My Rich Habits study has received international attention in the media. Newspapers, magazines, online sites, TV, radio and podcasts in 25 countries, so far, have shared bits and pieces of my research. As a result, I have received tens of thousands of emails and comments (blogs). The vast majority of the emails and commentary have been very supportive of my efforts. However, there are many who have been, and continue to be, offended by my research. My critics, I learned, do not like the fact that my research concludes that your daily habits are the cause of wealth or poverty. They don’t like this because it places the onus of poverty on the very shoulders of the poor. They don’t like this because it means that your financial circumstances in life are determined by your habits. If you are personally responsible for the circumstances of your life, this means you have no one to blame but yourself. My critics emphatically believe that poor people are victims. Victims of society, victims of the predatory rich, victims of government policies, victims of …. fill in the blank. I believe my critics are either lost in ideology or are pushing some agenda and my research throws a wrench into their ideology or their agenda. It forces them to confront a truth they do not want to hear – you are the cause of your poverty.
I have been asked by many friends and foes for some background on my study. So, here it is.
I applied my CPA-specific skills, skills that are unique to CPAs, in gathering and analyzing the data from my study. These skills are different from the skills of scientists, economists and behavioral experts who conduct studies for a living. I acknowledge that my study methodology and approach very likely deviates from the study methodology and approach of those who conduct studies for a living. These individuals have created specific rules and methodologies that they use to help guide them in conducting their scientific or economic studies. CPA’s have also created specific rules and methodologies that guide us in our profession. I used those skills to answer two questions:
Why are some people rich and some people poor?
What do the rich and the poor do from the moment they wake up in the morning to the moment they go to bed at night?
Below is a good summary of my study:
- I interviewed 233 wealthy individuals and 128 poor individuals over a 3 year period beginning in March 2004 and ending in March 2007.
- Of the 233 millionaires, 177 were self-made millionaires and 56 inherited their money.
- Of the 177 self-made millionaires, 105 (59%) came from middle-class households and 72 (41%) came from poor households.
- I spent another 16 months analyzing and summarizing the data, completing my initial analysis sometime around August – October 2008.
- Rich Group: $160,000 in Annual Gross Income and $3.2 million in Net Assets.
- Poor Group: Less than $35,000 in Annual Gross Income and less than $5,000 in Liquid Assets.
- About 50% of the responses were physical meetings and the rest were via phone interviews and/or emails.
- None of the subjects were aware they were being interviewed as I was trying to control for individual bias in their responses. Experts call this a blind study.
- I asked them 20 broad questions (144 sub-questions) re: their daily activities. When you do the math, and I did, that equals 51,984 total questions.
- I tracked their responses in individual physical folders and subsequently transferred the data to two large excel worksheets for each group. I then consolidated these into what has become my Research Summary schedule. If you’d like a copy let me know.
- I analyzed their responses over a 16 month period, accumulating them in individual folders and then broke these down into specific categories. I continued to analyze the data for 6 more years after completing the initial analysis. To date, I have documented 334 categories, or 334 different habits, behaviors, thinking and choices of both groups.
- Most of the interviews were geographically distributed as follows: 50% northeast, 20% southeast, 10% midwest and the balance scattered across the country.
- Racially the mix was: 80% Caucasian with the balance Spanish, Portuguese, African American and other.
- 19% were Jewish and the balance primarily Christian.
- In the wealthy group, 214 were men the rest women. In the poor group 114 were men, the rest women.
- Ages ranged from 42 to 85. 60% were age 60 or older.
I gathered data for both groups regarding their careers/employment, the % born to wealth, poverty or the middle-class, spending habits, academic performance, education, perceptions of wealth/poverty, various health data, inherited money data, gambling habits, home ownership, car ownership, reading habits, relationship management, savings habits, self-improvement habits, time management habits, beliefs, vacation habits, volunteering habits, networking habits, voting habits, work-related data.
For about one year I spoke to nearly 2,000 high school and college students around the New York metropolitan area, sharing my research. I realized that that approach would never allow me to get this important research out there to the millions in the world who were struggling with poverty. So, I decided to write a book about what I learned from my research. Over the past 8 years I have written 4 such books. Three became international bestsellers in 6 countries. My 4th book is scheduled for release in July 2016. I’ve given away more than 2,000 books to those that need them the most, the poor.