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Ever since I was a kid, I dreamed of becoming a millionaire. My introduction to millionaires began when I watched Robin Leach on Lifestyles of the Rich and Famous. When I thought about millionaires, I thought of an exclusive club. They traveled via private jet around the world, went on lavish vacations, and had incredible adventures. In essence, they led a lifestyle that so many only can dream about.
This inflated image was quickly popped when I read the Millionaire Next Door. That book demystified the illustrious millionaire. In reality, the jet setting lifestyle is not indicative of wealth necessarily. Many rich folks utilize stealth wealth, so you’d never actually assume that they had a lot of money.
Credit Suisse recently published their annual Global Wealth Report, showing that nearly 1.1 million Americans became millionaires in 2017. Astoundingly, that brings the total number of millionaires in the US to over 15 million, or nearly 1 out of every 20 people in the US. That means that 5% of the population in the US is a millionaire.
Based on the numbers above, there are many more millionaires among us than I actually realized. Many must be displaying stealth wealth at its finest.
What has driven the increase of millionaires in the US today?
Rise of the Stock Market
One of the biggest reasons, according to the Credit Suisse report, is the rise of the stock market.
“An important driver for a number of years was the Fed’s quantitative easing, yielding low interest rates that raised bond prices and contributed to economic recovery and higher stock prices,” determined Credit Suisse.
This is now the ninth consecutive year that the report attributes the rise in wealth directly to the stock market. Credit Suisse shared that the proposals by President Donald Trump of lower taxes, deregulation, and fiscal stimulus, has led to business and market conditions strengthening this year. In turn, the stock market has risen, which as of writing this, is up over 16% for the S&P 500 this year and up nearly 25% since President Trump took office.
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“Wealth per adult has now fully recovered [from the financial crisis lows of 2009], and is 30% above the 2006 level,” Credit Suisse reported. “There is some uncertainty about future interest rates and stock market prospects, but otherwise the signs are mostly positive for household wealth.”
Speaking of positive signs…
Recently, the consumer confidence level rose to 125.9 in October 2017. That is the highest that it has been in 17 years, since December 2000 when it reached 128.6. Clearly, consumers like the economic trajectory of our country at this time.
Another interesting stat from the report was that Americans now account for 43% of the world’s millionaires, despite representing just a little over 4% of the world’s population.
However, the median wealth in the US is $55,876. That puts us at 21st place in the world, alongside economic powerhouses [sarcasm], Austria and Greece.
Countries with the Highest Median Wealth
- Switzerland: $229,000
- Australia: $195,400
- Belgium: $161,000
- New Zealand: $147,600
- Japan: $123,700
- France: $119,700
- Singapore: $108,900
- United Kingdom: $102,600
- Canada: $91,058
- Taiwan: $87,257
While Americans may not make the most money, we definitely know how to become wealthy once we start making it.
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Work hard for a long time and save something and you will become a millionaire. My grandfather has a little over a million dollars. Was married with three kids and only had his income. However, when you start working as a kid consistently work until you are 70+ you can pretty easily become a millionaire if you just save a little bit.
On that line of thought life expectancy has gone up almost 10 years over the last 40 years which makes it much easier if your money is invested.
Grant @ Life Prep Couple recently posted…What To Do If Your 401K Plan Sucks
Yes, it’s pretty easy with consistent savings over decades to become a millionaire. However, many Americans (and others, I’m sure) are pretty money-foolish.
The difference between the 50,000-aire and the millionaire next door may well be that the 50,000-aire and his wife both have iPhone 8s. Also, one kid has a hand-me-down iPhone 7, but the other only has a 6 because someone spilled their daily $7 Starbucks on the other iPhone 7.
The $2000 for a couple of new iPhones will turn into $30,000 after 40 years at a decent return. Add an annual $1000 in Starbucks, and the $5000 they lose on a new SUV every 2 years, and the $15000 in real estate fees alone for ‘upgrading’ to a bigger house… spend every dime you have and soon you can’t help but (not) be a millionaire.
Great points Mikes!!! I definitely agree that people spend too much and don’t save enough. I’m personally still using an iPhone 5 and it works great 🙂
Thanks for stopping by Grant!!! Compound interest is the 8th wonder of the world according to Albert Einstein 🙂 That’s awesome to hear that your Grandfather was a millionaire. That’s amazing!!!
As you mentioned, one of the biggest problems with millionaire status is that it’s so often dependent on the whim of the stock market. So you can be a millionaire one day, and only a 700,000-aire the next (not that 700,000 is too bad either)
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Thanks for stopping by Dan!!! The number of millionaires is definitely dependent on the market. Hopefully it gets going up for awhile 🙂 I wouldn’t mind joining the group some day 🙂
The numbers surprised me. One in twenty people are millionaires. I’m not surprised that this bull market has created many of them, including myself. We reached the $1M mark a couple months ago, because of this strong stock market and real estate appreciation for our rentals.
I won’t be surprised if we become 6 figure net worth soon either. There is bound to be a correction at some point. But it’s okay, we’ll be buying at a bargain.
Congrats on reaching the $1m mark!!! That’s a huge accomplishment and sounds like you will definitely be reaching the multimillion dollar ranks between stock market and real estate market over the years 🙂
One problem I have with median income numbers is they don’t account for costs. Many of the countries listed have a high cost of living then the US, so it’s not apples to apples.
As for millionaires this also doesn’t surprise me. The last few years anyone that has money to invest has been making easy money due to the stock market returns. If you knew what your doing your probably doing well.
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I definitely agree that not all millionaires are made the same. A millionaire in San Francisco/New York City are much different they a low cost area. I definitely agree it’s been hard to be wrong during this bull market 🙂
I love that America is full of entrepreneurship, innovation, and talent. There’s a reason why Google, Microsoft, YouTube, and Apple were created in America and not anywhere else in the world.
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It’s amazing the melting pot that America has become and the amazing inventions that have come out. I definitely can’t wait to see what else is created over the years 🙂
I’m not American, but British. Our markets aren’t doing so great right now so the prospects of being a millionaire seems a far reach. But I guess it’s not impossible right?
Sorry to hear that Victoria!!! The US market has definitely been performing well over the past couple of years. Hopefully it stays that way for the foreseeable future 🙂
I’m not surprised since we have hit 9 years of this bull market. I’m sure we will lose many millionaires in the next crash. I’ve had a lot of people at work say, “OMG my 401k is doing awesome!” The tone is one of “wow I’m a genius!”
We just hit the 1/4 million mark so we aren’t there yet but have every intention of getting there.
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Thanks for sharing!!! I definitely agree that people are starting to get over confident. There are a lot of people thinking they can do no wrong in this market. It’ll be interesting to see what happens when the tide comes in 🙂
5% of the US population, wow, I didn’t know the percentage is that high. Yeah, the bull market really helped a lot. But the median wealth does not look rosy. Great info!
I definitely agree that the median wealth does not look in comparison. Hopefully another crisis doesn’t require people to finally wake up 🙂
In some ways, we are such a wealthy society. I wonder what the percentage could be if more people followed the tips here at MSM? But would that destroy our consumer led economy and ruin it for the 5% in the millionaire club? Tom
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Thanks for the kind words Tom!!! I would think that if people followed more of their tips to become millionaires that they could spend more time on things that they are passionate about which in turn could create more money and in turn allow more spending 🙂
Wow, 5%. Surprised by that and hoping to cross over in the next 2 years. I wonder what it means and/or matters? What does being a millionaire really mean, can’t someone be happy and FI on $250,000 or $500,000 based on lifestyles?
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I’m with you!!! If you can’t be happy with $500k, I’m not sure $1m is going to make you any happier. It’s just a number at the end of the day 🙂
I didn’t think it would be one in 20, seems like a lot. I wonder what the number is for Canada?
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I’d have to check to see if there are any studies on Canada. Nothing popped up when I did a brief check but I can do a deeper dive 🙂
“that brings the total number of millionaires in the US to over 15 million, or nearly 1 out of every 20 people in the US.”
Does that million dollar threshold include the value of one’s primary residence?
Yes, that includes homes in the net worth 🙂
I guess an average American must work harder and smarter to keep up with those on your median income list. Hmmm… possibly work longer hours just like in Japan? Not surprised at all about Singapore being on one of the top 10 lists in this category. I was there two months ago and was really impressed by this country. Simply drive around Singapore and you can tell how progressive the country and its people are. I would love to go to Switzerland one day.
Singapore has definitely transformed itself very quickly. I too would love to visit Switzerland. I’ve heard it is amazing!!!
Lol it seems like more and more people are becoming “millionaires” today. A million definitely isn’t the same as a million yesterday. But still, it’s a good start to achieve that first million lol… and yes, I know many in my city who are “millionaires” all because of the last several years of our hot real estate market, not because they were diligently saving and investing in index funds for over 10 years lol!
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Hahaha…thanks for sharing!!! Home prices have definitely inflated the net worth of many. Unless these folks move it’ll be hard to tap into that equity…unless they want to go into debt or move 🙂
Hopefully the number of US millionaires will keep going up. It’s just a matter of spreading the word of saving, investing and compounding but in our consumer-driven country it’s tough to get it through the majority of Americans.
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You are definitely right!!! When you see the perceived wealth on TV people say they want that. They don’t realize how unrealistic and fake that really is. Look at 50 Cents and some of the other entertainers that had lifestyles that weren’t real.
Wow! 5% of the population who are millionaires – I would not have guessed that. The stock market in the US has been on a very good run for a while and definitely this year. If it continues this way, there will be more joining the millionaires club. I’m not sure what the stats are here in Canada.
Thanks for stopping by Enoch!!! I’d be curious to hear as well. I know the real estate market has been on fire for you all, so I’m sure it’s been climbing 🙂
As a teacher, I don’t know that many millionaires. However, my sister is one, as well as a good colleague friend of mine. I hope to be part of the 2 comma club by in 6 years, assuming the market performs well.
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That’s awesome to hear that your sister and a colleague are millionaires. Plus being a millionaire in six years is quite the accomplishment. Can’t wait to hear about it!!!
A million dollars isn’t enough to do anything nowadays. You can’t even retire comfortably. In Toronto, it seems that everyone with a house is a millionaire (thanks to inflated real estate prices)
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Thanks for stopping by Troy!!! A million dollars definitely isn’t what it use to be 🙂
I feel that technology has created quite a few millionaires. Almost all startups pay in stock options. When these companies IPO a fresh batch of millionaires are minted. The tried and tested way is save and invest. It would be interesting to look at the age profile. Does it include real estate?
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The breakdown included real estate as well. So it should have captured the whole gambit of various ways to be millionaires 🙂