Interesting data on millionaires published by James Pethokoukis of the American Enterprise Institute:
Numerous studies have shown that millionaire status appears to be fleeting or episodic, because many people become “millionaires” as the result of a one-time even such as the sale of a business or stock. Indeed, a recent Tax Foundation study found that between 1999 and 2007, about 675,000 taxpayers earned over $1 million for at least one year. Of these taxpayers, 50% (about 338,000 taxpayers) were a millionaire in only one year, while another 15% were millionaires for two years. By contrast, just 6% (38,000 taxpayers) remained millionaires in all nine years.
This data made me think of the saying that “neither success nor failure is permanent.” Of course, many of these people could have dropped below millionaire status, but remained very high earners. That said, this does underscore the importance of not squandering a big pay day. Sadly, this seems to have been lost on many professional athletes as one recent study estimated that 78% of NFL players are bankrupt or in severe financial distress within two years of retirement and 60% of NBA players are broke within five years of retirement.
[...] Millionaire Status Is Fleeting As I told someone yesterday who asked for general investment advice, the most important thing you can do is not make big mistakes. Random ups and downs will tend to even out, but the serious screw ups are just too hard for blind luck to overcome. [...]