What it takes to become a multimillionaire

What do you need to become a multimillionaire?

Ambition, a strong work ethic and financial discipline, according to a new survey of people with $3 million or more in invested assets. Nearly one in eight multimillionaires say their parents were poor or middle class, but were also firm disciplinarians who expected their offspring to work, save and achieve academically.

"Their advantage in life is not some rare financial privilege, but a sense of discipline and optimism that has equipped them to make the most of every opportunity," said Keith Banks, president of U.S. Trust, which conducted the survey of 684 high net worth individuals.

The formula? The average multimillionaire started saving at the tender age of 14; working for pay by age 15; giving time or money to charity by age 23; and investing in the stock market by age 25. Only 10 percent of those surveyed inherited their wealth.

Economic discipline is a key. Eight in 10 multimillionaires prioritized saving and investing for future goals as more important than funding current wants and needs, according to U.S. Trust Most also didn't get rich quickly. A whopping 89 percent said they made their biggest investment gains through the tried-and-true approach of building a diversified portfolio of stocks and bonds and holding them for long stretches.

Notably, while middle-income investors were once clamoring to get into hedge funds kin the belief that these private investment pools were the ticket to earning money rapidly, the rich are skeptical. And the older they are, the more skeptical they become.

Just 15 percent of the multimillionaires surveyed own hedge funds, and the vast majority who do invest in the funds are relative youngsters, primarily in the millennial generation. Among Baby Boomers and "mature" millionaires, only 8 percent own hedge funds, according to the survey. A slightly higher percentage of millionaires -- 20 percent overall -- invest in private equity and venture capital. A little less than one-quarter invest in structured products, such as convertible bonds. However, almost half own tangible assets, such as timber and investment real estate.

In other words, most multimillionaires stick to traditional asset classes -- stocks, bonds, cash and real estate.

"If they are saying that they have some skepticism toward alternative asset classes, it's because they've done well with traditional investments," said Chris Heilmann, a U.S. Trust managing director who runs the company's national estate planning and trust practices. "Eighty-nine percent made their money buying stocks and bonds."

When asked about their investment outlook, high-net worth individuals are both cautious and optimistic. Though this group, which U.S. Trust has been surveying since 1993, historically invests primarily for growth, they've recently turned more conservative. Some 52 percent say they are now more focused on protecting their assets from upsets than investing for growth. That's the most cautious stance the group has taken since 2012, Heilmann said. Sixty percent add that they consider managing risk more important than earning higher returns.

About one-fifth add that they are keeping more than 25 percent of their assets in cash. But less than half of those say that's to manage risk. The rich are opportunistic investors, the survey found. The majority maintain a big cash cushion to jump on investment opportunities as they arise.