Let's talk about the rich -- those people who, according to former Congressman Richard Gephardt, are "winners in life's lottery." Or the people whom director Michael Moore preaches, in his book "Dude, Where's my Country?" got rich off the backs of the poor.
Farrah Gray was raised in a predominantly black Chicago neighborhood. At age 8, he started a lemonade stand business, later a venture capital business, a food business and a magazine. By age 17, Farrah Gray was a millionaire, had been chief executive of four companies, and had offices on Wall Street, and in Las Vegas and Los Angeles.
While becoming a millionaire by age 17 is rare, eventually becoming a millionaire isn't. According to TNS Financial Services' 2004 Affluent Market Research survey, there are an estimated 8.2 million American households with assets, excluding primary residences, worth over $1 million. That's a 33 percent increase over the 6.2 million millionaire households in 2003.
Who are these people portrayed either as winners in life's lottery or who got rich by exploiting the poor? One thing for sure is that they're not the sons and daughters of the Rockefellers, the Kennedys or the Vanderbilts. According to Drs. Thomas Stanley and William Danko's research published in their book "The Millionaire Next Door: The Surprising Secrets of America's Wealthy," 80 percent of today's American millionaires are first-generation rich.
Drs. Stanley and Danko listed other characteristics of these 8.2 million millionaire households. Fewer than 20 percent inherited 10 percent or more of their wealth. More than half never received as much as a dollar in inheritance. Fewer than 25 percent received "an act of kindness" from a relative greater than $10,000, and 91 percent never received, as a gift, as much as $1 from the ownership of a family business.
Being first-generation rich is not new for Americans. Drs. Stanley and Danko say, "More than 100 years ago the same was true. In The American Economy, Stanley Lebergott reviews a study conducted in 1892 of the 4,047 American millionaires. He reports that 84 percent were nouveau riche, having reached the top without the benefit of inherited wealth."
This points to one of the most unique features of our nation. Just because you know where a person ended up in life is no guarantee that you can tell where he started. In other words, there is so much economic mobility in our society that starting out with modest means or even being dirt poor does not prevent one from ending up at the top.
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