Dave Sather's Money Matters: Unlocking the keys to financial success

At least once a year, my Texas Lutheran University students have a quiz about who has real wealth in our country and how they achieved their status.

Inevitably, a variety of responses involve the lottery, lawsuit winners, rock stars, pro athletes and TV personalities. Sadly, modern media gives the impression that the only way to success and financial stability is to be the next LeBron James or Kim Kardashian. Nothing could be further from the truth.

Making matters worse, wealth accumulation has become a target for a variety of political figures. One often gets the impression that the outcome of financial discipline and success should be vilified instead of celebrated.

Furthermore, many think you must be a rocket scientist to be financially comfortable. Although a good education will give you a head start, many of our most successful clients were born out of the World War II generation. Quite often, they had no formal education. Instead, they just kept their heads down, worked hard and saved day in and day out.

There is also the belief that most wealth in our country is inherited. This is simply not the case. In repeated studies, the percentage of millionaires who inherited their wealth is between 12 percent and 14 percent. The other 86 percent to 88 percent earned their wealth generally via entrepreneurship.

The book "The Millionaire Next Door" helped to dispel many stereotypes, as it documented and quantified who was wealthy and how they became wealthy. That research showed that your neighbor who drove a pickup truck, worked 12-hour days and lived a frugal life was more likely to be a millionaire. However, that data is now 20 years old, and many wonder if times have changed.

Recently, books such as "Financial Fitness Forever," "How Rich People Think" and "The Eventual Millionaire" as well as studies by PNC Wealth Management have delved back into the topic of who is rich and how they got there.

In assessing their collective research, the keys to success are downright boring.

First, save early and regularly. If you want financial stability, you don't wake up at age 50 and say, "I'm going to get serious now."

Wealthy people start investing early and save consistently over decades. It is a consistent habit. They are not trying to get rich overnight. It is a gradual process over long time frames.

It helps to devise a plan and then stick to it - in all markets, good and bad. Write out your plan and review it annually. If the financial markets get scary, wealthy people don't back away. If anything, they use this as an opportunity to save and invest more.

According to the PNC study, most millionaires say the greatest influence upon their success was "hard work," whereas only a mere 7 percent said that "luck" was their top influence. As I think about the people who cited "luck" as their top influence, I am reminded of a quote from an interviewee in "The Millionaire Next Door" who said, "The harder I work, the luckier I become."

Another common theme throughout these books is the ability to control spending or live below one's means. We are bombarded by repeated advertising telling us what to buy and how a given product is a must-have.

In reality, millionaires have successfully differentiate what they need from what they want. They are in control of their destiny, as savings is a top priority - not consumption.

This also means they don't allow leverage or borrowed money to control them. When things go well, the benefit of borrowed money is incredibly seductive. However, when things turn, the burden of leverage can wipe you out. Most millionaires are very careful about if and how they use debt.

Maintain patience and persistence. Most millionaires are not worried about today. Rather, their planning and perspective is one that looks decades down the road. This allows them to focus on the big picture without getting rattled about day-to-day fluctuations. This also allows logic and discipline to trump emotion and irrationality.

In assessing the characteristics of the average American millionaire, it is reassuring that most of these factors are within an individual's control.

Furthermore, it reaffirms that despite what the media or politicians tell us, the American dream is alive and well.

Finally, investing and financially sound behavior should not be looked down upon but rather held in high esteem.

Dave Sather is a Victoria certified financial planner and owner of Sather Financial Group. His column, Money Matters, publishes every other week.