules to become self-producing 3.5 billionyears ago thus igniting life on Earth.The mathematical probability that thereare no other life forms in space but our own is 0%.Petrified worm-like bacteria have been found onMars.The Sun will cease to exist in 5 billion years. 3
  • 4. There are 1500-2000 billionaires in the world.There are 200-250 millionmillionaires in the World or3- 4% of overall population.Who is a millionaire? A millionaire is a person whose net worth is above 1 million-dollar line.The richest 7% of the populationown more than ½of the World. 4
  • 5. The average American Millionaire: I am a fifty-seven-year-old male, married with three children. About 70% of us earn 80% or more of our household’s income. About one in five of us is retired. About two-thirds of us who are working are self-employed. Self-employed people make up less than 20% of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs. Most of the others are self-employed professionals, such as doctors and accountants. Many of the types of businesses we are in could be classified as dull-normal. We are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors. About half of our wives do not work outside the home. The number one occupation for those wives who do work is teacher. Our household’s total realized (taxable) income is $131,000 (median, or 50th percentile). 5
  • 6. The average American Millionaire: Those of us who have incomes in the $500,000 to $999,999 category represent 8% of all millionaires, while those who fall into $1 million or more category represent 5% of all millionaires or only 0.175% of the total population. The typical (median or 50th percentile) millionaire household has a net worth of $1.6 million. On average, our total annual realized income is less than 7% of our wealth. In other words, we live on less than 7% of our wealth. Most of us (97%) are homeowners. We live in homes currently valued at an average of $320,000. About half of us have occupied the same home for more than 20 years. Thus, we have enjoyed significant increases in the value of our homes. About 80 percent of us are first-generation affluent. We live well below our means. We wear inexpensive suits and second-hand clothes and drive American made 10 year-old cars. Only minority of us drive the current-model year automobile. Only a minority ever lease our cars. 6
  • 7. The average American Millionaire: Most of our wives are planners and meticulous budgeters. Well above 90% of us keep day-to-day expenses. We note everything, even the price of bubble gum bought on a gas station. We have a “go-to-hell fund”. In other words, we have accumulated enough wealth to live without working for ten, fifteen or more years. Thus, those of us with a net worth of $1.6 million could live comfortably for more than 12 years. Throughout our lives we saved at least 20% of our earned income and invested it wisely. Actually those of us who used to live in cockroach infested buildings when they were young saved more than 30% of their income. 65% of us at some point in our lives have lived more than couple of months on bread and water alone to be able to save enough to invest. We are educated. 20% of us are not college graduates. Many of us hold advanced degrees. 18% have master’s degrees, 8% law degrees, 6% medical degrees and 6 % Ph.D.s. 7
  • 8. The average American Millionaire: Only 17% of us or our spouses ever attended a private elementary or private high school. But 55% of our children are currently attending or have attended private schools. We spend heavily for the education of our offspring. About 2/3 of us work between 45 and 55 hours per week (that is 9 – 11 hours a day). 73% of us calculate our yearly budget, and set wealth-accumulating goals. 79% of us have at least one account with a brokerage company. But we make our own investment decisions. We hold nearly 20% of our household’s wealth in publicly traded socks and mutual funds. But we rarely sell our equity investments. 21% of our household’s wealth is in our private businesses. Fewer than 20% inherited 10% or more of their wealth. 8
  • 9. The average American Millionaire: More than half never received as much as $1 inheritance. Nearly half never received any college tuition from their parents or other relatives. An average millionaire watches just less than 1 hour of TV a day, and even then business channel or family program. Nonmillionaires watch 6 hours of TV a day, while an average citizen of Serbia 5 hours. Almost every millionaire has a detailed daily, weekly and monthly schedule. Almost every millionaire has written down and analyzed his/her month, year and five-year goals. Only 3% of the total population have their goals written in any form. An average millionaire spends at least 3.5 hours a week discussing family issues, finances, choirs, goals with his wife and/or children. Only 11% of all millionaires ware a watch that costs more than 250 dollars. 9
  • 10. The average American Millionaire: At the end of every week millionaires look at their expense notes and find new room for saving money. Millionaires read around 26 books a year. That is one book every two weeks, and that is not including work-related material. Millionaires are meticulous seminar searchers and attendees. And average millionaire will attend at least 2 seminars concerning finances, tax of family life a year. Millionaires save money by wearing second hand clothes, buying groceries in bulk, using the A/C only in summer and only when necessary, not using water heaters during summer, having state of the art heat isolation. Millionaires do not have credit card debt (it has 11- 15% yearly interest rate), while 50% of nonmillionaires have credit card debt. Every millionaire knows precisely what is his/her net worth. 91% of nonmilionmaires can not recall what they spent their money in the last 10 days, let alone knowing their net worth. 10
  • 11. The average American Millionaire: Millionaires make friends with accountants, investment bankers, estate planers, and spend their free time socializing and learning from them. It was mentioned earlier that an average millionaire works from 9 to 11 hours a day. This information can be misleading. Actually when those same millionaires were starting their carriers they used to work 6 days in a week for 80 or 90 hours (13 – 15 hours a day!). Interestingly, the first things they bought, after getting a job, were a sleeping bag and a thermos.NOTE: All the mentioned information is the resultof twelve-year lifestyle research. In the course of morethan a decade 12,487 millionaires answered ourquestions. The research included millionaires of allsocial groups, backgrounds, and races. The studywas mainly concentrated on average millionaires, butpeople who earn 5, 10, or even 20 million dollars ayear were also questioned. This is so far, by far thelargest and most detailed lifestyle study everconducted. 11
  • 12. Different words meaning money or insome other way connected with theterm money.Ackers Informal British term for money. The amount of money that a court ordersAlimony someone to pay regularly to their former wife or husband after their marriage has ended. An amount of money that someone receivesAllowance regularly, which they do not earn by working. American street name for money, usuallyAmmo associated with drug traffickers All the money and property which a company orAssets person owns, and which they sell or use if necessary. An informal British meaning a small amount of money paid to someone to persuade them to doBackhander something that is dishonest but usually not very seriousBad boys Informal American term, meaning large notes.Beans Informal American term for money Money that people receive from the government ifBenefit they have no job, do not earn a lot, or are sick. Informal American term for money. BenjaminBenjamins Franklin can be found on a 100$ note.Big boys Informal American term, meaning large notes.Bones Informal British term for money.Brass Informal British word, meaning cash.Bread Informal British word, meaning cash. Money paid to someone in an official position inBribe order to persuade them to do something dishonest.Buck Informal American word, meaning cash.Bung Informal British term for bribe.C – note 100$ note 12
  • 13. Different words meaning money or insome other way connected with theterm money. Informal British term for money, but also meansCabbage that you have saved a certain amount of money. A large amount of money that can be used to startCapital a new business of business activity and from which you may at some time receive profit. Informal American term. A big stack of money,Captain named Captain Crunch after a very popular cerealCrunch that can be found in very big boxes.Cash Money in the form of coins and notes.Cent = 1/100 dollar.Century 100 dollar or pound note.Change Money in form of coinsChinkey, Informal word meaning money in coins, or veryChinkie, small amounts of money.Chinky Informal American term for money, meaning that somebody has so much money and whatever theCholesterol amount he/she spends the money just keeps coming. Informal American term for money, usually inClams cash.Crisps Money in form of notes, but newly printed Informal word meaning money in coins, or veryCrumbs small amounts of money. The particular type of money that is used in aCurrency country or to buy goods and services from that country. An informal American term. Money in form ofDead notes. American dollars have pictures of formerpresidents US presidents.Dibs Informal British term for money. 13
  • 14. Different words meaning money or insome other way connected with theterm money. = 10 cents, but it also means small amount ofDime money. An informal American term. Money in from ofDo–Re–Me notes. This term is usual in broader New York area.Doddle Informal British term for money.Dosh An informal British word meaning money. An informal word meaning money, especially a lotDough of money. A term associated with giving or taking a bribe,Envelope meaning money in an envelope. An informal American term. Money in form ofFeathers notes. Especially when there is a lot of money in a big pile.Figure A stated amount of money. All the money that a person, company, organization etc owns, especially when it isFinances regularly checked so they know about any changes in it.Fortune Informal expression meaning a lot of money. A large sum of money that is collected and keptFund especially so that it can be used by a particular group of people who need it. An American informal term, usually used whenGees meaning a lot of money, especially thousands of dollars. All the money that someone receives regularly, forIncome example from their job, form their savings or from the government. The money that people or organizations have toInvestment put into a company, business or bank in order to make a profit. 14
  • 15. Different words meaning money or insome other way connected with theterm money. A large amount of money paid to someone in a high position in a company or government, inKickback exchange for dishonestly arranging a business deal.Kitty A sum of money that is put in gambling. Informal American term, meaning hundreds orLarge ones thousands or millions of dollars.Lettuce An informal term, meaning money. Money that is paid regularly by someone to theirMaintenance former wife or husband in order to support their children. All the money that you own, especially if it isMeans enough for everything that you need. Informal American term especially used whenMount needed to emphasize the number of differentRushmore notes amounting to a lot of money.Mullah An informal term for money. = 5 cents, but it also means small amount ofNickel money.Pees in a An informal term, meaning that all the money is inpot its place. An amount of money that old people receive regularly from the government, their formerPension employer, or an insurance company after paying in money over many years.Pocket A small amount of money that children receivemoney from their parents every week. An amount of money paid to the insurancePremium company. All the money, property, or goods that a company,Resources organiyation, or country owns and that can be used to make more money or to provide services. 15
  • 16. Different words meaning money or insome other way connected with theterm money. The money which you have saved, which isSavings usually kept in a bank or some other financial institution. Informal American term for money, usually inSmackarouse cash. Money that is provided by a company or by the government to pay for someone to do somethingSponsorship or pay for something such as a sports event, art show, etc. An amount of money provided by the governmentSubsidy to reduce the cost of something. An American informal term. Usually used bySugar prostitutes. An amount of money, especially when the exactSum amount is not stated. British informal term used when you want toTea and emphasize that there is couple of large notes andbiscuits a lot of coins (change).The The money that you need in order to dowherewithal something or pay for something. An expression meaning a large amount of money,Tidy sum used especially when you are pleased of surprised about it. A small amount of money that someone leaves when paying the restaurant, café… bill. It isTip usually 10 – 15% of the amount that has to be paid. An amount of money that you receive on a weeklyWage or monthly basis from the company you work for. An American word meaning the money that is paidWelfare by the government to people without jobs. 16