Are Millionaires Better at Managing Money or Making It? 3 Experts Weigh In
Written by
Cynthia Measom
Edited by
Amber Barkley
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If you’ve ever marveled at the financial success of millionaires, you may have assumed they’re really good at managing their money. After all, how else would they hold on to it?
Wealth accumulation isn’t just about how many zeros you have on your bank statements; it’s also about making smart financial decisions. But that doesn’t mean that the majority of millionaires are just as skilled at managing their money as they are about amassing it. Sometimes, those who are super wealthy focus more on earning stacks of cash and leave the actual money management to financial professionals.
Here’s what three different financial experts think about whether millionaires are better at managing their wealth or making money.
Are Millionaires Better at Managing Money or Making It?
Spoiler alert: Their opinions are unanimous.
Financial Expert No. 1: Self-Made Millionaires Are Better at Making Money
“Unless a wealthy person inherited their fortune, they’re typically better at making money than managing it,” said Laura Adams, MBA, award-winning personal finance author and expert with Finder. “They may have employees or work with financial professionals who help them manage money, reduce taxes and do estate planning.”
Financial Expert No. 2: Millionaires Excel at Making Money
Ben Klesinger, co-founder and CEO of Reliant Insurance Group and Helping Hand Financial, also said that extremely wealthy people are generally better at making money than managing it.
“They excel at identifying and capitalizing on opportunities, whether it’s through strategic business ventures or investments,” he said. “For example, a client of mine, a successful property developer, significantly increased his wealth by investing in emerging real estate markets and using innovative financing techniques. However, when it came to managing that wealth effectively, complexities arose, highlighting the need for comprehensive financial planning and risk management.”
Financial Expert No. 3: Millionaires Are Brilliant at Making Money
Alec Kellzi, CPA at IRS Extension Online, said that in his experience, he’s noticed that the skills required to build serious wealth from the ground up are often quite different from what it takes to preserve and grow that fortune over generations.
“The self-made ultra-rich tend to be brilliant entrepreneurial risk-takers,” he said. “They have the vision, hustle and appetite for risk to start a successful business or capitalize on a market opportunity. Making it big requires an aggressive, entrepreneurial mindset.
“But once that ship has sailed into the harbor, hanging onto the riches is a whole new ballgame. At that level of wealth, investing becomes about playing world-class defense. It’s more about preservation through diversification, creative tax avoidance strategies, securing the family legacy and managing risk.
“These wildly successful people usually are not dabbling in the markets themselves at that point. They rely on teams of elite advisors and analysts to safeguard their assets across multiple investment vehicles and asset classes.”
The Takeaway
Overall, the financial experts agree: Millionaires are generally better at managing their money than making it.
One exception, however, is if the millionaire inherited their fortune instead of being self-made — in that case, the person might be skilled at both making and managing their wealth.
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