CNN Money recently profiled a series of 401(k) millionaires — and let’s be realistic, all except one of them earn incomes well into the six-figure range. The one whose salary falls below that level pulls down $80,000 per year — and she was launched by a $100,000 divorce settlement.
Naturally, it’s easier to hoard a big fistful of money each year when you’re not struggling to just fill the fridge. But before you hate these folks because their finances are beautiful, let’s look closely at what they have in common with one another besides attractive paychecks.
Most are in or just over the 50-something age bracket.
- Many began saving money in their 20s. Typically, they’ve been investing for at least 30 years.
- These power savers never stopped investing, “even when the markets go crazy.”
- They’re very attuned to and knowledgeable about their investing. “I am very very sensitive to what the expense ratios are,”one 401(k) millionaire tells Fortune. “Literally, that’s the first screen I look at. It’s not just performance, but what are the fees?” (For more on fees, see this calculator. While your company may not be here, typing in different corporations’ names gives an idea of how savings are chomped by fees.)
- They’re committed to spending their money wisely: “It’s not a matter of doing without. It’s tradeoffs,” says that divorced woman mentioned earlier, who now has $2 million. “It’s looking at each dollar you spend and asking, ‘Is this the best use of your money?’”
Betcha she didn’t buy a $200 leather folio for her new iPad.
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