Americans are constantly bombarded by the news media that uses the term “the market,” i.e. the market is up, the market is down, it is a good time to invest in the market.  With the current surge in the stock market it is easy to forget that it’s not the only market in our economy.  I was reminded of this by Mark, who recently outlined how he became a millionaire. 

Mark started his career in banking 20 years ago.  He is just one of a growing number of people who decided not to rely completely on his employer for his livelihood.  He cleverly leveraged his experience in retail banking and then later in mortgage banking into a moonlighting side business.

I have a passion for passive income and have extensive real estate interests in addition to my main ‘job.’  In recent years only one third of my income comes from work [as an employee in mortgage banking] and the other two thirds from passive sources.  At age 43 I suppose I could retire. . . .

Mark also revealed something about his consumption habits: 

My wife teases me that I will buy a foreclosure for $65K cash that I have not even been inside of, but I agonized for weeks before buying a $30K used car.  

Mark is a member of the millionaire next door club.   He has more than a single source of income which he can control, unlike the stock market.  This brings us to another important issue. Just what assets do millionaires own?  Let’s look at the data from the IRS’ estate returns computed during 2007-2009 for those decedants who were under 70, married at the time of their deaths and had a gross estate of $2M or more.  The rank and the percentage of the aggregate wealth held in the top ten asset categories are as follows:  1. investment real estate (17.7);  2. closely held stocks (14.5);  3. publicly traded stock (12.6);  4. retirement assets (11.4);  5. personal residence (9.2);  6. insurance (7.2);  7. cash assets (6.9);  8. limited partnerships (4.1);  9. tax-exempt bonds (3.9), and 10. farms (3.1).