THE OLD SAYING is true: The rich
are different. But not only do their values and
habits set them apart from the hoi polloi, they're
different from their wealthy predecessors of a
generation ago. For those interested in joining
their ranks, it helps to understand why.
To enter the nation's top 1%, you need more than
$5 million. And if you get there, you'll have plenty
of newly-arrived company: The number of U.S. "pentamillionaires"
has quadrupled in the past 10 years, to more than
930,000. Indeed, 70% of the nation's big family
fortunes are less than 13 years old, according to
research and marketing firm The Harrison Group. And
the people who amassed them are, first and foremost,
entrepreneurs — risk takers for whom wealth is a
byproduct of pursuing their passion.
What got them to the highest level? It isn't
necessarily stock-market savvy: On average, folks
who recently hit the $5 million mark report that
only 10% of their money came through passive
investments. And only 10% of pentamillionaires
inherited their wealth. One might think that good
fortune would play a role, but even luck is largely
a matter of one's own making. Psychologist Richard
Wiseman has found that people who describe
themselves as lucky share common habits that account
for their success: They're friendly and fond of new
experiences, traits that put them on a collision
course with new opportunities. In addition, "lucky"
folks simply have higher expectations of success —
they're too pigheadedly optimistic to heed the long
odds and call it quits.
Not to say that getting rich is simply a matter
of having a swell attitude. The path to riches
usually involves the kind of risk that would make
most people feel a little queasy. Harrison Group
head Jim Taylor recently persuaded more than 3,000
pentamillionaires to discuss their path to success.
Perhaps not surprisingly, none of them had a cushy
union job down at the DMV. The vast majority — 80% —
either started their own business or worked for a
small company that saw explosive growth. And almost
all of them made their fortune in a big lump sum
after many years of effort.
Surprisingly, today's very rich say that money
itself wasn't much of a motivator. Once you've got
food in your belly and a big-screen TV, the mere
prospect of more Benjamins isn't enough to get you
leaping out of bed at 5 a.m. Rather, rich folks
often make their fortunes after they make up their
minds to solve a problem or do something better than
it's been done before. When Frank Darras graduated
from law school, all he wanted in terms of material
wealth was a middle-class life for his wife and
kids. But while working as a doctor's assistant to
put himself through school, he developed a burning
desire to help the folks he saw struggling with
unpaid insurance claims. "It was the David and
Goliath aspect that attracted me more than
anything," says the Ontario, Calif., attorney. Once
he had his degree, Darras was like a cruise missile
aimed at the insurance industry. By 1990 Darras had
his first million-dollar year, and today he oversees
one of the nation's largest disability and
long-term-care practices. "I never thought I'd make
$5 million in two lifetimes," he says. "I just loved
the work."
Getting rich also requires a certain amount of
stubbornness and clarity of purpose. Consultant Joel
Kurtzman, who evaluated 350 startups for his book
Startups That Work, found that successful outlets
usually have a team of two or three founders who
share a common vision; the success rate for this
model was a remarkable 50%. The odds for solo
founders were more like the oft-quoted one in 10, in
part because they often found themselves working at
cross-purposes with hired guns who see things
differently. That's what 34-year-old Justin Jarvinen
learned the hard way. The entrepreneur saw two
promising business ventures go down the tubes after
he took on partners who tweaked his ideas beyond
recognition. But three years ago he started
VerveLife, a service that helps companies promote
online marketing efforts with free music downloads.
Knowing that his success depended on his enthusiasm
for bringing the idea to market, he carefully chose
partners who supported his vision.
Jarvinen is now the majority shareholder in two
dot-coms, and he claims an eight-figure net worth.
But what really excites him is his freedom to
explore and support new ideas; his current passion
is mentoring younger entrepreneurs. "I'm interested
in doing whatever I want, whenever I want," he says.
And chances are you feel similarly. When people
dream of getting rich, it's about more than nice
clothes and fancy vacations. Being rich means
freedom: to spend your time as you please, to pursue
your real interests and to take a chance without
courting utter ruin. Paradoxically, the road to
riches often means acting as if you already have
that freedom.
(Additional reporting by Anojja Shah)
