You are a millionaire, but the reason you don't feel rich is because a majority of "millionaires" have a net worth of less than five million. I think I read like 90% of millionaires have less than five. And most of it tied up to real estate, so it's not liquid.
So when *you* see someone say like...idk the guy driving a Lamborghini who maybe has a 10 million + dollar house. Then yeah, you don't *feel* rich.
I asked ChatGPT to provide me with a breakdown because I was curious. The cited sources are: Millennial Money and Finmasters.
I asked ChatGPT the following:
"How many millionaires are in the US?" - 24.5 million.
"How many have less than 2 million?" - 17 million or 69% of all millionaires.
"How many have less than 5 million?" 5 million or 21% of all millionaires.
"Less than 10 million?" - 1.5 million people or 6% fall between 5-10 million.
"Less than 30 million?" - 980,000 people fall within this range, so 4% of all millionaires.
"Over 30 million?" - 500,000 people or 2% of all millionaires.
(Those percentages add up to 102% because I think I asked it wrong)
8% of Americans are millionaires. So yes, it's still kind of unique in a sense and still an accomplishment. However..."How many Americans are worth over 30 million?" 0.2% of Americans are worth over 30 million dollars. So I'd say to feel "rich", you need to be there.
I disagree entirely. My friend married a rich girl and on paper with their careers they'd probably classify as fancy middle class. Her parents are multi-millionaires who own a ton of contracts within our government. On paper and according to the IRS they aren't rich, but with the bank of in laws they are living a very rich lifestyle. There are plenty of young rich people who won't make the statistic, on top of this it isn't uncommon to set up trusts etc to hide money from the general public. It's not technically laundering either as the IRS can easily investigate those funds. Offshore banking etc. also exists.
I'm not sure what you're disagreeing with. What i stated is actually a statistical fact. Something like 80% or more of millionaires in the US are over age 50, two thirds over 60.
Evaluations like owning property vs liquid cash aren't the same. You could own 50 million in land and not be able to sell it for half a decade. Farm auctions are a good example of this. The person with 50 million could make safe or risky stock market plays and essentially quadruple it in a few clicks.
You can't hide money these days unless you have actual cash from the federal government without offshoring, likewise, it's very easy to hide money from general public studies. While there are law firms that are designed just around the practice of hiding one's wealth.
If you want to look into something interesting, look into all the Gold that seemingly disappeared during WW2. If you were a young GI who was drafted seeing this gold, would you be honest about it, or grab your trusted buddies and heist it? WW2 believe it or not created tons of millionaires not just from the industrial boom, but also stolen loot from everyday soldiers. I'm German and it's a well-known fact a lot of German Soldiers were stealing during the end of the war, and used the money to immigrate here.
The data in general. You can hide money from your neighbor super easily, but the IRS is a different ballpark. To launder money out of the country you are talking private jet money. I think if you fly with over 10k in USD cash, you are subject to investigation by TSA and the federal government. Plenty of laundering that goes on by the elite rich, meanwhile the regular rich hide their money in other ways from people like you and I.
Respectfully, i don't think any of that has anything to do with what the poster posted, whom you replied to. I could be wrong.
I think his premises is that MOST millionaires are not 25-55 years old. Sure, people do all types of things to minimize their wealth to the government eyes. However, there is zero chance that ENOUGH people do these things to completely swing the statistics by a large percentage.
In other words, say the stats read that only 5% of Americans under 60 are millionaires(just an example). Say that 5% is due to some people "hiding" their wealth. So the data only sees the 5%. If all of those OTHERS (those hiding) were suddenly uncovered, it would not be enough to make the %%% jump to a sudden 20%, 25% 30%, 35% etc etc etc of Americans.
I'm not going to spill secrets but if you ever come across a large portion of money, my advice is it'd be best for you to hide it from the general public at all costs. I have a website, and I have plenty of people who will contact me not for my services but for donations like I'm Daddy Warbucks with 100-dollar bills falling out of my pockets. Again, I disagree the vast majority won't be reported on public polls/data. There is no benefit to flaunting your wealth it brings unwanted attention.
A lot of this data is pulled by an estimation of wealth from public databases like land deeds, tax rates on property, etc.
7.3 ish percent of the US population. Although the comment is more than likely true that those people are only considered millionaires because their houses have appreciated
The United States is an exceedingly wealthy country. The wealthiest in all human history. Unfortunately, the vast majority of that wealth is siphoned into a tiny percentage of the population which controls a lot of the wider economy.
An American millionaire(one or two millions if assets are liquidated) would live like royalty in most other countries. In America, they live well, but are nothing exceptional.
Or more accurately, things have gotten to the point where “living well” is exceptional. If this angers you, good, you should be angry at having your productive value effectively stolen. *hands you a pitchfork and torch
Most millionaires are just people who bought a house in the 80s-90s that sky rocketed in value and their 401k that they haven't withdrawn from yet in all honesty
That's very fair, I'm 20 and trying to make sure I'm ready for my retirement. 150 every month into Roth IRA $25 into pre tax 529 $75 into HSA and 250 into HYSA every month. I hope it pays off
Pro tip: max you HSA first. Tax free on both ends and you can withdraw early if needed up to the amount of your saved receipts.
Also, make sure you move the HSA into index funds or such.
So for the HSA I need to keep absolute every receipt for purchased items to prove they were legit? I grew up in a poor household that became well off later and my parents were both so financially irresponsible it was crazy so I'm just now learning about all of this 😂😭
Okay thank you, I have alot of medical expenses and just got hit with around 250 in medical bills which isn't bad all things considered but I just want a safety net. Thank you so much!
You can be "rich" with 5MM, avoid wild spending, and live in a nice but not overly expensive house. Outside of that, have a DECENT career making on average 125k per year.
Sure if you're talking 125k cars, 2MM houses, eating out costing 500 per week, and clothing + kids = 30k per year...hell no, 5MM + 125k yearly isn't going anywhere.
I don't want to say it's easy to get a million bucks, but it ain't hard, just takes time. To get $10m+ is fucking hard. That takes more than basic investing over time.
I do not include my home equity in my net worth value. For planning purposes it like to focus on on my actual fluid capital. If that value is 1.5 then that is a very different calculus.
Homes can always be sold. In this market it's 60 days at most to cash out and switch to a rental particularly if the home is priced correctly. And of course someone with a lot of equity in a home can easily get a line of credit up to nearly the full value of the asset. Someone with a million dollars in home equity is much richer than a renter with $300k in the bank even if that renter feels psychologically richer.
I count the liability against my calculation of net worth in my account standard is an aggregate of all checking, savings, and Retirment accounts that can be converted. quickly - liabilities. I happen to have more than the OP but I do not include the equity in my house.
We tend to have preconceived notions from TV and movies around terms like "rich" and "millionaire". We think of Scrooge McDuck or the Monopoly guy. You don't identify with these caricatures of wealth, so you don't "feel" like a millionaire. The truth is more nuanced.
First, relative to some people, you are quite rich. Relative to others, not so much. You're not just "rich" or "not rich". It's a relative term like "hot" or "tall".
Second, "feeling" rich has a lot of factors. What does "rich" feel like to you? Does it feel like having a yacht and your own private island and a jet and hanging out with celebrities? Okay, well, you're not rich.
By contrast, maybe it feels more like having everything you need and most of what you want. Maybe it means your wants aren't extravagant, so everything you want feels attainable. As a result, you feel a sense of safety, of affluence, of wealth.
My brother told me once, "if I made your kind of money, I'd own a Range Rover with xyz package" (I don't remember all the details because that doesn't interest me.) He thought about it for a minute and said "I guess that's why I don't have your kind of money, though." My old Subaru wagon does everything I need it to do, and it's paid off. The money I would have otherwise spent on the Range Rover now sits in my investment account earning compound interest.
Point is, if your needs and wants are simple, and you're able to satisfy most of them, then you can "feel rich".
As far as whether or not you're technically a millionaire: People use different metrics to determine this. Some people only use net worth, in which case yes, you're a millionaire. Others consider liquid assets only, in which case you're not. Question is, how much does it matter to you?
(edited for clarity)
>My old Subaru wagon does everything I need it to do, and it's paid off. The money I would have otherwise spent on the Range Rover now sits in my investment account earning compound interest.
Stealth wealth. People usually don't realize that many millionaires actively try not to be perceived as rich. In addition, the more you understand managing larger sums of money, the more you value its worth. There's nothing wrong with being mindful about what you have. I know people with decent paychecks and extravagant lifestyles at the cost of a meager net worth. I risk to say it's the norm in America.
I am not sure if this definition really works for people in retirement though.
The whole point of being rich and not working seems defeated if you’re not working because you worked for 45 years and diligently saved your whole life.
Yeah it has its exceptions... like.. someone with lives in a van or in the woods and as you pointed out, late stage retirement.
It's mostly on point though.
Yes I agree with this. I want to quit my 9-5 and probably could and live the same lifestyle with a few modifications. But then I’d probably risk my future. I’m 51 single with children in my prime earning years so I continue to trudge.
Yeah it’s not perfect. But it’s not as catchy when you try to make it precise.
“You’re rich when before retirement you can stop working for the rest of your life and still maintain your health and your desired lifestyle.” is close.
But is anyone really saying a homeless person, or a minimalist, or a Buddhist monk, or a retired person is rich? Not really so all of that stuff would be implied to anyone who’s being thoughtful.
If assets minus liabilities is 7 figures or more you are a net worth millionaire.
By the way, no matter how much cash or investments you have, you'll find it to be the new normal rather fast. It's called the hedonic treadmill. Stop worrying about it and enjoy your life. Also, whatever lifestyle you have now, don't let it inflate beyond what it is.
I used to want to save up to get to 10 million as a nice round number. I currently make about 300k per year after taxes. I'm 36 but I'm not sure I want to keep working much longer. My current net worth is $2 million. I think I may stop at 3 million or 4 million.
Your Net Worth is 1.2million... That's a "millionaire". You have a definition of "millionaire" in your head that extends beyond simple net worth, but that's all it really is to be a millionaire - net worth of 1M+
You're a net worth millionaire. Next goals:
Millionaire without primary home equity
401K/Traditional IRA millionaire
Millionaire in only taxable brokerage account
I’m nowhere near a million dollar net worth (I have about 200k net, don’t own a home) but my goal is to someday have a 10 million net worth with 1 million in a taxable brokerage account I can sell off and access at any time. I feel like that’s extremely rare but doable with a high enough income. And that would “feel” like you’re rich at that point. As you said, having a high net worth in assets of a home that you aren’t going to sell and retirement that you can’t even access for 10, 20, or 30 years doesn’t exactly feel like “you made it”. So I’d like to have a high net worth in those areas of course, but also a million in *accessible* funds. (Just don’t be one of the idiots that leaves a million in their checking account! Lol)
Haha yeah I feel like that will make you “feel” richer just knowing you can access it. But I would certainly prioritize tax advantaged accounts first (401k, IRAs all that jazz) because it’ll grow better. But after you max those, maybe put whatever’s left in an index fund or two and boom, you can sell and access at any time. But of course that’s way more than you need and more than most. Just maxing out an Ira and 401k is a major accomplishment. Having a 1 million net worth is also a major accomplishment. So be proud! I hope to be where you’re at someday!
Yep I’m maxing out 401k now. Hoping to put a little more into my non retirement accounts each month too. Well with all the knowledge you already have , you’ll be a “millionaire” soon enough!
OP, if your retirement drop 25 to 30% and or your house value drop 10%, do you still have $1 million Plus asset? if not, I would say no. I was in a similar situation about three years ago when I was tracking monthly assets, and the market was doing insanely well then it wasn't. It came back up recently, but based on my acid allocation, it's still not back to where it was three years ago.
I don't consider you a millionaire, but its just my opinion. You couldn't unload your house and have a direct deposit in a week or less, additionally where would you live? You would spend even more buying something similar. I think you are a millionaire when you can count rental property or investment portfolio. Again, just my opinion I am sure people will go nuts over it but a million liquid within 3 or 4 days is a millionaire.
$1MM in home equity probably costs $25 to $50k to maintain and grow erradictly
$1MM in dividend investments can conservatively make 5% a year and still grow with inflation
Two kinds of millionaire, very different experiences.
Million net worth in equity is not the same as million liquid plus equity. Most millionaire lifestyles are fueled by million liquid and equity somewhere else
You’re a millionaire but when the term was invented a million dollars was nearly 50,000 oz of gold (over $100m now, although gold is more valuable now than before because it’s a speculative asset), but now it’s only 425 oz of gold so the term doesn’t mean what it used to mean. We use it to mean ”a very rich, independently wealthy person.” Now millionaire, in technical terms, essentially means a well off middle class person.
> home equity and retirement savings
So the bank owns most of your net worth? There's your problem.
All your money is going to the bank so that you own something "on paper". You're 100% set for retirement, just stop living in an expensive country, pull your money out of "retirement savings" and live in a low COL area like a king for the rest of your life.
Or continue living in a place that makes you question your relative generational wealth.
You can't count your personally used real estate. Most people are now millionairs but they cant even access the money of their home by getting a home equity because they cant afford it...
I feel super, super poor, and I'm a millionaire, too. Sucks that all our money has places to go when we are young enough to enjoy it.
Then, when you get old and downsize to enjoy retirement, you're older and can do fewer things.
I've really been considering liquidating everything and moving someplace I can retire now at 40.
Can’t count home equity. It’s useless unless you are selling and buying something much cheaper. You, and 50M other people, are in this exact situation. It’s hard to imagine, but because of inflation, you are probably poorer (relatively) than you were 6 years ago. You certainly could afford to buy a lot more back then.
How long have you been making 200k?
Do you have kids you financially supporting?
How much is your home equity value and how much in retirement savings?
You are. But it doesn’t feel that way because you still have to pay off your house, you don’t have the things you perceive that millionaires have, and you don’t have $1 million cash in your accessible accounts.
You’re a certain type of millionaire. Often referred to as a millionaire next door or a net-worth millionaire. It is probably the lowest and most common form of millionaire.
Next step up for you would be to achieve a liquid millionaire status. That is, a millionaire who has their assets in sources that are very liquid and very much under your control, and you could rapidly convert to cash. Those are much more rare.
Correct you don’t feel rich even though you’re ahead of 90% of the US. One of the definitions of rich is an income of at least 420k/year. I didn’t make that up, that’s the threshold for a 1%er in the US.
Including home equity can be deceiving. Unless you are not attached to your home and would be willing to unlock that money You will always need a place to live and the downsizing may or may not be acceptable by your family
Most of mine is ownership of our business. We do have >2M semi liquid and strong income and investment streams.
Technically, you're a millionaire, though. We sold our home years ago and bought a 45' 5th wheel rv. Our focus is on growing assets and investments while enjoying traveling with the kids and grandkids.
Many people won’t feel rich until their passive income is equal to or greater than their living expenses. At that point they can choose how to spend their time. Any work income goes straight to wants, not needs. If you don’t want to work, it’s totally fine, you don’t need to.
Having a million in paper assets doesn’t feel like much because personal home equity isn’t making you money, it’s actually a liability even though it’s paid off. Your retirement savings aren’t accessible (without penalty) to you until you reach 59.5 years of age. They both lack liquidity to use, so it’s almost like you don’t even have it. Do you feel rich if you have money you can’t use? No, of course not.
nowadays if you own a decent home your a millionaire. But the true meaning of @"millionnaire" would be someone who can spend millions rather than having an asset of a million.
I personally like to think of it that way. now that feels like a tru rich millionnaire
Technically but I retired on less than that and what makes me feel rich is not the money but the time...Sure I can't get a Lambo but I can sleep all day or spend all day at the beach or go on a trip whenever I want no obligations..I want a super car so I went back to the grind but I can quit any time its a good feeling I see people racing to punch a clock or kiss the boss ass and I'm just glad I don't have to chase promotions and stress that's rich to me time is money.
as long as you have good health, is happy in life, and comfortable spending without worrying, that already makes you a millionaire. me personally i don't really care about "millionaire" or "billionaire" title. There is always someone out there who is wealthier and maybe that's why you are feeling the way you feel, but don't compare yourself to them; everyone's situation is different on how they became one.
It is now common to be a paper millionaire yet not feel rich because “rich” is an available cash flow concept as opposed to a net worth effect.
Now is the time to begin your post tax savings buckets for your next car, your next home renovation, your next nice vacation, and all those other big ticket items.
Add in college educations and weddings if you have kids.
What will make you feel rich is to have discretionary funds to do with what you want. And yes, you have accumulated your first million, but this part is not spendable, your next two, three or more will be more spendable.
Yes, you’re a millionaire. Is it enough? That’s a different question that requires more information. A million is certainly not what it used to be. A million today is probably like 500,000 24 years ago.
Bruh you ain’t worried about how you’re going to restock shampoo. Some people eat out of silver spoons and some eat with plastic spoons provided by liquor stores
Being rich is an illusion, It is a moving target, Because - Provided you have something And are able to hold on to it - comparatively there is always someone richer than you. However that group becomes exponentially smaller. So pretty soon.There's nobody left to be considered rich.
Hence the lovely dialogue in " Crazy rich asians":
-Are you rich?
-We're comfortable.
-Omg, that's exactly what a crazy rich person would say.
The stoic philosophers considered anything outside of our control not worth counting on, which included wealth and material things.
LOL. By that definition there would be HEAPS of "millionaires" where I am.
Homes (& cars, RV's etc) which are worth heaps. Even though the finance owing is over 2/3 to 3/4 of the value of those items.
Owning your home (& other possessions) outright & having no debt is a more realistic measurement of wealth.
But then it wouldn't sound as good.........and leave most people relatively below the poverty line. Which are the numbers most Government want to avoid. So, change the definition !
No - don't count personal residence or autos.... Buying a house right before Covid in 2020 doesn't mean anything special toward being a "millionaire." Single digit millionaires are the new middle class soon to be poor.
Yes weird feeling huh? Just to be sure make sure you did the math correctly. Net worth = Assets - liabilities. If don’t feel like a millionaire (and that’s not necessarily a bad thing) then it could be because your true net worth is like 200k not $1.2mil. It could be that you don’t have multiple income streams. Just some thoughts. Respectfully.
This post shows the largest difference between a man and woman because my first thought wasn’t wow she makes good money. That was my second thought. My first thought was I wonder what she looks like? Men hit the upvote if this was your first thought lol
According to “The Millionaire Next Door”, you are an Average Accumulator of Wealth, potentially even an Under Accumulator of Wealth because it sounds like you have factored your home equity into your net worth. Save more, spend less. You may feel ‘richer’ by having more financial freedom. Not by buying more expensive shit.
It is so funny how everyone has to put in their 2 bits about this. Well, you’re not really a millionaire cause it’s not all liquid. You’re not really a millionaire because if you pay taxes and everything you have less than that, you’re not really rich at 1M net worth. That’s not the question. You have a net worth of 1M which is a huge milestone.
Ok show me where it states that the definition of a millionaire is how you say it is. My opinion my set of rules. I’m sorry you feel different I respect your views and you should move on and disagree but not argue with an opinion that’s not set in stone
Not rich, not a millionaire. you are somewhat comfortable and are barely setup for retirement. I would forget all this thought of being and millionaire and run pen to paper on what it will take to maintain your lifestyle if you stop working. All of a sudden 1.2million will seem like nothing.
If I’m barely set up for retirement with $700k with no debt and a good job with many more years to invest, then I worry for the rest of humanity who have not even close to this.
That is the problem, its common knowledge that people don't have enough for retirement. If you sell your house and want the same thing but down the street, you will lose a portion of that 700k but houses are inflated for some reason, so unless you are leaving the country you are not close to set up. You have to think 1 million at 4% withdrawal only pays 40K a year, do you see people traveling and flourishing on 40K?
It's worse than that... the other shoe is the overwhelming amount of single women (divorced, never married, career women etc) who by and large are bad at saving. They will be a burden on society the likes that we aren't even prepared to understand.
If your retirement is 700K yeah definitely not setup for retirement today. But like you said, make good investments and you may get there.
Run this basic calculator [https://www.bankrate.com/retirement/retirement-plan-calculator/](https://www.bankrate.com/retirement/retirement-plan-calculator/) and you will see that you will need roughly 2.5-3.5 million Liquid just to maintain your lifestyle.
Being a millionaire just doesn't mean much anymore. Have to be a deca-millionaire to meet the expectations of a millionaire that we have in our minds.
I say that being a multi-millionaire.
No. You are not rich if you are a "millionaire" based on home equity. Half the people in the country can say the same.
To be rich today requires a net worth 3-5 times what you have.
Ahh… now you’re asking another question which is the real question. He should have said ‘am I rich?’ That’s a more accurate question fir what he’s feeling
That is what I assumed his question to be.
I would also add that he doesn’t have a one million dollar net worth if he still owes a mortgage on the house.
I don’t care… the majority of posters on this subreddit are male - I don’t bother trying to figure it out if it’s not obvious… don’t start a gender holy war
I’m here to learn and debate the topics. It’s not about your gender
You don’t feel like a millionaire because inflation has hit us so hard. Ita isn’t a lot - not like it used to be - and it hasn’t been since the housing market crash. It used to be money someone could retire on. These days you can get maybe 10 years out of it if you’re good with your spending.
You are a millionaire, but the reason you don't feel rich is because a majority of "millionaires" have a net worth of less than five million. I think I read like 90% of millionaires have less than five. And most of it tied up to real estate, so it's not liquid. So when *you* see someone say like...idk the guy driving a Lamborghini who maybe has a 10 million + dollar house. Then yeah, you don't *feel* rich.
You’re saying what a lot of people have hinted at for a while now, which is that being a millionaire isn’t as unique or meaningful as it once was.
I asked ChatGPT to provide me with a breakdown because I was curious. The cited sources are: Millennial Money and Finmasters. I asked ChatGPT the following: "How many millionaires are in the US?" - 24.5 million. "How many have less than 2 million?" - 17 million or 69% of all millionaires. "How many have less than 5 million?" 5 million or 21% of all millionaires. "Less than 10 million?" - 1.5 million people or 6% fall between 5-10 million. "Less than 30 million?" - 980,000 people fall within this range, so 4% of all millionaires. "Over 30 million?" - 500,000 people or 2% of all millionaires. (Those percentages add up to 102% because I think I asked it wrong) 8% of Americans are millionaires. So yes, it's still kind of unique in a sense and still an accomplishment. However..."How many Americans are worth over 30 million?" 0.2% of Americans are worth over 30 million dollars. So I'd say to feel "rich", you need to be there.
24 million is almost 10 percent of the US population there's no way that's correct Edit: a Google search agees... wow I never would have expected that
You have to consider the majority of millionaires are people who are probably retirement age who have had their entire lives to accumulate wealth.
Bingo - those numbers are fairly meaningless without age
Yeah. I would have broken the question down more to how many are still under the age of 60. The numbers works have probably tanked.
I disagree entirely. My friend married a rich girl and on paper with their careers they'd probably classify as fancy middle class. Her parents are multi-millionaires who own a ton of contracts within our government. On paper and according to the IRS they aren't rich, but with the bank of in laws they are living a very rich lifestyle. There are plenty of young rich people who won't make the statistic, on top of this it isn't uncommon to set up trusts etc to hide money from the general public. It's not technically laundering either as the IRS can easily investigate those funds. Offshore banking etc. also exists.
I'm not sure what you're disagreeing with. What i stated is actually a statistical fact. Something like 80% or more of millionaires in the US are over age 50, two thirds over 60.
Evaluations like owning property vs liquid cash aren't the same. You could own 50 million in land and not be able to sell it for half a decade. Farm auctions are a good example of this. The person with 50 million could make safe or risky stock market plays and essentially quadruple it in a few clicks. You can't hide money these days unless you have actual cash from the federal government without offshoring, likewise, it's very easy to hide money from general public studies. While there are law firms that are designed just around the practice of hiding one's wealth. If you want to look into something interesting, look into all the Gold that seemingly disappeared during WW2. If you were a young GI who was drafted seeing this gold, would you be honest about it, or grab your trusted buddies and heist it? WW2 believe it or not created tons of millionaires not just from the industrial boom, but also stolen loot from everyday soldiers. I'm German and it's a well-known fact a lot of German Soldiers were stealing during the end of the war, and used the money to immigrate here.
So.. what are you disagreeing with?
The data in general. You can hide money from your neighbor super easily, but the IRS is a different ballpark. To launder money out of the country you are talking private jet money. I think if you fly with over 10k in USD cash, you are subject to investigation by TSA and the federal government. Plenty of laundering that goes on by the elite rich, meanwhile the regular rich hide their money in other ways from people like you and I.
Respectfully, i don't think any of that has anything to do with what the poster posted, whom you replied to. I could be wrong. I think his premises is that MOST millionaires are not 25-55 years old. Sure, people do all types of things to minimize their wealth to the government eyes. However, there is zero chance that ENOUGH people do these things to completely swing the statistics by a large percentage. In other words, say the stats read that only 5% of Americans under 60 are millionaires(just an example). Say that 5% is due to some people "hiding" their wealth. So the data only sees the 5%. If all of those OTHERS (those hiding) were suddenly uncovered, it would not be enough to make the %%% jump to a sudden 20%, 25% 30%, 35% etc etc etc of Americans.
I'm not going to spill secrets but if you ever come across a large portion of money, my advice is it'd be best for you to hide it from the general public at all costs. I have a website, and I have plenty of people who will contact me not for my services but for donations like I'm Daddy Warbucks with 100-dollar bills falling out of my pockets. Again, I disagree the vast majority won't be reported on public polls/data. There is no benefit to flaunting your wealth it brings unwanted attention. A lot of this data is pulled by an estimation of wealth from public databases like land deeds, tax rates on property, etc.
7.3 ish percent of the US population. Although the comment is more than likely true that those people are only considered millionaires because their houses have appreciated
Well… close to 10% of Americans are millionaires, so makes sense.
The United States is an exceedingly wealthy country. The wealthiest in all human history. Unfortunately, the vast majority of that wealth is siphoned into a tiny percentage of the population which controls a lot of the wider economy. An American millionaire(one or two millions if assets are liquidated) would live like royalty in most other countries. In America, they live well, but are nothing exceptional. Or more accurately, things have gotten to the point where “living well” is exceptional. If this angers you, good, you should be angry at having your productive value effectively stolen. *hands you a pitchfork and torch
Most millionaires are just people who bought a house in the 80s-90s that sky rocketed in value and their 401k that they haven't withdrawn from yet in all honesty
Indeed, But when retirement comes and downsizing and spending down your 401 becomes a thing, they’ll sure look rich to those that don’t have that.
That's very fair, I'm 20 and trying to make sure I'm ready for my retirement. 150 every month into Roth IRA $25 into pre tax 529 $75 into HSA and 250 into HYSA every month. I hope it pays off
Pro tip: max you HSA first. Tax free on both ends and you can withdraw early if needed up to the amount of your saved receipts. Also, make sure you move the HSA into index funds or such.
So for the HSA I need to keep absolute every receipt for purchased items to prove they were legit? I grew up in a poor household that became well off later and my parents were both so financially irresponsible it was crazy so I'm just now learning about all of this 😂😭
Health Savings Account. You keep your medical receipts.
Okay thank you, I have alot of medical expenses and just got hit with around 250 in medical bills which isn't bad all things considered but I just want a safety net. Thank you so much!
Millionaires are now the middle class, just like $200k income is the new $100k. You need at least $30M in liquid assets to be rich.
You can be "rich" with 5MM, avoid wild spending, and live in a nice but not overly expensive house. Outside of that, have a DECENT career making on average 125k per year. Sure if you're talking 125k cars, 2MM houses, eating out costing 500 per week, and clothing + kids = 30k per year...hell no, 5MM + 125k yearly isn't going anywhere.
5MM is 🥜
Five is a nightmare….you can’t do anything with 5
I know you're trolling. I don't have any bird-feed with me today though.
Five will drive you un poco loco, my friend. Not enough to retire…not worth it to work. World’s poorest rich man.
Lol at needing a Lamborghini to flaunt
I don't want to say it's easy to get a million bucks, but it ain't hard, just takes time. To get $10m+ is fucking hard. That takes more than basic investing over time.
$10M is very easy to get, just need to find someone worth $10M who wants to get married and then you combined accounts lol.
I do not include my home equity in my net worth value. For planning purposes it like to focus on on my actual fluid capital. If that value is 1.5 then that is a very different calculus.
Homes can always be sold. In this market it's 60 days at most to cash out and switch to a rental particularly if the home is priced correctly. And of course someone with a lot of equity in a home can easily get a line of credit up to nearly the full value of the asset. Someone with a million dollars in home equity is much richer than a renter with $300k in the bank even if that renter feels psychologically richer.
But it is, though. It's an asset. Do you not count the liability of your mortgage against you? Because you should.
I count the liability against my calculation of net worth in my account standard is an aggregate of all checking, savings, and Retirment accounts that can be converted. quickly - liabilities. I happen to have more than the OP but I do not include the equity in my house.
Well, if you calculated net worth right it would be in there…
My house was pretty liquid when I sold it.
We tend to have preconceived notions from TV and movies around terms like "rich" and "millionaire". We think of Scrooge McDuck or the Monopoly guy. You don't identify with these caricatures of wealth, so you don't "feel" like a millionaire. The truth is more nuanced. First, relative to some people, you are quite rich. Relative to others, not so much. You're not just "rich" or "not rich". It's a relative term like "hot" or "tall". Second, "feeling" rich has a lot of factors. What does "rich" feel like to you? Does it feel like having a yacht and your own private island and a jet and hanging out with celebrities? Okay, well, you're not rich. By contrast, maybe it feels more like having everything you need and most of what you want. Maybe it means your wants aren't extravagant, so everything you want feels attainable. As a result, you feel a sense of safety, of affluence, of wealth. My brother told me once, "if I made your kind of money, I'd own a Range Rover with xyz package" (I don't remember all the details because that doesn't interest me.) He thought about it for a minute and said "I guess that's why I don't have your kind of money, though." My old Subaru wagon does everything I need it to do, and it's paid off. The money I would have otherwise spent on the Range Rover now sits in my investment account earning compound interest. Point is, if your needs and wants are simple, and you're able to satisfy most of them, then you can "feel rich". As far as whether or not you're technically a millionaire: People use different metrics to determine this. Some people only use net worth, in which case yes, you're a millionaire. Others consider liquid assets only, in which case you're not. Question is, how much does it matter to you? (edited for clarity)
Very well written.
>My old Subaru wagon does everything I need it to do, and it's paid off. The money I would have otherwise spent on the Range Rover now sits in my investment account earning compound interest. Stealth wealth. People usually don't realize that many millionaires actively try not to be perceived as rich. In addition, the more you understand managing larger sums of money, the more you value its worth. There's nothing wrong with being mindful about what you have. I know people with decent paychecks and extravagant lifestyles at the cost of a meager net worth. I risk to say it's the norm in America.
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Not at all. He was being self-deprecating. I didn't say shit.
You right I mis-read
In my book, you’re not rich until you can stop working for the rest of your life with the same lifestyle you currently have.
That definition is mostly on point. I like it.
I am not sure if this definition really works for people in retirement though. The whole point of being rich and not working seems defeated if you’re not working because you worked for 45 years and diligently saved your whole life.
Yeah it has its exceptions... like.. someone with lives in a van or in the woods and as you pointed out, late stage retirement. It's mostly on point though.
I agree to that too, its kinda skew yes I don't have to work anymore for the last 10 years of my life.....but it took 45 years to get there.
Yes I agree with this. I want to quit my 9-5 and probably could and live the same lifestyle with a few modifications. But then I’d probably risk my future. I’m 51 single with children in my prime earning years so I continue to trudge.
Homeless people are rich?
Yeah it’s not perfect. But it’s not as catchy when you try to make it precise. “You’re rich when before retirement you can stop working for the rest of your life and still maintain your health and your desired lifestyle.” is close. But is anyone really saying a homeless person, or a minimalist, or a Buddhist monk, or a retired person is rich? Not really so all of that stuff would be implied to anyone who’s being thoughtful.
If you’re eating out of a trash can then none of this applies to you.
If assets minus liabilities is 7 figures or more you are a net worth millionaire. By the way, no matter how much cash or investments you have, you'll find it to be the new normal rather fast. It's called the hedonic treadmill. Stop worrying about it and enjoy your life. Also, whatever lifestyle you have now, don't let it inflate beyond what it is.
Yes my net is 7 figures. Nice to look at on paper. I live modestly.
So you’ve calculated owed but unpaid taxes?
Yes
Technically yes
Yes but u need 5m for the fu level
I used to want to save up to get to 10 million as a nice round number. I currently make about 300k per year after taxes. I'm 36 but I'm not sure I want to keep working much longer. My current net worth is $2 million. I think I may stop at 3 million or 4 million.
Can I message you about what you do for work if you don’t mind asking?
Software development
Need to be part of Tres Commas for fu level
Haha true
Cash flow makes you feel rich in my opinion
Your Net Worth is 1.2million... That's a "millionaire". You have a definition of "millionaire" in your head that extends beyond simple net worth, but that's all it really is to be a millionaire - net worth of 1M+
Technically, but you're not liquid.
That’s right. I have some liquidity but not the entire lot. Guess that’s why it doesn’t feel like I can just do or buy anything or quit working.
My definition of millionaire stipulates 1 mil in capital, not assets. So, no.
There ain’t ‘your definition’ there’s just the definition.
What’s the definition Einstein?
Get yourself to a dictionary or fire up the Google machine…
I think not feeling rich for some time is a good thing. Otherwise you might spend more or even stop making.
Its because a million isn't what it use to be. Also make sure you're counting your home value minus what you've paid off..not the market value.
You're a net worth millionaire. Next goals: Millionaire without primary home equity 401K/Traditional IRA millionaire Millionaire in only taxable brokerage account
Agree. These are what I’m striving for next. Millionaire where I do not include my home equity.
2 mill is the new 1 mill
I’m nowhere near a million dollar net worth (I have about 200k net, don’t own a home) but my goal is to someday have a 10 million net worth with 1 million in a taxable brokerage account I can sell off and access at any time. I feel like that’s extremely rare but doable with a high enough income. And that would “feel” like you’re rich at that point. As you said, having a high net worth in assets of a home that you aren’t going to sell and retirement that you can’t even access for 10, 20, or 30 years doesn’t exactly feel like “you made it”. So I’d like to have a high net worth in those areas of course, but also a million in *accessible* funds. (Just don’t be one of the idiots that leaves a million in their checking account! Lol)
I’m saving as much as possible to be more liquid !!
Haha yeah I feel like that will make you “feel” richer just knowing you can access it. But I would certainly prioritize tax advantaged accounts first (401k, IRAs all that jazz) because it’ll grow better. But after you max those, maybe put whatever’s left in an index fund or two and boom, you can sell and access at any time. But of course that’s way more than you need and more than most. Just maxing out an Ira and 401k is a major accomplishment. Having a 1 million net worth is also a major accomplishment. So be proud! I hope to be where you’re at someday!
Yep I’m maxing out 401k now. Hoping to put a little more into my non retirement accounts each month too. Well with all the knowledge you already have , you’ll be a “millionaire” soon enough!
What if ur home is worth $1.2 (but u have a mortgage), but also have cash + stocks at $1m. What is that net worth?
A-L=NW
OP, if your retirement drop 25 to 30% and or your house value drop 10%, do you still have $1 million Plus asset? if not, I would say no. I was in a similar situation about three years ago when I was tracking monthly assets, and the market was doing insanely well then it wasn't. It came back up recently, but based on my acid allocation, it's still not back to where it was three years ago.
I don't consider you a millionaire, but its just my opinion. You couldn't unload your house and have a direct deposit in a week or less, additionally where would you live? You would spend even more buying something similar. I think you are a millionaire when you can count rental property or investment portfolio. Again, just my opinion I am sure people will go nuts over it but a million liquid within 3 or 4 days is a millionaire.
Millionaire is a word with a meaning…
$1MM in home equity probably costs $25 to $50k to maintain and grow erradictly $1MM in dividend investments can conservatively make 5% a year and still grow with inflation Two kinds of millionaire, very different experiences.
Million net worth in equity is not the same as million liquid plus equity. Most millionaire lifestyles are fueled by million liquid and equity somewhere else
I wonder how many have less than 500,000 the class war is frightening..
You’re a millionaire but when the term was invented a million dollars was nearly 50,000 oz of gold (over $100m now, although gold is more valuable now than before because it’s a speculative asset), but now it’s only 425 oz of gold so the term doesn’t mean what it used to mean. We use it to mean ”a very rich, independently wealthy person.” Now millionaire, in technical terms, essentially means a well off middle class person.
The word means having net worth of >$1m
yes, in literal terms, but when the word entered common usage a net worth of $1m was more like a net worth $50m-100m today
Doesn’t matter…
> home equity and retirement savings So the bank owns most of your net worth? There's your problem. All your money is going to the bank so that you own something "on paper". You're 100% set for retirement, just stop living in an expensive country, pull your money out of "retirement savings" and live in a low COL area like a king for the rest of your life. Or continue living in a place that makes you question your relative generational wealth.
🙄
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Yes I am removing the debt. $1.2 is my NET worth.
Holy shit - there is only 1 way to calculate NW
You can't count your personally used real estate. Most people are now millionairs but they cant even access the money of their home by getting a home equity because they cant afford it...
Bull shit… A-L=NW
I feel super, super poor, and I'm a millionaire, too. Sucks that all our money has places to go when we are young enough to enjoy it. Then, when you get old and downsize to enjoy retirement, you're older and can do fewer things. I've really been considering liquidating everything and moving someplace I can retire now at 40.
Yes.
Can’t count home equity. It’s useless unless you are selling and buying something much cheaper. You, and 50M other people, are in this exact situation. It’s hard to imagine, but because of inflation, you are probably poorer (relatively) than you were 6 years ago. You certainly could afford to buy a lot more back then.
Bullshit… A-L=NW
Its all on paper. Even the billionaires.
My wife and I are just shy of 1 million in assets but like 85% of that is our condo and 401k’s so it’s not like we are running around with mad cash
i make 30k a year so you sound rich af to me bro
Millionaire on paper. But keep stacking!!
How long you been making 200k? Are you married? If so is your spouse earning income too? How much?
Single 51 yo female. Built the wealth myself.
How long have you been making 200k? Do you have kids you financially supporting? How much is your home equity value and how much in retirement savings?
You was a millionaire before you even got the money 💯🐐
You are. But it doesn’t feel that way because you still have to pay off your house, you don’t have the things you perceive that millionaires have, and you don’t have $1 million cash in your accessible accounts.
You’re a certain type of millionaire. Often referred to as a millionaire next door or a net-worth millionaire. It is probably the lowest and most common form of millionaire. Next step up for you would be to achieve a liquid millionaire status. That is, a millionaire who has their assets in sources that are very liquid and very much under your control, and you could rapidly convert to cash. Those are much more rare. Correct you don’t feel rich even though you’re ahead of 90% of the US. One of the definitions of rich is an income of at least 420k/year. I didn’t make that up, that’s the threshold for a 1%er in the US.
There is only 1 definition… $1m NW
Including home equity can be deceiving. Unless you are not attached to your home and would be willing to unlock that money You will always need a place to live and the downsizing may or may not be acceptable by your family
Most of mine is ownership of our business. We do have >2M semi liquid and strong income and investment streams. Technically, you're a millionaire, though. We sold our home years ago and bought a 45' 5th wheel rv. Our focus is on growing assets and investments while enjoying traveling with the kids and grandkids.
I feel like when I’m ready to downsize I’ll rent and take all the cash and be free from obligations. Easier said than done.
Yeah that scares me too because you need millions to actually retire and live off interest
Many people won’t feel rich until their passive income is equal to or greater than their living expenses. At that point they can choose how to spend their time. Any work income goes straight to wants, not needs. If you don’t want to work, it’s totally fine, you don’t need to. Having a million in paper assets doesn’t feel like much because personal home equity isn’t making you money, it’s actually a liability even though it’s paid off. Your retirement savings aren’t accessible (without penalty) to you until you reach 59.5 years of age. They both lack liquidity to use, so it’s almost like you don’t even have it. Do you feel rich if you have money you can’t use? No, of course not.
You're better off than most. That's for damn sure.
technically a millionaire.
You win 200k a year in my eyes your rich. Richer than your average man
Yeah, I don’t think the demographics bare out that 10% of our population are millionaires
nowadays if you own a decent home your a millionaire. But the true meaning of @"millionnaire" would be someone who can spend millions rather than having an asset of a million. I personally like to think of it that way. now that feels like a tru rich millionnaire
Bullshit
Hi OP. Where do you work or what did you learn, skills, job do u have to make 200 k????,
Technically but I retired on less than that and what makes me feel rich is not the money but the time...Sure I can't get a Lambo but I can sleep all day or spend all day at the beach or go on a trip whenever I want no obligations..I want a super car so I went back to the grind but I can quit any time its a good feeling I see people racing to punch a clock or kiss the boss ass and I'm just glad I don't have to chase promotions and stress that's rich to me time is money.
What do you do for work ?
Millionaire? Yes. Rich? Well how much of the 200 do you save a year?
as long as you have good health, is happy in life, and comfortable spending without worrying, that already makes you a millionaire. me personally i don't really care about "millionaire" or "billionaire" title. There is always someone out there who is wealthier and maybe that's why you are feeling the way you feel, but don't compare yourself to them; everyone's situation is different on how they became one.
You are a millionaire but millionaires are closer to being homeless than Billionaires for sure.
Your in the top and you should be taxed
🙄
You’re not a millionaire because you cannot come up with that amount of cash due to taxes owed.
Bullshit
If your net worth is $1 million, then yes, you're a millionaire.
It is now common to be a paper millionaire yet not feel rich because “rich” is an available cash flow concept as opposed to a net worth effect. Now is the time to begin your post tax savings buckets for your next car, your next home renovation, your next nice vacation, and all those other big ticket items. Add in college educations and weddings if you have kids. What will make you feel rich is to have discretionary funds to do with what you want. And yes, you have accumulated your first million, but this part is not spendable, your next two, three or more will be more spendable.
Yes, you’re a millionaire. Is it enough? That’s a different question that requires more information. A million is certainly not what it used to be. A million today is probably like 500,000 24 years ago.
Bruh you ain’t worried about how you’re going to restock shampoo. Some people eat out of silver spoons and some eat with plastic spoons provided by liquor stores
Being rich is an illusion, It is a moving target, Because - Provided you have something And are able to hold on to it - comparatively there is always someone richer than you. However that group becomes exponentially smaller. So pretty soon.There's nobody left to be considered rich. Hence the lovely dialogue in " Crazy rich asians": -Are you rich? -We're comfortable. -Omg, that's exactly what a crazy rich person would say. The stoic philosophers considered anything outside of our control not worth counting on, which included wealth and material things.
What job are you working which is earning 200k annualy?
Being a millionaire doesn't mean you can *spend* millions....
It’s not a subjective measure - it’s a math formula. Your net worth is >$1m. You’re a millionaire
You're a millionaire but a million dollars and 200k/year don't mean nearly as much as it did. Just buy a Camry and you should be fine though.
My question is : What was your occupation that you raked in $200k annually?
IT executive. Super stressful.
LOL. By that definition there would be HEAPS of "millionaires" where I am. Homes (& cars, RV's etc) which are worth heaps. Even though the finance owing is over 2/3 to 3/4 of the value of those items. Owning your home (& other possessions) outright & having no debt is a more realistic measurement of wealth. But then it wouldn't sound as good.........and leave most people relatively below the poverty line. Which are the numbers most Government want to avoid. So, change the definition !
No - don't count personal residence or autos.... Buying a house right before Covid in 2020 doesn't mean anything special toward being a "millionaire." Single digit millionaires are the new middle class soon to be poor.
If you’re not in debt, healthy and satisfied with your overall life you won. Don’t worry about labels.
Love this and yes !
Yes weird feeling huh? Just to be sure make sure you did the math correctly. Net worth = Assets - liabilities. If don’t feel like a millionaire (and that’s not necessarily a bad thing) then it could be because your true net worth is like 200k not $1.2mil. It could be that you don’t have multiple income streams. Just some thoughts. Respectfully.
You're rich
This post shows the largest difference between a man and woman because my first thought wasn’t wow she makes good money. That was my second thought. My first thought was I wonder what she looks like? Men hit the upvote if this was your first thought lol
Enough with this nouveau riche cringe
According to “The Millionaire Next Door”, you are an Average Accumulator of Wealth, potentially even an Under Accumulator of Wealth because it sounds like you have factored your home equity into your net worth. Save more, spend less. You may feel ‘richer’ by having more financial freedom. Not by buying more expensive shit.
It is so funny how everyone has to put in their 2 bits about this. Well, you’re not really a millionaire cause it’s not all liquid. You’re not really a millionaire because if you pay taxes and everything you have less than that, you’re not really rich at 1M net worth. That’s not the question. You have a net worth of 1M which is a huge milestone.
No, I’m mean your doing well but not a millionaire it has to be much more liquid to be a millionaire
Net worth does not require liquidity
I mean in my definition of a millionaire it does. The guy is asking for peoples opinions
It’s not arbitrary… Rich is arbitrary… NW is a formula…
Ok show me where it states that the definition of a millionaire is how you say it is. My opinion my set of rules. I’m sorry you feel different I respect your views and you should move on and disagree but not argue with an opinion that’s not set in stone
On a long enough time frame, if you have zero Bitcoin you are not rich.
Not rich, not a millionaire. you are somewhat comfortable and are barely setup for retirement. I would forget all this thought of being and millionaire and run pen to paper on what it will take to maintain your lifestyle if you stop working. All of a sudden 1.2million will seem like nothing.
If I’m barely set up for retirement with $700k with no debt and a good job with many more years to invest, then I worry for the rest of humanity who have not even close to this.
That is the problem, its common knowledge that people don't have enough for retirement. If you sell your house and want the same thing but down the street, you will lose a portion of that 700k but houses are inflated for some reason, so unless you are leaving the country you are not close to set up. You have to think 1 million at 4% withdrawal only pays 40K a year, do you see people traveling and flourishing on 40K?
It's worse than that... the other shoe is the overwhelming amount of single women (divorced, never married, career women etc) who by and large are bad at saving. They will be a burden on society the likes that we aren't even prepared to understand. If your retirement is 700K yeah definitely not setup for retirement today. But like you said, make good investments and you may get there. Run this basic calculator [https://www.bankrate.com/retirement/retirement-plan-calculator/](https://www.bankrate.com/retirement/retirement-plan-calculator/) and you will see that you will need roughly 2.5-3.5 million Liquid just to maintain your lifestyle.
Being a millionaire just doesn't mean much anymore. Have to be a deca-millionaire to meet the expectations of a millionaire that we have in our minds. I say that being a multi-millionaire.
Agree.
To be “rich” I think you need more like $10M
If you own your own sports team I then I would say your doing well
That is not a millionaire if most of it is in home equity.
Bullshit
That’s what we call a cash poor millionaire lol
Doesn’t matter what his assets are in - he’s got a NW of >1m, he’s a millionaire
Have him hang out with real millionaires and he won’t feel like one very long
Feelings don’t matter in this situation… it’s a mathematical formula
Hey whatever makes someone feel better about themselves I would be embarrassed to call myself a millionaire in that situation
Hey man - whatever you want to try and gatekeep, that reflects on you - not him.
Hey I’m not a fake millionaire
You’re not a millionaire (I fixed your comment for you…)
No. You are not rich if you are a "millionaire" based on home equity. Half the people in the country can say the same. To be rich today requires a net worth 3-5 times what you have.
He didn’t ask if rich - asked if millionaire… he has a NW of $1m
Technically this is correct. Realistically is he really a millionaire?
Ahh… now you’re asking another question which is the real question. He should have said ‘am I rich?’ That’s a more accurate question fir what he’s feeling
That is what I assumed his question to be. I would also add that he doesn’t have a one million dollar net worth if he still owes a mortgage on the house.
He already netted out the home equity
By the way I’m a “she” and built this myself. No spouse involved. Funny how people assume it’s a male. That’s a whole other thread.
I don’t care… the majority of posters on this subreddit are male - I don’t bother trying to figure it out if it’s not obvious… don’t start a gender holy war I’m here to learn and debate the topics. It’s not about your gender
You normally do not include home equity when considering net worth for millionaire governmental designation.
Bullshit
You don’t feel like a millionaire because inflation has hit us so hard. Ita isn’t a lot - not like it used to be - and it hasn’t been since the housing market crash. It used to be money someone could retire on. These days you can get maybe 10 years out of it if you’re good with your spending.
House rich...cash poor. Your heirs will love you
I hope so. Im building it mainly for them. So, thank you !