Wealth – Memphis Flyer

With inflation on the rise, interest rates at recent historical highs, and income stagnation in many industries, it may seem impossible to create an investment portfolio and become a millionaire in today’s economy. Here we highlight five myths about millionaires to help you separate fact from fiction.

Myth #1 – Millionaires inherit their wealth.
Many people view all millionaires as trust fund babies born into a life of luxury. However, a recent survey found that 79 percent of millionaires didn’t receive any type of inheritance. In fact, the only characteristics shared by most millionaires are determination and work ethic.
Truth – Most millionaires come from families with average or below-average income and built their wealth independently.

Myth #2 – It’s easy to spot a millionaire.
If your mind produces an image of millionaires living in big houses, driving fancy cars, and vacationing in exotic locations, you may be surprised to learn that most millionaires live relatively modest lifestyles. Consider the following data points:

The most popular car brands among millionaires are Toyota, Honda, and Ford, with nearly 61 percent of millionaires driving one of the three.
The average American millionaire spends $117 per month on clothes, while the average American (across all income levels) spends $161 per month on clothes.
The average American millionaire spends less than $200 per month at restaurants, while the average American spends $303.25 per month eating out.
93 percent of millionaires use coupons some of the time when shopping.

The fact is that most millionaires don’t look wealthy. Millionaires tend to live comfortably within their means and avoid taking on unnecessary debt. They tend to purchase homes they can afford then work to pay them off early.
Truth – Most millionaires accumulate their wealth through a combination of hard work and smart financial decisions, and their relatively frugal lifestyles can make them difficult to spot.

Myth #3 – You need a high salary to become a millionaire.
When asked, many Americans guess that most millionaires are doctors, senior corporate executives, or business owners because these careers typically offer the highest salaries. In reality, the top five careers held by millionaires include:

Engineer
Teacher
Accountant (CPA)
Manager
Attorney

Are you surprised to see teachers on the list, given that they’re notoriously underpaid? Their inclusion shows a high salary doesn’t necessarily equate to financial success. In fact, 69 percent of millionaires averaged less than $100,000 in household income per year, and 33 percent of millionaires never reached a six-figure income throughout their entire careers.
Truth – Millionaires don’t always have high salaries. Even those in lower-paying careers can build wealth over time. Ultimately, one of the greatest indicators of whether you can become a millionaire isn’t how much you earn but rather how much you consistently save.

Myth #4 – Millionaires have degrees from prestigious universities.
While it’s true 88 percent of millionaires hold a bachelor’s degree, 62 percent of them obtained their degrees from public state universities — and one out of 10 millionaires never obtained a college degree. Only 8 percent of surveyed millionaires attended Ivy League schools.
Truth – Education is important, but the degree matters more than where it’s from.

Myth #5 – Millionaires are savvy investors who know how to manage their finances.
Most millionaires understand they don’t know what they don’t know. They tend to spend a lot of time reading and learning about how they can reach their financial goals. Very few attempt to save and invest on their own. In fact, 68 percent of millionaires work with a financial advisor, and most began doing so before they achieved millionaire status.
Truth – You don’t need to manage your finances on your own. A qualified fiduciary wealth advisor can help you make smart financial decisions and build your wealth over time.

Gene Gard, CFA, CFP, CFT-I, is a Partner and Private Wealth Manager with Creative Planning. Creative Planning is one of the nation’s largest Registered Investment Advisory firms providing comprehensive wealth management services to ensure all elements of a client’s financial life are working together, including investments, taxes, estate planning, and risk management. For more information or to request a free, no-obligation consultation, visit CreativePlanning.com.

“Alexa, thank my driver.”

These words rubbed me the wrong way last week when Amazon announced a campaign to allow customers the opportunity to say “thank you” and send a $5 tip to their delivery driver. Not that giving thanks is a bad idea. We should all show more gratitude more often. It’s just that coming from one of the most profitable companies in the U.S. — and on the heels of reports of a lawsuit launched against it, for withholding employee tips of all things, in addition to impending layoffs which include jobs in its Alexa division — it sounds like a bit of a joke.

For the 12 months ending in September 2022, Amazon exceeded $502 billion in revenue and $11 billion in net income. Billion. In a society where instant gratification has become the norm, and where with a few mouse clicks or screen taps, we can have just about anything we’d ever need or want delivered to our front doors in a matter of hours or days, the irony of asking a robot to say thank you to the humans doing all that work does not escape me.

According to Amazon’s announcement: “Starting December 7, any time a customer says, ‘Alexa, thank my driver,’ the driver who delivered their most recent package will be notified of the customer’s appreciation. And, in celebration of this new feature, with each ‘thank you’ received from customers, drivers will also receive an additional $5, at no cost to the customer. We’ll be doing this for the first 1 million ‘thank yous’ received. And, the five drivers who receive the most customer ‘thank yous’ during the promotional period, will also be rewarded with $10,000 and an additional $10,000 to their charity of choice.”

Okay, sounds good. But what’s $5 million to Amazon — a corporation that netted $33.3 billion in profits in 2021? While this year thus far has shaped up to be the first in recent past that the company has shown a decline in profits (2021 showed a 56.41 percent increase from 2020; 2020 an 84.08 percent increase over 2019), that amount is but a drop of water in the ocean.

According to ZipRecruiter, the average national salary for Amazon delivery drivers is $43,794, depending on location, with an average of $41,050 per year in Tennessee. There are also a slew of Amazon Flex drivers — a program that launched in 2015 as the uptick of services like Uber, Lyft, and the like saw more people using their own cars to make extra cash. Those Flex workers are independent contractors who do not receive reimbursement for gas, mileage, parking fees, etc. — and who, Amazon reports, earn $18 to $25 an hour, again depending on location and how quickly they complete their deliveries. Not bad for an hourly rate, but factor in gas, vehicle wear and tear, and physical demands, and you’ve gotta wonder what that balances out to. Of course, people choose to work at Amazon and could seek employment elsewhere at any time. But that’s not the point. Folks who work in the warehouses and in shipping and delivery are among the most integral parts of the business. Do consumers need to log on to an app or ask an electronic device to ensure they’re appreciated or properly compensated?

The “thank my driver” campaign hit its limit just one day after the launch, with Amazon announcing December 8th, “We have received more than 1 million ‘thank yous’ concluding the promotion offering $5 per ‘thank you’ to eligible drivers. You can still share your appreciation by saying, ‘Alexa, thank my driver.’ We are thankful for the enthusiastic response to the promotion and the appreciation shown to drivers.”

So yes, of course, continue to thank your driver. (Although I’m curious if they’re being inundated with constant, now-annoying notifications.) Maybe put a little care package out with snacks or a gift card. But this whole thing reeks of a PR stunt to show Amazon as a company that cares for its workforce. And maybe it does. It could be a great place to work; I wouldn’t know. But I do know that its founder, Jeff Bezos, is reported to be the fourth-wealthiest person in the world, and that doesn’t happen without a certain level of smarts — and, I dare say, greed.

While we’re in the spirit of gratitude, if the opportunity arises, be sure to express thanks to your other delivery drivers, postal workers, restaurant servers, retail associates, and everyone else who keeps the ships afloat, especially this time of year. And consider stopping in a locally owned shop for some of your holiday gifting needs this season. They could use the support much more than Amazon.