Quiz | February 2013

Do You Have What It Takes to Be a Millionaire?

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Having a million bucks these days isn’t as rare as you might think. In fact, according to Phoenix Marketing International, a firm that tracks the affluent market, more than 5% of U.S. households have investable assets of $1 million or more.

That's only one way to measure if someone's a millionaire, of course. A net worth of $1 million also qualifies; subtract liabilities, including mortgages and car loans, from assets, including home equity and retirement savings, to determine your net worth. Either way, hitting the million-dollar mark is no small feat.

Do you have what it takes to be a millionaire – and will you know how to live the good life when you become one? Take our quiz to find out the (often surprising) answers.

Quiz

Do You Have What It Takes to Be a Millionaire?

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Question 1 of 10

As a child, you never summered in Martha's Vineyard or shipped off to boarding school. Do you stand much chance of making millions if your parents aren't rich?

A. No. The majority of U.S. millionaires come from money.
B. Yes. Most U.S. millionaires are self-made.

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Quiz

Do You Have What It Takes to Be a Millionaire?

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Question 1 of 10

As a child, you never summered in Martha's Vineyard or shipped off to boarding school. Do you stand much chance of making millions if your parents aren't rich?

You're right! B. Yes. Most U.S. millionaires are self-made. is correct.

Sorry, wrong! is incorrect.

The right answer is B. Yes. Most U.S. millionaires are self-made..

Just like the fictitious Jay Gatsby, Edmond Dantes and the protagonists of virtually every Horatio Alger novel, the vast majority of real Americans with a net worth of at least $1 million were not born rich. In fact, only 20% inherited their money, according to Thomas J. Stanley's "The Millionaire Next Door," and a mere 14% would call their parents wealthy.

Among the nouveau riche: Radio One founder Catherine Hughes, a teenage mom and college drop-out; Tastefully Simple CEO Jill Blashack Strahan, who grew up on a farm; and entrepreneur Ali Brown, who had less than $20 in her bank account when she launched her first marketing company in 1998. Search keyword “millionaires” on Kiplinger.com to read their rags-to-riches stories.

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Do You Have What It Takes to Be a Millionaire?

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Question 2 of 10

You have an advanced degree in some high-powered field, such as medicine or law. Does that degree mean you're more likely to be a millionaire?

A. Yes. Most millionaires have graduate degrees or better.
B. No. Most millionaires stopped way short of a PhD.

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Quiz

Do You Have What It Takes to Be a Millionaire?

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Question 2 of 10

You have an advanced degree in some high-powered field, such as medicine or law. Does that degree mean you're more likely to be a millionaire?

You're right! B. No. Most millionaires stopped way short of a PhD. is correct.

Sorry, wrong! is incorrect.

The right answer is B. No. Most millionaires stopped way short of a PhD..

With condolences to those with grad school debt, an advanced degree does improve your chances of higher lifetime income, but it doesn't much improve your chances of joining the millionaires' club. Only 18% of those with a net worth of $1 million or more hold a master's degree, while 5% have law degrees and a mere 3% went to medical school.

Ninety percent of millionaires do have an undergraduate degree, even if they didn't stick around for their MA or PhD. And don’t get us wrong: Many graduate degrees are worth the effort. Someone with an MA earns $73,738 a year, on average, versus $56,665 for the average four-year college graduate.

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Quiz

Do You Have What It Takes to Be a Millionaire?

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Question 3 of 10

Millionaire math quiz: Which savings strategy will get you to $1 million in the bank by retirement age, assuming 8% annualized returns?

A. Save $200 a month, starting at age 20.
B. Save $400 a month, starting at 30.
C. Save $800 a month, starting at 40.
D. Save $1,500 a month, starting at 50.

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Do You Have What It Takes to Be a Millionaire?

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Question 3 of 10

Millionaire math quiz: Which savings strategy will get you to $1 million in the bank by retirement age, assuming 8% annualized returns?

You're right! A. Save $200 a month, starting at age 20. is correct.

Sorry, wrong! is incorrect.

The right answer is A. Save $200 a month, starting at age 20..

Behold the magic of compounding! A 20-year-old who saves $200 a month until retirement would have around $1,055,000 at age 65--not bad for less than the cost of a monthly pizza tab in some households. If you wait until age 30 and kick in $400 a month, that number drops to about $918,000. A 50-year-old contributing $1,500 a month would have only $519,000 by retirement.

Wealth creation lies in compounding. Each year, your money can earn interest on both the original amount and the interest earned from the year before. More years equals more interest, and more interest means faster asset growth and an easier path to $1 million.

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Do You Have What It Takes to Be a Millionaire?

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Question 4 of 10

You know your way around stocks and bonds, but you aren't exactly the next Warren Buffett. Do most millionaires rank with the pro investors?

A. Yes. Most millionaires know a lot about investing.
B. No. When it comes to investing, most millionaires still have a lot to learn.

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Do You Have What It Takes to Be a Millionaire?

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Question 4 of 10

You know your way around stocks and bonds, but you aren't exactly the next Warren Buffett. Do most millionaires rank with the pro investors?

You're right! B. No. When it comes to investing, most millionaires still have a lot to learn. is correct.

Sorry, wrong! is incorrect.

The right answer is B. No. When it comes to investing, most millionaires still have a lot to learn..

You don't have to study finance or memorize stock tables to make a million. In fact, more than 60% of millionaires say they have a "great deal” to learn about investing, according to the Spectrem Group, a consulting firm that specializes in wealth research and management. This should give some comfort to those of us with index funds and "Investing for Dummies" books.

Despite that lack of expertise, millionaires do invest -- a whopping $39,300 a year, on average. If that number seems hefty, don't panic. History shows you can still expect even small market investments to grow over time, meaning even $3,900 a year will add up.

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Do You Have What It Takes to Be a Millionaire?

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Question 5 of 10

True or false: There are more households in the U.S. with $1 million in investable assets now than there were in 2006, before the Great Recession hit?

A. True.
B. False.
C. Neither. The number of millionaires hasn't really changed.

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Do You Have What It Takes to Be a Millionaire?

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Question 5 of 10

True or false: There are more households in the U.S. with $1 million in investable assets now than there were in 2006, before the Great Recession hit?

You're right! A. True. is correct.

Sorry, wrong! is incorrect.

The right answer is A. True..

The Occupy crowd may call them the one percent, but the U.S. actually saw a net gain in millionaire households between 2006 and 2011, despite the down economy. There are some 5,936,000 households with at least $1 million in investable assets, up 10% from before the Great Recession, according to Phoenix Marketing International.

What explains the growth? It's not like millionaires avoided the downturn altogether. In fact, their numbers fell sharply between 2007 and 2009. Instead, the fate of millionaires tracks the S&P 500 closely. When the stock index falls, millionaires see their wealth decline. When stocks recover, their portfolios do, too.

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Do You Have What It Takes to Be a Millionaire?

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Question 6 of 10

You have a good but not high-paying job – let's say, for instance, that you write quizzes on the Internet. Forget about ever becoming a millionaire, right?

A. Yes. Most millionaires have glamorous, high-level management jobs.
B. No. Millionaires hail from across the job spectrum.

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Do You Have What It Takes to Be a Millionaire?

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Question 6 of 10

You have a good but not high-paying job – let's say, for instance, that you write quizzes on the Internet. Forget about ever becoming a millionaire, right?

You're right! B. No. Millionaires hail from across the job spectrum. is correct.

Sorry, wrong! is incorrect.

The right answer is B. No. Millionaires hail from across the job spectrum..

Sure, 17% of people with a net worth of $1 million-plus are managers – but 12% work in education, according to the Spectrem Group. In fact, an astounding 20% of millionaires work in jobs that we typically don't consider lucrative, such as teaching, accounting and sales. Roughly half own small businesses or work for themselves. What’s important is starting to save early and continuing to save over time.

It's even possible to make a million on a meager wage. Take the case of Paul Navone, who never earned more than $11 an hour as a quality-control inspector at a glass plant. By age 78, he'd accumulated more than $3 million, thanks to unwavering discipline and sound investments. To read his story, go to Kiplinger.com and search for "Paul Navone."

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Do You Have What It Takes to Be a Millionaire?

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Question 7 of 10

Millionaire math quiz, part two: If you're 45 and have no savings, how much will you need to put away each month in order to retire with a cool million (assuming 8% average annual returns)?

A. $700
B. $1,700
C. $7,000
D. $17,000

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Do You Have What It Takes to Be a Millionaire?

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Question 7 of 10

Millionaire math quiz, part two: If you're 45 and have no savings, how much will you need to put away each month in order to retire with a cool million (assuming 8% average annual returns)?

You're right! B. $1,700 is correct.

Sorry, wrong! is incorrect.

The right answer is B. $1,700.

It's never too late to make a million, but it takes more money as you age. The longer you wait, the steeper the climb. Compare our 45-year-old, who will need to save $20,400 a year to hit $1 million by age 65, with a 25-year-old, who will need to save $3,445 a year to reach the same mark.

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Do You Have What It Takes to Be a Millionaire?

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Question 8 of 10

You want to learn from the habits of as many wealthy neighbors as possible. Where would you move if you wanted to rub elbows with the highest concentration of fellow millionaires?

A. New York City
B. Washington, D.C.
C. Orange County, Calif.
D. Los Alamos, N.M.

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Do You Have What It Takes to Be a Millionaire?

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Question 8 of 10

You want to learn from the habits of as many wealthy neighbors as possible. Where would you move if you wanted to rub elbows with the highest concentration of fellow millionaires?

You're right! D. Los Alamos, N.M. is correct.

Sorry, wrong! is incorrect.

The right answer is D. Los Alamos, N.M..

It might lack the wide drives, showy mansions and name recognition of the O.C., but Los Alamos boasts more millionaires per capita than any other place in the country. Nearly 12% of all households there have $1 million in investable assets, according to Phoenix Marketing International.

When it comes to sheer numbers of millionaires, New York is tops. Some 448,000 big apples live in the Big Apple, or 4.5% of all households. Other moneyed hot spots include Naples, Fla. (9.1% of households), Bridgeport, Conn. (8.8%) and Washington, D.C. (8.5%). Fans of Bravo's "Millionaire Matchmaker" may well wonder how the show succeeds in comparatively millionaire-light L.A.

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Do You Have What It Takes to Be a Millionaire?

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Question 9 of 10

Once you've made your million, there’s no reason to keep working, right?

A. Right. The majority of millionaires are retirees.
B. Wrong. The majority of millionaires still work for a living.

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Do You Have What It Takes to Be a Millionaire?

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Question 9 of 10

Once you've made your million, there’s no reason to keep working, right?

You're right! B. Wrong. The majority of millionaires still work for a living. is correct.

Sorry, wrong! is incorrect.

The right answer is B. Wrong. The majority of millionaires still work for a living..

Only 20% of millionaires have retired. Just because you’re a millionaire doesn’t mean you don’t have money worries. More than half of the millionaires surveyed by the Spectrem Group fret about the potential impact of health catastrophes and rising college costs on their nest eggs. And of the would-be millionaires with net worths between $100,000 and $1 million, 63% fear they won't have enough money set aside for retirement. To calculate how much you'll need to retire, go to Kiplinger.com and search for "Retirement Savings Calculator."

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Do You Have What It Takes to Be a Millionaire?

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Question 10 of 10

Finally, let's say you make $74,000 a year, roughly the income of the average college professor, according to the U.S. Bureau of Labor Statistics. Would you be happier if you made $1 million a year?

A. Definitely. Think how many overseas vacations that could buy!
B. Probably not. Studies show that even $1 million doesn’t buy happiness.

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Do You Have What It Takes to Be a Millionaire?

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Question 10 of 10

Finally, let's say you make $74,000 a year, roughly the income of the average college professor, according to the U.S. Bureau of Labor Statistics. Would you be happier if you made $1 million a year?

You're right! B. Probably not. Studies show that even $1 million doesn’t buy happiness. is correct.

Sorry, wrong! is incorrect.

The right answer is B. Probably not. Studies show that even $1 million doesn’t buy happiness..

Money can't buy love, and it can't buy contentment either – or so says a 2010 study out of Princeton University. The report found that people generally get happier as they make more money, at least until they hit the $75,000 mark. At that point, things level off.

A higher income did impact participants' overall evaluation of their lives, however. Someone taking home $300,000 a year will feel more successful and secure than someone making minimum wage. But on a day-to-day basis, at least, a college teacher making $74,000 a year should feel just as happy as a high-paid chancellor.

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Do You Have What It Takes to Be a Millionaire?

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Quiz | February 2013

Do You Have What It Takes to Be a Millionaire?

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Do You Have What It Takes to Be a Millionaire?

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Do You Have What It Takes to Be a Millionaire?

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