How the top 5% do it?

[kgtest]

I thought this BI article was interesting,
Apparently Thomas C. Corley spent 5 years studying how the top 5% accomplished what they did.

https://www.businessinsider.com/how-people-get-rich-paths-to-wealth

Thought it was interesting 1/3 never got a college degree but only 15% of them did it by working less than 50hr weeks.

Over 1/2 were entrepreneurs who regularly saved 20%+ of there modest incomes.

 

[Senator]

Interesting.

I would like to see an article addressing the factors that prohibit a 'normal' person from getting out of the bottom 50%...

 

[MichaelB]

Interesting.

I would like to see an article addressing the factors that prohibit a 'normal' person from getting out of the bottom 50%...

A topic for a different thread, perhaps.

I thought this BI article was interesting,
Apparently Thomas C. Corley spent 5 years studying how the top 5% accomplished what they did.

https://www.businessinsider.com/how-people-get-rich-paths-to-wealth

Thought it was interesting 1/3 never got a college degree but only 15% of them did it by working less than 50hr weeks.

Over 1/2 were entrepreneurs who regularly saved 20%+ of there modest incomes.

Interesting. Thanks for the summary, I can’t see the article because it won’t display where there’s an adblocker

 

[Dtail]

Not part of the 5%, but all the top managers in my last firm all had one thing in common and that was at some stretch in their careers, they worked 60+ hours a week for long periods of time.

 

[bclover]

thanks, big takeaway... none of them are easy.

I totally agree with @dtail though, especially with the big company exec. my late hubby had a great salary, he also had years where he worked 10-15 hour days every day.

 

[calmloki]

"If you were to boil it down, the rich became rich by pursuing wealth in at least one of four ways — though I found there to be overlap between all four paths:

49% were Saver-Investors, or average people with modest incomes who consistently saved 20% or more of their income and prudently invested their savings over a period of 32 years
18% were Big Company Senior Executives
7% were Virtuosos, or top experts, in their field
51% were Dreamer-Entrepreneurs (Twenty-seven percent of these Dreamer-Entrepreneurs failed at least once in business)"

Guess I'm a joint member of the Saver and Dreamer gangs. Also American, tall, deep voice and male, which the author neglected to mention as contributors to success.

 

[Mdlerth]

Anyone can be president, but not everyone

From the article:

Working for a big company and rising up the ladder into senior management is another path to riches...This path is also not for everyone.

Duh. The last time I counted, there were about 500 CEO positions in the Fortune 500. With a workforce of about 160 million, that makes the odds about 320,000 to 1 against. Not for everyone, indeed.

By comparison, there are 32 NFL teams, with 53 players per team. Statistically I had a better chance of playing pro football than becoming CEO. Put me in, coach!

 

[dirtbiker]

I thought this BI article was interesting,
Apparently Thomas C. Corley spent 5 years studying how the top 5% accomplished what they did.

https://www.businessinsider.com/how-people-get-rich-paths-to-wealth

Thought it was interesting 1/3 never got a college degree but only 15% of them did it by working less than 50hr weeks.

Over 1/2 were entrepreneurs who regularly saved 20%+ of there modest incomes.

I hope to be one of the 15% working less than 50 hour weeks. I'm currently working about 40 hours a week, sometimes less. However, for the last 7 years I was working in the range of 60-100+ hours per week. So maybe that's just paying my dues! I'm hoping to never consistently work over 50 hours a week again in my life, and I've got over two decades of working left.

But I am tucking away 25% every month. Once student loans are paid off, I hope to increase that to 35-40%. I'd rather spend less than work more.

 

[brett]

I worked 10-12 hrs a day. Lots of travel on my own time. Lived below our means. Invested wisely. Paid well, bonus' and stock options.

Suddenly, at 58/59 I realized we were there.

I am not special, not particularly talented. Got an education, took advantage of opportunities as they came along, made some sacrifices in terms of relos, worked hard, and most important married well. My spouse took care of many things while I was working and/or travelling on business. Plus, she knew the value of a dollar, did not care about the Jone's.

Most important of all....... I enjoyed my work. When I got bored I moved on to other challenges.

 

[OldShooter]

The problem with all of this kind of study is that they do not include people who are not in the top 5%, but who may have all of the same attributes. The attributes that the guy picked out may be completely uncorrelated with success. It's really junk science.

This was/is the problem with "Millionaire Next Door" and, when new, it took quite a bit of justified criticism from academics.

IMO most people are successful primarily due to luck, starting with picking the right parents. Being born in the USA, white, male, and to a middle or upper class family is basically like winning the lottery before pooping in a diaper for the first time. Being tall turns out to be correlated with being a CEO, too. So be sure to be born tall.

No matter how hard he works, no matter how diligently he saves, no matter what talents he has, the garbage picker in Mumbai is never going to be president of General Motors.

 

[marko]

I was one of the executive types. Sixty hours a week was expected; you tended to also work 2-3 hours each day on weekends and holidays. (It's not Thanksgiving in China). Because a lot went on in Europe and Asia, I had to also call-in/video meetings from home at 2-3 AM sometimes.

In my case, I also traveled internationally 200 days a year, so I'm not sure if not being home counts as 24 hours of 'work' or just the 16 I had to put in.

Long hours, days and horrific jet-lag but it was all worth it! Really.

 

[Dtail]

The problem with all of this kind of study is that they do not include people who are not in the top 5%, but who may have all of the same attributes. The attributes that the guy picked out may be completely uncorrelated with success. It's really junk science.

This was/is the problem with "Millionaire Next Door" and, when new, it took quite a bit of justified criticism from academics.

IMO most people are successful primarily due to luck, starting with picking the right parents. Being born in the USA, white, male, and to a middle or upper class family is basically like winning the lottery before pooping in a diaper for the first time. Being tall turns out to be correlated with being a CEO, too. So be sure to be born tall.

No matter how hard he works, no matter how diligently he saves, no matter what talents he has, the garbage picker in Mumbai is never going to be president of General Motors.

Probably correct at the extremes.
However as one example, had a friend in college whose parents spoke 10 words of English and came from a lower middle class upbringing.
He worked full time in college, while taking a full course load, plus assisting parents with their language issues with many tasks.

He received a top internship and went unto a successful career. Not the CEO, but you get my point.

 

[dirtbiker]

The problem with all of this kind of study is that they do not include people who are not in the top 5%, but who may have all of the same attributes. The attributes that the guy picked out may be completely uncorrelated with success. It's really junk science.

This was/is the problem with "Millionaire Next Door" and, when new, it took quite a bit of justified criticism from academics.

IMO most people are successful primarily due to luck, starting with picking the right parents. Being born in the USA, white, male, and to a middle or upper class family is basically like winning the lottery before pooping in a diaper for the first time. Being tall turns out to be correlated with being a CEO, too. So be sure to be born tall.

No matter how hard he works, no matter how diligently he saves, no matter what talents he has, the garbage picker in Mumbai is never going to be president of General Motors.

Do you really think that the attributes of working hard and saving a large percentage of one's income is uncorrelated with success? I mean come on.

Okay fine, being born in the USA or other industrialized nations is luck. So is being born into a middle income or higher family with good genetics. But after that, it's mostly hard work and perseverance. Sure, people get lucky along the way; they also get unlucky too. Most wealthy people didn't inherit the money or win the lottery. They work hard.

 

[NW-Bound]

Working hard is a necessary requirement, but not a sufficient condition.

People who are laid back and taking it easy will not become a CEO.

But plenty of people who work hard do not get to be CEO.

 

[Ronstar]

Everyone I know in the top 5% worked hard to get there. Lots of hours. And they were minimal spenders and maximum savers.

 

[OldShooter]

Do you really think that the attributes of working hard and saving a large percentage of one's income is uncorrelated with success? I mean come on.

I didn't say that. It seems intuitive that there is some correlation but there are many people who work hard and save but still do not achieve financial success. So I think the correlation is probably weak.

But my point is that the kind of junk science referenced in the OP's post tells us nothing. IIRC you are a physician; you certainly understand how competent studies are designed and conducted.

Okay fine, being born in the USA or other industrialized nations is luck. So is being born into a middle income or higher family with good genetics. But after that, it's mostly hard work and perseverance. Sure, people get lucky along the way; they also get unlucky too. Most wealthy people didn't inherit the money or win the lottery. They work hard.

I disagree on the "mostly." For example, I was born with all that USA/white/male luck and a physician father in a stable family, but I got my launch at megacorp because I spent a lot of time playing gomoku with a Taiwanese friend in the back row of graduate school classes. One day he said to me "Megacorp is looking for another part-time student electronic technician. I can give you the contact if you are interested." From that luck a career was launched. I was qualified for the job because I had both ham radio and FCC commercial radiotelephone licenses. I got interested in electronics because my uncle, an inveterate garage sale shopper, spotted, bought, and gave me an ancient short wave radio when I was in 7th grade. More luck. I also have enjoyed excellent health, never even dying along the way to FI. More luck.

 

[jollystomper]

I disagree on the "mostly." For example, I was born with all that USA/white/male luck and a physician father in a stable family, but I got my launch at megacorp because I spent a lot of time playing gomoku with a Taiwanese friend in the back row of graduate school classes. One day he said to me "Megacorp is looking for another part-time student electronic technician. I can give you the contact if you are interested." From that luck a career was launched. I was qualified for the job because I had both ham radio and FCC commercial radiotelephone licenses. I got interested in electronics because my uncle, an inveterate garage sale shopper, spotted, bought, and gave me an ancient short wave radio when I was in 7th grade. More luck. I also have enjoyed excellent health, never even dying along the way to FI. More luck.

As someone who is not white, whose parents were not born in the US, and who grew up in one of the worst ghettos in the US, I have found that forgetting that some of this "luck" comes down to taking advantage of opportunity. In many of the things mentioned, the individual was able to make a choice. Had a different choice been made, "luck" would not have happened. DW (who has a similar background to me) and I have thought of hundreds of people we have known over the years who deliberately made choices to hurt themselves... yet call our choices to not do the same thing "luck".

For example, one guy who I started college with, same background, same opportunity to go to an Ivy League school... but once he got there, chose to skip classes, party, and despite me and others willing to help him, ignored us and eventually dropped out. Today he is bitter and complains about the "institutional racism" he encountered in college hat prevented him from getting ahead... but all of us who knew him back then know the truth.

I believe in the statement "luck is when preparation meets opportunity"... and true there are some with disadvantages, but there are some who choose not to take advantage of opportunities and then complain about others "luck" who did. There are no guarantees in life, but there are things one can still choose do to improve the odds.

 

[dtbach]

I agree that the study is pretty much junk research. You could also have people who do all that stuff who didn't get close to being in the 5%. Perhaps he even talked to many of these but left them out of his study.


- savers/investors: you have to have enough $$ to put relatively significant funds in and hope that what you bought did well. A sick child, job loss at bad time, poor investment return, etc can make one a winner and the other not so much.


-Big Company Senior Executives: Probably the best odds of being in the 5% but again, depends on company, your boss (does he like you or not so much), the industry you are in and how the economy affects that sector, etc.


-Virtuosos, or top experts: crap shoot. Totally depends on sector you chose.


-Dreamer-Entrepreneurs: A real gamble "do you feel lucky punk?" More variables than most can juggle. Some do great, others (and probably more than any other category) fail.

 

[travelover]

.........IMO most people are successful primarily due to luck, starting with picking the right parents. Being born in the USA, white, male, and to a middle or upper class family is basically like winning the lottery before pooping in a diaper for the first time. Being tall turns out to be correlated with being a CEO, too. So be sure to be born tall............

This has also been my observation. At MegaMotors, the top executives were almost all over 6' 3" - it was almost laughable to see them all in one photo. It looked like a men's basketball team in suits.

 

[OldShooter]

As someone who is not white, whose parents were not born in the US, and who grew up in one of the worst ghettos in the US, I have found that forgetting that some of this "luck" comes down to taking advantage of opportunity. In many of the things mentioned, the individual was able to make a choice. Had a different choice been made, "luck" would not have happened. DW (who has a similar background to me) and I have thought of hundreds of people we have known over the years who deliberately made choices to hurt themselves... yet call our choices to not do the same thing "luck".

For example, one guy who I started college with, same background, same opportunity to go to an Ivy League school... but once he got there, chose to skip classes, party, and despite me and others willing to help him, ignored us and eventually dropped out. Today he is bitter and complains about the "institutional racism" he encountered in college hat prevented him from getting ahead... but all of us who knew him back then know the truth.

I believe in the statement "luck is when preparation meets opportunity"... and true there are some with disadvantages, but there are some who choose not to take advantage of opportunities and then complain about others "luck" who did. There are no guarantees in life, but there are things one can still choose do to improve the odds.

Oh, I don't disagree with any of that. Uncle Pat's lucky radio did not make me an electrical engineer; I had to work for that. But it did serendipitously launch me in the right direction.

Re your story, I would guess that you had to work harder than some of us who had improved odds. Regardless of what combination of luck, skill, and hard work put you where you are, it's great to hear the story.

 

[ckelly78z]

I am fine with being in the "normal" range because I refuse to work 10-15 hours a day for Megacorp. I value my home time on the farm more than chasing elusive $$ in the corporate world.

I don't consider myself lucky, but many others do. They are the ones who continue to smoke, drink, cheat on their wives, and live for the day, rather than saving for the future.

I also have the great gift of contentment, and being happy with my wife, kids, home, cars, job, and basically good health regardless of all the life threatening illnesses I have had.

 

[pj.mask]

This has also been my observation. At MegaMotors, the top executives were almost all over 6' 3" - it was almost laughable to see them all in one photo. It looked like a men's basketball team in suits.

Agree. I’m pretty lucky I have the ability and grit to make the smart/hard decisions that put me where I am today. I know so many people who just aren’t capable of making the same decisions/trade off.
I suppose I could say it is all just “hard work” and not “luck” but with that logic (and enough hard work) I’ll be the next Albert Einstein or Shaquille O’Neal! Somehow (sadly) I don’t think any amount of effort would put me in their position.

Although I am lucky, I don’t think that in any way inhibits me from being proud of what I have accomplished so I’m not threatened by admitting it.

 

[UnrealizedPotential]

I think it's a combination of a number of things. Like hard work,luck, consistency,patience and choosing the right vehicle to accomplish all this. One way some get rich is to inherit wealth.

 

[dirtbiker]

I didn't say that. It seems intuitive that there is some correlation but there are many people who work hard and save but still do not achieve financial success. So I think the correlation is probably weak.

But my point is that the kind of junk science referenced in the OP's post tells us nothing. IIRC you are a physician; you certainly understand how competent studies are designed and conducted.

I disagree on the "mostly." For example, I was born with all that USA/white/male luck and a physician father in a stable family, but I got my launch at megacorp because I spent a lot of time playing gomoku with a Taiwanese friend in the back row of graduate school classes. One day he said to me "Megacorp is looking for another part-time student electronic technician. I can give you the contact if you are interested." From that luck a career was launched. I was qualified for the job because I had both ham radio and FCC commercial radiotelephone licenses. I got interested in electronics because my uncle, an inveterate garage sale shopper, spotted, bought, and gave me an ancient short wave radio when I was in 7th grade. More luck. I also have enjoyed excellent health, never even dying along the way to FI. More luck.

This wasn't really a study. It was an article. He didn't link anywhere to his actual research. However, interview based research is a valid form of qualitative research, albeit having inherent limitations. However, that doesn't mean it's junk science.

You highlighted your luck in your personal story. I'd highlight your hard work in order to achieve your success. Maybe your good luck was actually bad luck. Maybe if you didn't have those contacts you would have found something else better. Maybe not. We could never know.

My story was a bit different. I had to pay my own way through college. So I joined the army national guard to pay for college. Before I could start my first semester bad luck (as a large understatement) came in the form of 9/11 and my first deployment. Another round of bad luck (though actually a blessing, as I love my children) was a broken condom that led to an unplanned pregnancy before I ever got a chance to start college. I went to college after my first deployment for 3 semesters, working my butt off for good grades. Then I had another bit of bad luck. Deployment to Iraq for 18 months. I gritted my teeth and did it. Then came back and did 3 more semesters, again working my butt off for good grades. Yet again, more bad luck. Deployment to Afghanistan for a year. I came back and applied to medical schools, graduated college, and went to med school, all while a single father, then residency, then finally to the workforce. Most of my luck was bad luck. Sure I had good luck along the way. Everyone has good and bad luck. But I worked hard. I'm far from my financial goals, but I'm working toward them.

I refuse to attribute all I've worked so hard for to luck. I also think it's a defeatist attitude to attribute so much of success with luck. I would feel differently if I won the lottery and FIRE'd that way.

 

[stepford]

I'm not sure if I count as an example or counterexample. I guess I was in the 5% for the final third of my career. And indeed as that phase of my career began I stepped up my game and worked 6 day / 70 hour weeks for a couple of years in my early 40s.

And got promoted, and got royally sick of it, and started to plan for ER in earnest.

And never worked more than 40 hours a week from age 46 until I retired at 55. But there's a great deal of "salary inertia" in megacorp. Those last 10 relatively slack years were the ones in which I was most firmly in the 5%.