When my career first started, USA Today published excerpts from my national study of millionaires. That morning a reporter from CBS Radio called me at home. After responding to the who, what, when, where, how and why questions, I had to deal with one more. The reporter asked, “Dr. Stanley, are you a millionaire?” I told her the truth. She asked, “How can you be an expert on millionaires and not be a millionaire?” I was 30 at the time she called, and I explained to her that the typical millionaire is 57.
Recently, The Wall Street Journal published its annual rankings of financial analysts. Do these investment experts practice what they preach? Most of them earn a high income. In fact, of the 200 top high income categories, analysts rank among the top ten in the proportion of those who have annual realized incomes of $200,000 or more. Ah, but are they wealthy? Many of them are. The financial analysts group ranks #1 in terms of the percent of its members with $1M [net] or more in investments. But be selective in listening to analysts; not all of them have a great track record. And not all are excellent at transforming income into wealth. This may be a function of the Wall Street environment of living above one’s means.
Do you want to be a serious investor? If so, you will probably benefit greatly from reading the detailed company analyses produced by the top analysts cited in The Wall Street Journal. But relying only on second and third hand snippets taken from these analyses may lead to the wrong conclusions. In order to access the analysts’ reports, you may have to become a client of the full service investment firms who employ them. Keep in mind that 80% of even the most frugal millionaire next door types has at least one account at a full service investment firm.