Real estate has created more millionaires than any other asset class. But the full picture is more nuanced than that quote suggests.
You've probably heard some version of it: "90% of millionaires made their money in real estate." The quote gets attributed to Andrew Carnegie, though there's no solid evidence he ever said it. What Carnegie did say was that the majority of wealthy individuals he knew had some connection to land and property. That's a different claim entirely.
Still, the underlying idea isn't wrong. Real estate plays a massive role in wealth creation. So do a few other vehicles that rarely get the attention they deserve. The question worth asking isn't just what creates millionaires—it's how ordinary people use those vehicles to get there.
The Data Behind Millionaire Wealth
Thomas Stanley and William Danko spent two decades studying millionaires for their book The Millionaire Next Door. Their findings shattered the stereotype of flashy spenders with inherited fortunes. Most millionaires they studied were first-generation wealthy. They drove used cars. They lived below their means. And they built wealth through a handful of predictable channels.
According to research from the National Bureau of Economic Research and multiple wealth studies, here's where millionaire wealth actually comes from:
Notice those numbers add up to well over 100%. That's the point. Most millionaires didn't rely on a single wealth source. They combined multiple approaches—often all three of the top categories—and let time do the heavy lifting. If you're curious about that concept, our breakdown of multiple income streams covers it in detail.
The 3 Primary Wealth Paths
Forget lottery winners and tech unicorn founders. For the vast majority of self-made millionaires, wealth came through one or more of these three paths.
1. Real Estate
Real estate sits at the top for a reason. It's one of the only asset classes where you can use leverage responsibly, earn ongoing income, benefit from appreciation, and collect significant tax advantages—all at the same time.
A $200,000 rental property purchased with 20% down means you control a $200,000 asset with $40,000. If that property appreciates 3% annually, you're earning $6,000 on a $40,000 investment—a 15% return before rental income even enters the picture.
Why it works: Leverage + cash flow + appreciation + tax benefits
2. Business Ownership
Two-thirds of millionaires own or owned a business. That doesn't mean they all built billion-dollar companies. Many ran local service businesses, small agencies, medical practices, or franchise operations. The common thread? They owned the equity in something that generated profit.
Business ownership creates wealth because you're building an asset that earns money independently of your hourly effort. A plumbing company with five employees generates revenue whether the owner is on-site or not. That scalability is what separates business income from a paycheck.
Why it works: Equity building + scalable profit + eventual sale value
3. Stock Market Investing
The stock market is the most accessible wealth-building tool available. You don't need special connections or large capital to start. A broad index fund has returned roughly 10% annually over the past century. Someone investing $500 per month from age 25 to 65 at that rate would accumulate over $2.6 million.
The catch? You have to actually stay invested. Studies from CNBC's analysis of millionaire surveys show that consistent investing over decades—not stock picking or market timing—is what builds real wealth through equities.
Why it works: Compound returns + accessibility + true passive growth
You'll notice a pattern here. All three paths reward patience. None of them require a six-figure salary to start. And most millionaires used at least two of them. Our investing hub covers the stock market path in depth if that's where you want to begin.
What This Actually Means for You
Here's the uncomfortable truth most "millionaire mindset" content won't tell you: becoming wealthy is boring. It's decades of consistent behavior. It's choosing to invest instead of upgrade your car. It's reinvesting rental income instead of spending it.
You don't need a huge salary
Stanley and Danko found that the average millionaire in their study earned $80,000 to $150,000 per year. Solid income, sure. But nowhere near the seven-figure salaries people assume. The difference was savings rate and investment discipline, not earnings.
Consistency beats timing
A Fidelity study of their best-performing accounts found something fascinating: the top performers had either forgotten they had accounts or had passed away. Nobody was actively trading. The money just sat there, compounding.
Real estate isn't the only path
Despite the "90% of millionaires" quote, plenty of people build wealth without ever buying a rental property. Index fund investing is simpler, more liquid, and requires zero maintenance. If landlording doesn't appeal to you, that's perfectly fine. Pick the vehicle that matches your temperament and situation. If property does interest you, our real estate section breaks down how to evaluate your first deal.
Reality Check
Most millionaires took 20 to 30 years to build their wealth. The median age of a first-time millionaire in the U.S. is 49. There's no shortcut, no hack, no secret strategy the wealthy are hiding. The formula is earn, save a meaningful percentage, invest consistently, and wait.
Starting with What You Have
The biggest mistake people make after reading about millionaire habits? Waiting until conditions are perfect. They tell themselves they'll start investing when they earn more, or they'll buy rental property once they have a bigger down payment.
Meanwhile, compound interest doesn't wait. Every month you delay costs you more than you'd think.
- $100/month from age 25: ~$632,000 by age 65 (at 10% avg returns)
- $100/month from age 35: ~$227,000 by age 65
- $100/month from age 45: ~$76,000 by age 65
That ten-year head start between 25 and 35 is worth over $400,000 on just $100 per month. The math doesn't care about your excuses. Start now with whatever amount you can manage.
Pro Tip
Start with what you can afford. Even $100/month in a low-cost index fund puts you on the millionaire path if you stay consistent for 30+ years. You can always increase your contributions as your income grows. The critical piece is building the habit today.
Ready to Start Building Wealth?
Explore proven strategies for growing your income and investing it wisely.
Sources & Further Reading
- Thomas J. Stanley & William D. Danko, The Millionaire Next Door (1996)
- CNBC - Here's How the Average Millionaire Built Their Wealth
- National Bureau of Economic Research - Wealth Distribution Studies