“The substantial canons of the leisure-class scheme of life are a conspicuous waste of time and substance and a withdrawal from the industrial process.”
Ever since Thorstein Veblen wrote The Theory of the Leisure Class in 1899, wealthy Americans have been under assault. Veblen had nothing good to say about the so-called idle rich and robber barons—they were predatory, wasteful, and ostentatious. Politicians and Hollywood producers have followed up by portraying the rich as big spenders who use drugs, engage in white-collar crime, avoid taxes, and dump their original mates in favor of trophy wives.
Now a new study by Thomas J. Stanley, former professor of marketing at Georgia State University, shows that this pejorative image of wealthy Americans is profoundly mistaken. According to his new book, The Millionaire Mind, millionaires are model citizens. Here are the results of his survey of over 1,000 millionaires:
- They live far below their means and have little or no debt. Most pay off their credit cards every month; 40 percent have no home mortgage at all.
- They are frugal. They prepare shopping lists, resole their shoes, and save a lot of money. But they do not live Spartan lives.
- Ninety-seven percent are homeowners; they tend to live in fine homes in older neighborhoods. (Only 27 percent have ever built a custom home.)
- Ninety-two percent are married; only 2 percent are currently divorced. Millionaire couples have less than one-third the divorce rate of non-millionaire couples. The typical couple in the millionaire group has been married for 28 years and has three children. Nearly 50 percent of the wives do not work outside the home.
- Most are one-generation millionaires who became wealthy as business owners or executives; they did not inherit wealth.
- Almost all are well educated: 90 percent are college graduates and 52 percent hold advanced degrees. However, few graduated top in their class; most were “B” students. They learned two lessons from college: discipline and tenacity.
- Most live balanced lives; they are not workaholics: 93 percent listed socializing with family members as their number one activity; 45 percent play golf.
- Fifty-two percent attend church at least once a month, 37 percent consider themselves deeply religious.
- They share five basic ingredients to success: integrity, discipline, social skills, a supportive spouse, and hard work.
- Sixty-four percent contribute heavily to charity, church, and community activities.
- Their number one worry: taxes! Their average annual federal tax bill: $300,000. The top one-tenth of 1 percent of U.S. income earners pays 14.7 percent of all income taxes collected!
- “Not one millionaire had anything nice to say about gambling.” But 33 percent have played the lottery at least once during the year!
Thus we see how the upper-income families of this nation are not the ones contributing to crime, welfare, divorce, child abuse, and a spendthrift society. But they are paying a lot of taxes and making a lot of contributions to solve these social problems.
Stanley is famous for his previous best-seller, The Millionaire Next Door (Pocket Books, 1998). His research revealed that most millionaires in America appear ordinary; they own modest homes and drive older cars. But they work hard, save a lot, and make their own investment decisions. In other words, the guy living next door may be a millionaire.
Although Stanley did not cover this issue, I’ve also seen studies indicating that higher-income individuals live, on average, five to ten years longer than the average American (76 years) and enjoy better health, fitness, and quality of life. They aren’t the ones causing Medicare to go bankrupt.
The existence of a wealthy class provides numerous benefits to the entire economy:
- Wealthy people are the first to buy new consumer products. They are the only ones who can afford to buy automobiles, computers, cell phones, and other technological breakthroughs when they are first introduced as high-priced prototypes. The profits from the wealthy consumers are used to expand operations and cut prices so that eventually everyone can afford them. As Andrew Carnegie said, “Capitalism is about turning luxuries into necessities.” Inequality of income makes this possible.
- The wealthy class is the main source for investment capital. The rich provide the capital base for investing in new technologies, improved production processes, and job creation. Without the wealthy, there would be little surplus wealth for an expanding economy.
- The rich help finance higher education, libraries, churches, galleries, and charitable organizations.
Instead of bashing the rich, let’s salute them. If indeed the wealthy are such good citizens, as Stanley’s work suggests, we should aim not to impoverish the rich, but rather to enrich the poor.
- Thorstein Veblen, The Theory of the Leisure Class (New York: Penguin Books, 1994 ), p. 334.
- For an excellent review of Veblen’s philosophy, see John Patrick Diggins, Thorstein Veblen: Theorist of the Leisure Class (Princeton, N.J.: Princeton University Press, 1999 ).
- Thomas J. Stanley, The Millionaire Mind (Kansas City: Andrews McMeel, 2000), p. 375.
- Ibid., p. 11.