Number of millionaires hits record

[Squirt]

There are 8.9 million affluent households, and the number of 'emerging affluent' grow, study finds.
September 28, 2005: 5:36 AM EDT
By Jeanne Sahadi, CNN/Money senior writer

NEW YORK (CNN/Money) - There are 700,000 more millionaire households this year than in 2004, according to a survey released Wednesday.

Households with a net worth of at least $1 million excluding primary residences rose 8 percent to a record high 8.9 million, according to an annual report by TNS Financial Services, a market research and polling firm.

This is the third consecutive annual increase, although this year's growth rate is far more modest than the 33 percent increase seen in 2004.

Interestingly, although the number of millionaire households grew, the averages among some of their primary investments were down.

TNS found that there were fewer millionaire households who owned investment real estate this year than last, although real estate continued to be a staple in investment portfolios for many.

And while the number of millionaire households owning individual stocks and bonds went up, the average balance in their investment portfolios went down. Likewise, those owning mutual funds also saw their account balances decline from an average of $355,000 last year to $283,000 this year.

On the plus side from a net worth perspective, these households' overall debt fell, by 8 percent, from an average of $179,000 last year to $165,000.

"There usually is never one thing that drives the (number of millionaires) up or down," said Jeanette Luhr, manager of the TNS research study. But, she noted, the millionaire households didn't grow rich overnight.

"The growth we've seen this year is largely due to measured planning and active reinvestment," Luhr said in a statement. "When asked about their investment approach over the past year, 61 percent of millionaires said their approach has changed very little, indicating they have a strategy and they are sticking to it."

That includes maintaining and monitoring a diversified portfolio, Luhr said, and also taking advantage of low interest rates to refinance and pay down debt.

The survey did not look at what tax changes millionaire households may have taken advantage of.

The total income reported among millionaire households averaged $119,000. Among those households that drew some of their income from jobs, they earned an average of $82,000 in salaries or professional fees. The average age among the heads of these households was 56, and about 75 percent of them said they felt confident they will be financially prepared for retirement.

More millionaires on the way?
The TNS study also found that the number of "emerging affluent" households is also on the rise.

TNS defines "emerging affluent" as households with a net worth between $100,000 and $500,000, excluding primary residences.

This year, they number 24.5 million, up from 23.9 million in 2004.

"More and more we are seeing financial institutions offer planning services designed specifically for the emerging market. As these households continue to take advantage of these tools, we're seeing their numbers increase," Luhr said.

The average age of the emerging affluent is 49.6, and the average total income reported is $64,600. Among those households that drew some of their income from jobs, they earned an average of $45,000 from salaries or professional fees.

Retirement confidence among these households is high: 69 percent said they felt they will be prepared for retirement. FULL STORY

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Strange coincidence we have a record deficit and low dollar value but more millionaires.... the rich get richer and the poor get poorer. Bush must be proud :signhere:

[basschick]

a million dollars isn't rich anymore - at least not in los angeles.

when i was growing up, a million dollars was impressive. the house i grew up in my parents paid $33,000 for. that same house just sold for just under a million dollars. the neighborhood is pretty much the same - middle class - and no house in that neighborhood goes for under $600,000 anymore.

we're not talking mansions, or houses with acreage. we're talking 3 bedroom, average back and front yard. to get up to the over-$750,000 range, you need a den and a second bathroom. a house near us in the lower hollywood hills just sold for a million, and with the adjacent lot, the total paid was $1,400,000. the house is nice, but no one looking at any house around here would go "wow!"

so the term "millionaire" doesn't really mean shit. probably what drove the number of millionaires up was that the cost of living is so high that being a millionaire only makes you middle-class.

[desslock]

There are 700,000 more millionaire households this year than in 2004, according to a survey released Wednesday.
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Strange coincidence we have a record deficit and low dollar value but more millionaires.... the rich get richer and the poor get poorer. Bush must be proud

It doesn't mean that at all. The US federal deficit has nothing to do with whether or not there happen to be millionaires. In fact tax revenues for this year are up from the previous years.... as economists prediced. If you lower tax rates, the economy will grow and there will be more tax receipts coming from the additional business. This is exactly what happened. If you have an issue with how Congress goes into deficit spending, well you're not alone. But that has nothing to do with the tax rates.

The article had this important note buried deep inside:

The total income reported among millionaire households averaged $119,000. Among those households that drew some of their income from jobs, they earned an average of $82,000 in salaries or professional fees. The average age among the heads of these households was 56, and about 75 percent of them said they felt confident they will be financially prepared for retirement.

So what is so horrible about people who make $119,000 a year? Especially by the time you are in your late 50s? This is horrible? That is not that outrageous a figure in this day and age. Especially if people are living in $500,000 run of the mill homes in California. This also says that people are saving more, and not living a high life under a mountain of debt. And they are saving lots for retirement. Sounds pretty good to me too.

Maybe the aging baby boomers are onto something.

If this good economic news is met with such skepticism, then what would a pleasing report be? Wages and income DROPPED nationwide in 2005??? or how about More cities around the US suffer negative growth, residents forced to sell their homes ???

And furthermore, just because a country has a negligible federal deficit, does not mean that it will have a good economy. Easy examples would be France and Germany, who have to keep their budgets strictly balanced to stay in the EU. They have been enjoying 10% + unemployment and all other kinds of malaise for years... with things just getting worse. Yes, the federal deficit is a problem, and should be adressed, but don't throw the baby out with the bathwater.

Steve

[davespeedoevans]

Definitely hear you guys about the massive increase in property values.

But the survey did say that to qualify for the survey they had to have 1 mill in assets excluding their primary residence. I think if they includes primary residence then the number would sky rocket.

[basschick]

my point wasn't so much about home values as it was about inflation. when i was a kid, minimum wage was $1.60, so a millionaire was a big thing. now that minimum wage is over $6, i won't say those people are about to become millionaires, but a million dollars just isn't what it once was.

you can't live on a million dollars in this city for the rest of your life, you can't retire forever or buy and maintain a yacht or even one mansion and you can't buy a flock of amazing cars with a single million. in l.a., you can't even buy a house in a good (we're not talking beverly hills) neighborhood.

that's the sort of purchasing power most people picture when they hear the word "millionaire" but it's been years since that's what a millionaire really is. look at the millionaire in gilligan's island. look at the beverly hillbillies after they made their million.

[Squirt]

It doesn't mean that at all. The US federal deficit has nothing to do with whether or not there happen to be millionaires. In fact tax revenues for this year are up from the previous years.... as economists prediced. If you lower tax rates, the economy will grow and there will be more tax receipts coming from the additional business. This is exactly what happened. If you have an issue with how Congress goes into deficit spending, well you're not alone. But that has nothing to do with the tax rates.

Macro economics is a complicated beast but I can tell you that the war machine is what "stimulated" the economy not some measly tax breaks. When you have everyday people from America getting paid hazard work in Iraq for $75 an hour, or more, that puts more money in their pocket. When you have the twin towers fall to the ground, people get paid, and paid a lot, to clean up the mess. Rebuilding, rewiring, re planning, restocking, rewarding.

The deficit has plenty to do with money coming into our economy. Every day our government borrows BILLIIONS of dollars from all around the world to pay for the war in Iraq, amongst other things. While creating the largest deficit in U.S. history, this is also bringing TRILLIONS of dollars into our economy that wasn't there before. So the deficit directly effects money going into the pockets of rick Americans.

So what is so horrible about people who make $119,000 a year? Especially by the time you are in your late 50s? This is horrible? That is not that outrageous a figure in this day and age. Especially if people are living in $500,000 run of the mill homes in California. This also says that people are saving more, and not living a high life under a mountain of debt. And they are saving lots for retirement. Sounds pretty good to me too.

Maybe the aging baby boomers are onto something.

Man if that was the truth it would be a wonderful thing but the market in California is close to bursting.. why? Because for years a way of generating income for the state has been saying.. "Well your house is worth more money today because we say it is, so you have to pay more in property tax" Australians are following suit here. Houses worth $65k 3 years ago are all of a sudden worth $300k now. People have to move because they can't pay the property tax.

Sure these older people are worth over a million in property BUT their standard of living is shit. AND at the end of the day, if you're a millionaire in Los Angeles but live like a median wage earner in the Midwest, what does that really say? Not much.

Another problem with your hypothesis is that when people have property, with little or no money to spend, that is not good for the economy. People spending money is good for the economy.


Listen I don't pretend to know everything, not by a longshot. And I haven't lived in the states for over 3 years now. But three years ago, at least in California, people were working 2-3 jobs just to get by, not to get ahead, but just to survive. We have a lot of problems in our society because of this overwork ethic in America and cracks are starting to show.

I'm not poor, a lot of us webmasters aren't poor. A lot of us make more then the $120k figure and we aren't millionaires. Why not? Think about it. Our generation is getting the short end of the stick.. don't you think Steve?

[Squirt]

Also Steve.. how is it we have record credit card debt, and record number of millionaires?

Don't you think the old addage is true about the rich getting richer and the poor getting poorer?

The rich are driving things higher and the poor are having to go into more debt just to maintain.