The Super Rich Start Saving Super Early

They also start investing in stocks at a young age.

Lisi Niesner / Reuters

There are two personal-finance chestnuts in nearly every article about saving money: Putting money away (instead of spending it) is difficult, and people should generally save more than they already do. But despite these truisms, one subset of Americans seem to be doing pretty well at saving: the super wealthy.

This may not seem all that surprising, but the reason isn’t simply that they have more money to save. According to a new survey by Bank of America U.S. Trust, the bank’s private wealth management arm, many wealthy individuals in the U.S. start saving in their teenage years. The report, “Insights on Wealth and Worth,” surveys nearly 700 people and offers an inside look at the attitudes and behaviors of ultra-high-net-worth individuals. The survey’s respondents have at least $3 million in assets, and 30 percent have more than $10 million.

The report offers some insights into the kind of financial discipline and responsibility taken up by wealthy individuals in their early years. On average, respondents said they started saving money at the age of 14—which is actually not that rare, as another, broader, survey found that over 52 percent of American teenagers report having some kind of savings account. It’s worth noting that many wealthy people are born rich, and the fact that they started saving early is likely more the result of their backgrounds than it is a sign of any special abilities that would lead to wealth.

What is rare is the average age when these individuals started working and investing in stocks—15 and 25 years old, respectively. Both of these figures are unusual given that the basic minimum age for employment is generally 16 years, and, according to a Fed report, only 13.8 percent of U.S. households own stocks.

The survey also sheds some light on how these individuals accumulated so much wealth. On average, the survey’s respondents estimated that 52 percent of their wealth came from income, while 10 percent came from inheritance, and 32 percent from investments. Other reports on wealthy Americans suggest that a lot of this wealth goes into savings. It’s in adulthood when the personal savings gap between average Americans and wealthier ones seems to widen significantly. Data from the U.S. Bureau of Economic Analysis indicates that the national personal saving rate—the percent of a person’s disposable income that goes into savings—is currently 5.4 percent. However, for America’s wealthiest 1 percent, that rate is as high as 51 percent.

So why are the wealthy so good at saving money? It’s not just that they have ample funds to do so. Researchers who study the wealthy have long suspected that it might have something to do with the way wealthier parents teach their children about money, which then shapes their financial lives well beyond childhood. While most of the respondents in the Bank of America report said they grew up in a middle-class household, 68 percent of these wealthy individuals, when asked about their parents’ values, said that their families prioritized financial discipline nearly as much as academic achievement (and way ahead of things like civic duty, creative expression, or athleticism).

A broader question is whether saving up one’s riches helps or hurts the economy at large. Personal-finance experts may lament how low America’s savings rate is, but macroeconomists worry that a spike in savings could mean a slowdown in consumer spending. A McKinsey report estimated that each percentage point increase in the savings rate translates into $100 billion less of consumer spending if incomes fail to rise. If being or becoming wealthy has a lot to do with not spending money, that’s potentially worrying for economic growth.