NEW YORK (TheStreet) -- How do you become a millionaire? There are many ways, of course, but to hear millionaires themselves tell it, saving is the most common path, beating out investments, inheritance or marrying a sugar daddy (or mama).
That's what PNC Financial Services Group found when it interviewed 923 millionaires last fall. The findings may prove heartening to ordinary folk seeking financial security, even if they don't attain millionaire status. It seems there's no magic formula, and saving is a technique available to anyone who's not living paycheck to paycheck.
Asked what "decision" had most influenced their financial success, 56% of those polled cited saving early and regularly. Next came controlling spending and good investment decisions (each named by 38%), followed by earning a lot of money (26%), inheriting (12%) and marrying someone with money (3%). (The figures add up to more than 100 because some millionaires credited more than one factor.)
Asked a slightly different question about the "influences" that helped them become millionaires, 65% said hard work, 16% said good decisions, 8% said discipline and 7% said luck.
These last findings might be taken with a grain of salt, as people like to attribute their success to personal virtues rather than luck. It's also worth remembering that being a millionaire isn't what it used to be. The super wealthy, as opposed to mere millionaires, might put starting a business or inventing a product above run-of-the-mill saving.
Still, the benefits of saving more each month are rooted in simple math. Using the Savings Goal Calculator, you can find two ways to accumulate $1 million over 30 years. With a 12% return, you could get there by saving $325 a month. But since 12% would be hard to achieve, you could also get there with an 8% return if you increased your monthly saving to $705.
In other words, by saving more, you can reach the goal with a more modest return -- one that would be easier to achieve, and with less risk. If returns were better than expected, well, you'd just hit your goal sooner, or build a bigger nest egg.
And the millionaires are also right about the value of starting early. To get a million by age 65 with an 8% return, you'd need to save $308 a month if you start at 25, but $1,093 a month if you wait until 40.
Saving early and often also gives the saver resources to jump on opportunities that can otherwise be missed. Those might be good investments, a chance to start a business or to get more education.
Indeed, the value of having resources was highlighted during the financial crisis, when tens of millions of homeowners found their homes were worth less than they owed on their mortgages. Many of these folks were trapped, unable to move for a better job because selling the home would not enable them to pay off their loan. But those who had built up other assets could make up the difference and move on.
Using a higher savings rate to become a millionaire is a simple strategy -- far easier than buying sow bellies or gambling on stock options or foreign currencies. It does, however, entail some risk, as bank savings and other cash holdings earn almost nothing.
But an investor who doesn't want to become a stock market expert can pick from a wide array of fire-and-forget options such as index-style mutual funds and target-date funds, products that will grow in pace with the broad stock and bond markets.