Many people aspire to become millionaires but don’t know how to go about it. One way to become a millionaire is by following the steps of those who have already achieved the status.
A majority of millionaires are investors and entrepreneurs. Wealthy people know how to identify investment and business opportunities and how to make good use of them.
We have sampled a majority of the world's millionaires and we are going to share with you how they made their money.
How Did Most Millionaires Make Their Money?
After researching how wealthy people became rich, the following are some of the most common ways millionaires make their money.
1. Starting their Own Businesses
A majority of millionaires make money through entrepreneurship. Wealthy people look for opportunities and market gaps and then start to develop successful products and services. Millionaires are risk-takers and are not afraid to start a business they believe in.
Some of the highly successful people and billionaires include Bernard Arnault who owns LVMH; a luxury fashion brand, Mark Zuckerberg who started Facebook and Meta platforms. Other entrepreneurs include Elon Musk the CEO and founder of Tesla and SpaceX respectively. The above millionaires have made their money from businesses they started and own to date.
2. Investing in Stocks
The other way millionaires make their money is by investing in the stock market. Millionaires invest in securities with great potential whose value increases with time. Some of the most common securities among millionaires include stocks, bonds, mutual funds, ETFs, and other investment vehicles.
For example, billionaire Warren Buffett is known to be the best investor in the world. He identifies stocks that are undervalued but have the potential to grow and buys them. With time, the value of those stocks increases while they also give him returns through dividends.
While a majority of millionaires are self-made through investments and starting their own businesses, some millionaires make their money through inheritances. These millionaires inherit wealth and properties from their family members.
Some of the wealthy people who inherited some part of their wealth from family members include Mukesh Ambani who took over Reliance Industries after the death of his father, and Alice Walton who inherited her fortune in Walmart from his father; Sam Walton.
4. Real Estate
Some millionaires also make money through real estate. A majority of wealthy people invest in real estate either through buying and selling properties or developing and managing own properties.
Millionaires make money from commercial and residential properties by renting them out. Others make money by investing in Real Estate Investment Trusts (REITs). They all generate investors a steady stream of income while these assets also appreciate.
Some billionaires are known to own private islands where they build resorts where people can go on vacations. Some of the wealthy people who have invested heavily in real estate include Donald Bren, Lee Shau Kee, and Stephen Ross.
5. High Paying Careers and Executive Jobs
While a majority of millionaires have made their money by owning businesses, some have made money by holding high executive positions. They have worked hard to climb the corporate ladder to hold high executive positions. Some have also pursued high paying professional careers such as doctors, lawyers, and engineers.
Some of the wealthy people who have made their money from high paying careers include Sundar Pichai, Google’s CEO, Steve Ballmer, former Microsoft CEO, Tim Cook; Apple’s CEO and Elon Musk, Tesla’s CEO.
Also read: What makes you a millionaire?
How Do Billionaires Make their Money?
Just like millionaires, billionaires make their money the same way through investing in stocks, owning businesses, and holding executive jobs.
How Do Millionaires Make their First Million?
Most millionaires make their first million through a combination of the above. To sum it up in one word, millionaires make their money through investing.
Some start their own businesses and invest in securities, and real estate while others hold executive jobs like CEOs. A few others make their first million through inheritance.
Summary of How Millionaires Make Money
A majority of millionaires are self-made and have made their money through investments such as securities and owning their own businesses. Statistics show that 67.7% of millionaires are self-made while 8.5% inherited their wealth. A majority of millionaires made their wealth by owning highly successful businesses.