Category: Economics

Why Many Millionaires Don’t Feel Rich

By Stephanie Christensen

The term “millionaire” once inferred that a person was part of society’s upper crust, able to enjoy luxuries most only dreamed of, including vacation properties and  early retirement. The Gilded Age of the 1980s was all about flaunting excess, as echoed in the movie “Wall Street” and television series like “Dallas” and “Dynasty.” Back then one was perceived to be “rich” if he or she had an income around $100,000, according to a USA Today article released on May 22, 1987. By 1989, American millionaires had become quite common: there were about 1.5 million of them. That number has boomed. As of 2009, there are 7.8 million millionaires living in the United States, according to Spectrem Group. (Making this dream come true takes work, but it’s well worth the effort. See 10 Steps To Retire A Millionaire.)

TUTORIAL: Retirement Planning

The Millionaire Outlook
However, being a millionaire today doesn’t get a person so far as it once did, and the millionaires themselves are painfully aware. Fidelity Investments recently released the findings of its Fidelity® Millionaire Outlook survey, which looks at “investing attitudes and behaviors of more than 1,000 millionaire households,” according to the Fidelity media release. This year’s study revealed that 42% of millionaires surveyed do not feel wealthy; 46% said the same thing in 2009.

Why are American millionaires lacking such self-confidence toward their own success? It may have something to do with relativity. In wealthy West Coast cities like San Francisco and Palo Alto, home to the mega rich like PayPal co-founder and venture capitalist Peter Thiel, and Facebook CEO Mark Zuckerberg, being a millionaire isn’t enough to launch you into a life of luxury – or even make you stand out from the pack. In 2007, founder Gary Kremen, explained to the New York Times that “you’re nobody here at $10 million,” referring to the concentration of money in Silicon Valley.

Increased Cost of Living
In addition to the surrounding competition, the cost of living in millionaire-dense areas is enough to chip away at anyone’s net worth. The ACCRA Cost of Living Index, published by The Council for Community and Economic Research, lists cities in New York and California among the top 10 most expensive places a person can reside. Manhattan is the most expensive, indexing at 207.9.

Another reason millionaires might not feel so rich is that from a day to day standpoint, they’re not actually living much differently than the rest of us. Being coined a millionaire once led to the conclusion that one did a lot more play than work, a stigma that no longer applies to millionaires in 2011. According to Spectrem Group, the average United States millionaire is 62 years old. Just 1% of millionaires are under the age of 35, and 38% of millionaires are 65 and older. West Coast millionaires skew slightly older.

Further, a large number of individuals in the Mountain States and Texas never plan to retire, and millionaires in the Northeast and West Coast make up the largest percentage who don’t have plans to retire for at least 10 more years.

Living on Less
According to “The Millionaire Next Door: The Surprising Secrets of American’s Wealthy” by Thomas J. Stanley and William D. Danko, frugal living may also contribute to the insecure self-perception millionaires have regarding their wealth. Their research found that the average millionaire lives on less than 7% of his or her wealth, wears inexpensive suits and drives American-made cars that are not the current year’s model. Throw the lagging housing market and volatile stock market into the mix, and it looks like millionaires may not be any better off than the rest of us when it comes to the ability to rest on our financial laurels.

Given all these factors, what will take millionaires to feel rich again? Those surveyed by Fidelity pinpointed $7.5 million as the investable asset level that would make them feel back on top. (Becoming a millionaire is not as hard as you might think – it just takes time. Check out 6 Simple Steps To $1 Million.)

And why pay attention to the millionaire “woe is me” findings? They could truly be the key to your own financial future. While millionaires’ confidence level in the economy is negative, their outlook for a recovery is at the highest level since 2006, the year Fidelity began keeping tabs on them. Of those surveyed, 43% said they plan to return to stock market investing within the next 12 months. In a Fidelity-released media statement Michael R. Durbin, president of Fidelity Institutional Wealth Services®, explained that  “millionaires’ outlook could be seen as a leading indicator of the direction of the economy, especially since the last time we conducted this survey in early 2009, they forecasted improvement in all aspects of the U.S. economy at the beginning of 2010.”

The Bottom Line
Whether you envy millionaires or shake your head in awe at their lack of financially secure feelings, you can stand to benefit from following their lead, whether you choose to get back into the market, scale back your spending, or continue to live just as you do. One day, you just might be a millionaire, too.

This article was posted on April 13, 2011 in the online magazine, Financial Edge, by

How To Catch a Wild Pig: A Parable on Society

Recently, a colleague of mine sent me this piece called, “Catching the Wild Pig”.  Initially, I expected the gruesome kind of wild boar-hunting that I grew up with on Maui, and that my Valley Isle brethren and close friends still carry out up in Poli Poli Springs. But of course, this is simply a parable. Anyway, it was the first I heard about it and here it is:

A chemistry professor at a large college had some exchange students in the class. One day while the class was in the lab the Professor noticed one young man (exchange student) who kept rubbing his back, and stretching as if his back hurt. The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country’s government and install a new communist government.

In the midst of his story he looked at the professor and asked a strange question. He asked, ‘Do you know how to catch wild pigs?’ The professor thought it was a joke and asked for the punch line. The young man said this was no joke. ‘You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come every day to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again.

You continue until you have all four sides of the fence up with a gate in the last side. The pigs, who are used to the free corn, start to come through the gate to eat; you slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught.

Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.

The young man then told the professor that is exactly what he sees happening to America. The government keeps pushing us toward socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfare, medicine, drugs, etc. While we continually lose our freedoms — just a little at a time.


While I found this fable interesting and captivating, we’re in a rather interesting dilemma here in the Hawaiian islands when it comes to wild pigs. I understand the whole notion of the “trapped” wild pigs and the problems that presents, but in places like Haleakala National Park on Maui, we are also experiencing what happens when you let the pigs go nuts and just run wild. I suppose the trouble we have in our political system is that we keep vacillating between taming the wild boar and letting them run wild. As with all in life, balance is critical, I think. What do you think?

Secrets of Self-Made Millionaires

Secrets of Self-Made Millionaires: They’re just like you. But with lots of money.

Here’s a great article written by Kristyn Kusek Lewis for Readers Digest Magazine. She describes five very different millionaires and the practical, real life lessons they share that have contributed to their success. The third lesson in the stack really stood out for me, “Passion pays off.” The message: Love what you do. Accordingly, when you’re passionate about your work, you care about the consequences. “

According to research by Thomas J. Stanley, author of The Millionaire Mind, over 80 percent of millionaires say they never would have been successful if their vocation wasn’t something they cared about.” In reading Stanley’s book, what I found interesting is that he chose to exclude “misers”—for those whose God was money—in the final cut. From the more than 1,300 millionaires he interviewed, his overall goal was to survey people who were not just successful at building a mountain of dough. He included those who were also well balanced and seemed to enjoy their wealth and thus, life.

Back to Lewis’ RD article, Secrets of Self-Made Millionaires, I found it to be quite succinct and to the point. The author highlighted five people who have at least a million dollars in liquid assets and asked them to share the secrets that helped them get there. Here they are:

1. Set your sights on where you’re going

2. Educate yourself

3. Passion pays off

4. Grow your money

5. No guts, no glory

So what is the biggest secret? It’s simply to stop spending. According to Lewis, she says “Every millionaire we spoke to has one thing in common: Not a single one spends needlessly. She cites a survey that indicates many wealthy people spend money “with a middle-class mindset”, clipping coupons and shopping at sales. Real estate investor Dave Lindahl drives a Ford Explorer and says his middle-class neighbors would be shocked to learn how much he’s worth. Fitness mogul Rick Sikorski can’t fathom why anyone would buy bottled water. Steve Maxwell, the finance teacher, looked at a $1.5 million home but decided to buy one for half the price because “a house with double the cost wouldn’t give me double the enjoyment.”

Lewis points out that “millionaires may have earned their money through a combination of discipline and dedication, but it’s their frugal habits that keep them rich.” Over the years, as I observe those that have accumulated substantial wealth, the more I truly believe this to be the case.

Not Suprisingly, Hard Times Are Tough On Relationships

Relationships really seem to suffer when the economy is in the tank. According to John Ingrisano, author of The Back to Basics Book of Money! A Couple´s Guide to Financial Peace,

“marriage is an economic partnership. Money may not be the sole factor in its success or failure, but it is one of the top three.”

So, when couples run into financial challenges, Ingrisano says that it can impact every other aspect of their relationship. “It can turn your life and your home into a domestic battleground.” What can you do?

Here are just some recommendations from Ingrisano, who is also director of the Family Finances Conference Center.

  1. Keep the channels of communication open. Talk about your fears and concerns. Exchange points of view.
  2. Share money decisions and responsibilities. Pay bills together. Discuss purchases. Most of all, discuss your options if finances become tight. Do you reduce spending (cancel a vacation, dine out less often, give up gym membership)? Take a second job? Sell assets? Map out a strategy for getting through this together … and do it together.
  3. Keep thinking long-term. Identify mutual goals … and put them in writing. Where would you both like to be one year, two years, and ten years from now? In a nicer home? With children who are debt–free college grads? Retired in comfort at age 60? If you have trouble reaching agreement, look for compromises.

At The Wheeler Group LLC, we believe that the best way for you to learn about life insurance and the other financial services products we offer is to consult one of our professionally trained, licensed agents. Simply call us at (808) 216-4147 or easily email: to request a no-obligation, no–cost consultation with us.

The Wheeler Group Participates in First-ever Personal Finance Expo in Honolulu


Over this past weekend, we at The Wheeler Group LLC participated in the first-ever Personal Finance Expo here in Honolulu. The nonprofit Hawaii Council on Economic Education and the Hawaii Event Group hosted this well-received event. The two-day expo took place on Aug. 15 and 16 at the Neal S. Blaisdell Center and featured more than 30 seminars and a variety of exhibitions from both private companies and the government. The goal of the expo was to educate people of all ages about topics such as debt management, investments, retirement plans, employment and entrepreneurship and even the basics of starting a new business.

titleIn my estimation, Kristine Castagnaro, and her team at The Hawai`i Council on Economic Education exceeded event expectations and did a wonderful job for bringing together participants and exhibitors as resource providers. We were fortunate to meet numerous people interested in learning more about our programs designed to help them with retirement accumulation–saving tax-deferred, as well as distribution planning through tax-advantaged programs. As we shared with visitors to our booth, we believe that annuities and insurance are the essential foundational elements of a diversified portfolio, and we believe in safety through guarantees and asset allocation.

Emerging Equity Markets are Not the Emerging Economy

With regard to international, *emerging markets I believe and I’m betting real dollars (Vanguard Emerging Markets Stock Index Fund Investor Shares) that the current happenings in the equity markets does not reflect the true economy. We may have overshot on the high side, but while the fact remains that international, emerging markets are extremely volatile, the sector represents true global growth in the future. My indicator: Cash flow. Companies exist on earnings and profits. Look to their balance sheets and numbers don’t lie (well, let me retract that notion; let’s agree, it’s dependent on who is reporting the numbers…Enron, Lehman, etc.)

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Currency Colloquialism: The Buck, Dough and Dollar

According to Chris Connell of the American Numismatic Association, we Americans have slinged around terms for money since the earliest days of our founding fathers. But what is the origins of this colloquialism, or informal words we use in conversation to describe the various denominations for currency in America?

Well, beginning in the 1740’s, for example, Americans were busy trading deer hides for goods and services, thus came the proverbial term for a dollar, a “Buck”.

Around 1767, a word derived from the Germanic “thaler,” was used throughout Europe and Great Britain from the 1500s to 1700s to refer to large silver coins. The English translation was “dollar.”

Another idiom used extensively to describe an insignificant value is the phrase, “not worth a red cent.” According to Stuart Berg Flexner (“Listening to America”), the original 1793 U.S. one-cent copper coin was issued until 1857. The cent has also been called ‘red cent,’ (from the copper’s reddish color). Since so many penny copper coins had been called ‘coppers,’ the first U.S. copper cent was immediately called a ‘copper’ and ‘copper cent.’ ‘Not worth a copper’ is an American term of 1788, followed years later by ‘not worth a red cent’.

Then, in 1851, “Dough” became widely accepted and was used extensively. It simply emphasized paper currency’s roles as one of life’s necessities.

Not long thereafter, Connell explains, the “Sawbuck,” was the norm when referring to a $10 bill. The name came from an early sawhorse whose crossed legs formed an X, the Roman numeral for 10, or a $10 bill.

On the website, Measuring Worth (, there are numerous ways to measure relative worth. As the site points out, “if you are asking what a monetary value in the past is “worth” today, there is no one correct answer. A price or an income in the past would have been valued in different ways in that time by different people and under different contexts. That must be taken into account when asking the same question today”.

I myself have wondered how the very rich people of today compare to the Robber Barons of the past. Recently it was reported that Warren Buffet is the second richest person in the world and is worth some $50 billion today. When John D. Rockefeller died in 1937 he was worth $1.4 billion. Who, you ask, is richer in their time? The best way to analyze this question, according to Measuring Worth, is by questioning how big their wealth is compared to the economy they lived in during their time. This is measured by their share of GDP and for Rockefeller, that number is $210 billion, or four times greater than that of the ‘Oracle of Omaha’, Mr. Buffet.

Finally, the term, “grand,” when referring to money was first introduced into pop culture in the roaring 1920s. Today, we all know that a “grand” refers to a thousand dollars. But originally, when it first came on the scene, it was short for “grand amount,” which at the time was a whopping $1,000. Depending on what method we use to measure the value of a grand, or $1,000 in 1920, Measuring Worth pegs the value in 2008 at the definite “grand amount” of $156,000. Wow!

From $2 Bills to $100 Billion Bank Notes

Can you imagine? A $100,000,000,000 bill. You heard right…

In a previous post, I wrote about my personal experiences with our $2 bill. At the moment, the U.S. economy is slowly moving toward a recession, and economic pressure is everywhere. We all certainly feel it at the gas pump, and in the grocery stores. However, what is occurring economically in Zimbabwe should put things in perspective for all of us Americans.

With the official Zimbabwe inflation rate now at 2.2 million percent, the once-prosperous Zimbabwe has seen an unprecedented economic meltdown since it gained independence in 1980. According to the New York Times, in January 2008, “the government of President Robert G. Mugabe, battered by hyperinflation, said it would begin issuing new currency beginning Friday: $1 million, $5 million and $10 million notes.”

Z100bn_noteA $10 million note.

Newsweek ran an article earlier in 2008 entitled: ‘Poor Billionaires’. The sub-heading read, “In a nation with rampant hyperinflation, bread is a bargain at just $10 million.” The article went on to explain, “The bill, released for the first time last month, is actually not a proper currency note at all but rather a “bearer check.” Zimbabwe stopped printing real money long ago, when its inflation rate was still at a manageable level. Today these bearer checks are the only currency remaining. Last week in Zimbabwe 10 million dollars could buy exactly two rolls of toilet paper.” Terribly, only several months would go by and things would get exponentially worse.

Now (July 19, 2008) CNN has released an update: “Zimbabwe’s troubled central bank introduced $100 billion banknotes Saturday in a desperate bid to ease the recurrent cash shortages plaguing the inflation-ravaged economy.

A shopper displays a $500 million Zimbabwean bank note.

A shopper displays a $500 million Zimbabwean bank note.

The bills officially come into circulation Monday, although they were on the foreign currency dealers market Saturday. As high as they are, though, the bills still aren’t enough to buy a loaf of bread. They can buy only four oranges.”

After doing some research for this post, back here in America, what seems to me as outrageously high gasoline and food prices is now more palatable, yet still unacceptable, but ultimately, not stinging as badly. Of course, still these crazy prices has driven inflation (5.3% in June) to the biggest annual jump since 1991 (in Hawaii, we vividly remember the impact the Gulf War had on our island economy). A separate Labor Department report showed the average hourly wage up only 3.4% over the same 12-month period, meaning the typical American is having trouble keeping up with the price increases.

One measure of the economic stress on households is the so-called economic misery index which is calculated by adding the 12-month inflation rate and the unemployment rate. With the jump in inflation to over 5% in June from 4.2% in May 2008, the misery index is now at 10.5, the first time it has hit double digits since 1993.