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Based On The Book: Why The Rich Are Getting Richer
1. Millionaire Employee
Each year, the millionaire employee gets a millionaire dollar salary, but they only bring home about $600,000 after taxes.
2. Millionaire Sports Star
The millionaire sports star could have a lucrative multi-million dollar contract, but they’re usually only bringing home a net income of $300,000–$500,000 a year due to jock tax laws. More importantly, many athletes go bankrupt after five years because they lack financial education.
According to a 2009 Sports Illustrated article, 35% of National Football League (NFL) players are either bankrupt or are under financial stress within two years of retirement, and an estimated 60% of National Basketball Association (NBA) players, 78% NFL players,[2] and a large percentage of Major League Baseball (MLB) players (4x that of the average U.S. citizen)[3] go bankrupt within five years after leaving their sport (Source: Wikipedia).
3. Millionaire Movie Or Rock Star Or Entertainer
The millionaire entertainer’s career can almost be up to their fans. Ever notice how some celebrities seem to disappear off the face of the earth? They’re no longer mainstream because their popularity has plummeted. These folks are also usually bringing home a net income of $300,000–$500,000. Their income and careers can be unstable due to a flaky and unpredictable fanbase.
4. Millionaire Entrepreneur
Interestingly enough, many entrepreneurs don’t earn as much as their employees or as much as people (or even themselves) think. After taxes and business expenses, these folks can end up with only $300,000 left.
5. Networth Millionaire
These millionaires are the ones who include their house in their net worth. I’m sure you’ve heard of these folks. You might be one yourself. Often these people have salaries under $200k, and they factor in all their liabilities, aka depreciating “assets” (car, house, and other toys), into their net worth.
6. Capital Gains Millionaire
The issue with the capital gains millionaire is they must sell assets to access income, which leads to capital gains tax. Capital gains taxes can fall anywhere between 10–20%. A hefty price tag.
7. Lucky millionaire
The lucky millionaire wins the lottery, marries into money, or inherits their wealth. Some can manage their new financial lifestyle prudently; most don’t. Then, of course, you have people who do everything they can to marry someone with money, but at what cost?
8. Cash Flow Millionaire
The cash flow millionaires keep cash flowing into their pockets without selling a single asset. These folks often own property, have steady royalties coming in, or something that falls into similar categories as these two. The big win here is the consistent flow of money without investing any effort.
This type of millionaire is time-wealthy and cash-wealthy; it’s always best to have both. The cash flow millionaire is the best type of millionaire to be.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.