Image: Jose Luis Pelaez Inc/Blend Images/Getty Images
About This Quiz
The word millionaire brings images of mansions and fancy cars to mind, but most of today's millionaires aren't living such an elite lifestyle. Even though there are more millionaires today than ever before, many people dream of becoming one. If you are one of those people with caviar dreams, take this quiz to find out what it will take for you to reach that level of wealth.
What is the main reason that there are more millionaires in the world today than in the past?
inflation
Since the increase in the number of millionaires is largely due to inflation, it also means a lot less these days to be a millionaire.
stock market increases
favorable tax laws
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How many investable assets does a person need to have in order to be considered a high-net-worth individual (HNWI)?
$1 million
The term "investable assets" means that the individual's home is not included when calculating his or her net worth.
$5 million
$10 million
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What is an example of a non-liquid asset?
a trust fund
Non-liquid assets are those that can not easily be turned into cash.
a savings account
stocks
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What is net worth?
assets minus liabilities
Liabilities are your debts, including mortgage, credit card debt and outstanding car payments.
liquid assets minus non-liquid assets
liquid assets plus money owed to you
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What is true of most millionaires?
They are frugal spenders.
The book "The Millionaire Next Door" studied millionaires and came up with a number of surprising characteristics about them.
They have inherited their money.
They hate their work.
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What term refers to a person with $100 million of net worth?
hectamillionaire
Although there is no standard way of defining a millionaire, when you get into the range of the extremely rich, bankers agree that they should leave a person's house out of the calculation of his net worth.
decamillionaire
super-high-net-worth individual
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What is the best way to give yourself the chance to become a millionaire?
starting your own business
The majority of millionaires were self-made and most frequently owned their own businesses. This way, the profits went straight to them instead of to the owners of the company for whom they worked.
playing the lottery
working your way up the corporate ladder of a large company
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What is a major reason that most people think more businesses fail than actually do?
miscategorization in government statistics on the topic
Many of the businesses that the government lists as failures due to closure are actually simply sold off or closed voluntarily, not out of necessity.
propaganda spread by established corporations
unfounded rumors that grew out of fear
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According to the U.S. Census Bureau, about what percent of start-up businesses last more than four years?
0.35
0.5
0.65
Not only that, but only one-tenth of small businesses close each year in the United States, according to a different study.
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What does it mean to earn compound interest on your savings?
earning interest on the interest earned as well as on the principle invested
By earning compounded interest, you will earn much more overall than if you withdraw the interest and only add more savings each month. Leaving your interest alone is the key to really making your wealth grow.
earning interest at a steadily increasing interest rate
earning interest that is calculated and added each week
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Why might becoming a millionaire by the time you retire not be sufficient for your goals?
because it will be worth much less by then
Inflation causes the steady devaluation of money so that $1 million dollars in 30 years time will be able to purchase less than half of what it could today.
because once you get a million, you will not want to retire
because you will have put away so much that you were not able to purchase a house before then
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How many months' worth of money is typically recommended that you save in an emergency fund?
one to two
three to six
No matter how far along you are to your goal of becoming a millionaire, you can still run into unexpected financial hardship. Having an emergency fund will help you live for a few months in the event of a layoff or business failure.
10 to 12
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When investing in other people's businesses, what type of business should you look at?
something you already know about
If you are familiar with the type of business you invest in, it will make you a more informed investor. This can help you to get into a company before it becomes popular and goes up in price.
one in an industry that is popular
one with a stock price that recently has gone up
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What type of people often waste money due to not using a budget?
people who have enough money to live on each month
Even though these people might not feel the immediate need to budget, they may still be hurting their future by wasting money instead of saving or investing it.
people who barely make enough to cover their expenses each month
people who own their own businesses
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When trying to eliminate debt, which should you try to pay off first?
the smallest one
After you eliminate your smallest debt, you can add what you were paying on it each month to your nest smallest one and eliminate it more quickly.
the oldest one
the largest one
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In addition to passion for the field, what can make the difference between starting a successful business or one that fails?
finding an unfilled niche
A successful business does not have to be one that reinvents the proverbial wheel. If you can find a business that meets a need that has been overlooked, you might be able to achieve your millionaire dreams.
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maintaining a large amount of liquid assets
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More billionaires are born under what astrological sign than any other?
Aries
Virgo
Much like being born to rich parents, your astrological sign is something you have no real control over. But maybe you should start planning if you want your children to have a chance of becoming rich!
Scorpio
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What is the easiest source for free money?
employer-matched contributions to your retirement accounts
If your employer matches contributions to your 401(k) or IRA, you should make sure to contribute the maximum that you are allowed.
federal grants
savings account interest
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What can you do to ensure that you save enough money each month to meet your goals?
Set up an automatic deposit from your paycheck.
By having your savings taken out of your paycheck up front, you won't miss them as much since you'll never actually see them in the first place.
Maximize your 401(k) deposits.
Hang a note with your goals on your refrigerator.
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What is another way to increase your savings without feeling it on a daily basis?
Increase your monthly savings deposits following a raise.
When receiving a pay raise, many people want to go out and spend it right away. If you increase your savings instead, you won't feel a loss of any kind since your lifestyle won't really change.
Find one item each month on which you can spend less.
Gradually increase your savings deposits by a small amount each month.
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You Got:
/20
Jose Luis Pelaez Inc/Blend Images/Getty Images
