Millionaires' Homes and Cars: The Reality vs. Perceptions

74% of millionaires live in homes valued under $1 million, most taking mortgages with less than 20% down payment.

### The Real Lives of Millionaires: Home Ownership and Car Purchases
* 🏡  Contrary to popular belief, most millionaires do not live in multi-million dollar homes in high-cost areas like Los Angeles or New York City. In fact, **74% of millionaires have homes valued at less than a million dollars**.
* 📉 " Only **1% of millionaires live in homes greater than $5 million**." The reality is that the "**Millionaire Next Door**" lifestyle is more common among millionaires in America.
* 🏠  When it comes to buying homes, the majority of millionaires take out mortgages, especially on their first home. **31% put down less than 5% as the down payment**.
* 🚗  The perception that millionaires **lease their cars and drive luxury vehicles** is not accurate. The reality is that most millionaires **own their cars and keep them for at least seven years**.
* 💰  65% of millionaires pay cash for their cars. However, when they were starting out, **71% of them financed their first cars**.
* 📈 " Use **238 to your benefit** and don't feel guilty" if you can't pay cash for a car or save up for a 20% down payment on a home. It's important to **focus on building wealth over time**.

[Music] all BR we talked a little bit about how they got to where they are now. Let's talk about some of the decisions they've made after they began getting out into the workforce. And here's one of the things we ask: we want to dive into where they live now. Here's the perception that if you're a millionaire, you must live in a very high cost of living area. You must live in a Los Angeles or a New York City. And you're probably so well-heeled that the way that you afforded your very, very expensive house and your very, very expensive high cost living area is you must have been able to write a check and pay cash for it. That's probably what millionaires look like, right? Yeah, until you read The Millionaire Next Door. And if you read The Millionaire Next Door, you recognize that a lot of your millionaires might actually be in your neighborhood. You just don't know they're there because, once again, wealth is silent. It's the exact opposite of what you see on social media. Wealth

actually resides on that that worst St. Not necessarily in how cool or how rich you look, and that shows up in the houses our millionaires live in. Yeah, let's look at the actual data. When we pulled them and said, Okay, tell us about the current market value of your home, it was pretty exciting. And remember, these are millionaires, these are seven-figure net worth individuals. 26% of our respondents have homes that are valued at under $500,000. 48% of our respondents have homes that are valued between $500,000 and a million. That means that 74% (34) of our millionaires are millionaires not because they live in million-dollar homes, their home value is actually less than a million dollars. There's only a very small segment of our population that lived in the multi-million dollar to $5 million plus homes. So, the mega mansion and the super high-cost of living area is more likely the exception not the rule for millionaires. Realize this is recent data. We actually sent this survey

out just a few weeks back. So, this is actually post-pandemic, post-inflation run-ups, and I thought it was very telling. Only 1% of our population of millionaires live in homes greater than $5 million. So, Lifestyles of the Rich and Famous, cribs, and all the other perceptions is false. The reality is our Millionaire Next Door is the reality for most millionaires in America. Now, remember, another perception was they paid for it in cash. Well, when we actually asked our millionaires, the majority take out mortgages, especially on their first home. So, we asked them questions. Hey, when it came time for you to buy your house, when it came time for you to make a purchase, what did the down payment on your first home look like? And I thought the answers were wonderful. 31% of our respondents, almost one in three, said less than 5%. This, this was me. This was me. I also, this is why I actually, we drafted when we do thing rules for both the financial water of operations for

millionaire Mission my book. I wanted to make sure we made sure we were not Hypocrites, and I and one of the dirty little secrets I knew about personal finances. When I interview all my financial advisers and ask them, hey, when you bought your first home, how did you pay for it? Now look, there's exceptions, sure. I think about two. I have one CPA here, and then I have another one who's y'all will know who he is if I mention him. They're they're just different. So, they did put down the greater than 20%, like you hear a lot of the financial commentators and content creators say. But the vast majority of them did fall into this 31% camp. But that's not all where it stops. There are a portion that put down 5 to 10%. That's a 27%, and then 19% put down somewhere between 10 to 20%. But it was three4 of them are definitely below that 20% down payment that you hear so much about in personal finance.

so if you're someone out there trying to get into your first home, and you're trying to save up for that down payment, take a breath and say it's okay if I can't get to 20%. As a matter of fact, if you want to know some ways to go figure out how to buy a home, we have an entire home buying checklist you can check out at moneyguy.com/resources, where you can actually see exactly what our rules on home buying are, so that you can make sure you're making the home buying decision the right way. All right, so Brian, homes are a very expensive thing that individuals buy. Let's talk about the second thing. When we think about rich people, we think about millionaires. We think about their whips, we think about their cars, their automobiles. So let's talk about what the millionaires Drive. Well, the perception is they lease their car. Millionaires, you know, there are all kinds of comments that say I would never, I would never own my car, I'm only

to lease it, and I'm going to change it so I'm in the newest model every 3 years. That must be the behavior that millionaires execute. If you ask me, most people are driving around in their opportunity for wealth is because when you see the stats out there, and we could have very easily made a slide for this, but the typical car payment when people not leasing but are buying their cars, they're financing them for 70 months. That is so beyond 238. I want you paying off your car in 3 years if you do have to finance it. The other thing I think is interesting, the average car payment is now well beyond $700 a month, and I think about what would that look like if that person was funding the Roth IRA or saving for the future instead of financing at $700 a month for 70 months. There's a lot of people that are more concerned about their perception and trying to impress people who probably really don't care than the reality of what wealth is and what vehicles are.

that's why when we do 238 this is to get you from point A to point B so you can get to your original wealth builder as you're starting out your job this is this 238 is never to buy a fancy or a luxury car think Corolla not Land Cruiser I love it so when we think about the reality our clients don't lease cars they typically own cars and the vast majority keep them for at least seven years so these are not folks that are changing out new cars new models every a couple years these are folks that recognize in the first four years of car ownership you can lose 60% of the value through depreciations they make sure they drive their cars for a long time and the majority of our millionaires pay for their car in cash but they didn't always that's not something they started doing and I think a lot of financial commentators out there say you have to pay cash have to pay cash have to pay cash well unfortunately sometimes it's

just not possible, especially early on in your wealth-building journey. Well, timing matters. I mean, this is the stat. If you show it Bo, is that our research shows of our millionaires, yes, 65% of them are paying cash for their cars. And look, I've paid cash for my most recent cars, you've paid cash for your most recent cars, but is that a fair picture for somebody who maybe is looking at our content in their early 20s when they see that and you say millionaires pay cash, yes, they pay cash once they're millionaires, but if you go back and this is the question I always when I hear commentators say millionaires pay cash, I'm like yes, but let's go ask those same millionaires what did their first car look like 'cause I know what my journey looked like when I was coming out of college and had it was broke as a joke but I had a lot of opportunity because I had this accounting degree. I had to finance a car and sure enough when we asked our our

our clients that are millionaires and above. 71% finance their first cars. So that's why we have 238. So if you are someone who's not in the position right now where you can pay cash but you still need reliable transportation, use 238 to your benefit and don't feel guilt about that. And then hopefully you can continue along in your financial journey until one day you can be one of the 65% that gets to pay cash for their automobiles. If that day is not today, that's okay.

The Truth About Where Millionaires Actually Live and What They Drive

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Many millionaires actually live in neighborhoods with home values under $1 million, contradicting the perception of them residing in multi-million dollar mansions.

The majority of millionaires' homes are valued at under $1 million, challenging the notion that they all live in high-cost areas.

The data shows that the image of millionaires living in mega mansions in expensive areas is more of an exception than a rule.

The Truth About Millionaires' Home Purchases

Most millionaires in America live in homes valued at less than $5 million, with the majority taking out mortgages, especially on their first home.

A large percentage of millionaires made a down payment of less than 20% on their first home, with 31% of them putting down less than 5%.

This challenges the common perception in personal finance and defies the advice often given by financial commentators and content creators.

Tips for First-Time Homebuyers and Car Financing

It's okay not to reach a 20% down payment for your first home, and there are resources available to help you make the right home buying decision.

Millionaires often choose to lease their cars, prioritizing the latest models, but focusing on financing a car for a shorter time and amount can be more beneficial for building wealth.

Many people prioritize impressing others with expensive car payments, rather than focusing on saving for the future through investment or retirement accounts.

The Reality of Car Ownership for Millionaires

Millionaires typically own cars for at least seven years and often pay for them in cash, but this wasn't always the case for them.

Many millionaires actually finance their first cars, so the advice to always pay cash may not be feasible for everyone, especially early in their wealth-building journey.

Despite the common belief, the majority of millionaires only start paying cash for cars once they have achieved millionaire status.

Financing Your First Car as a Millionaire

A significant 71% of millionaires finance their first cars, so there's no need to feel guilty about using financing.

The number 238 can be beneficial for those who need reliable transportation but can't pay cash right now.

It's okay not to be part of the 65% who can afford to pay for their automobiles in cash, as long as you continue on your financial journey.