More millionaires despite tough times
About 4.5% of American households have $1 million or more in 'investable assets.'
This post comes from Lynn Mucken at MSN Money.
While many Americans are struggling to handle the mortgage, the $100 grocery basket and the $75 fill-up, these rocky times have been good for a lot of people.
According to the Boston Consulting Group, the number of millionaire households in the United States grew 9.9%, from 4.75 million to 5.2 million in 2010, about 4.5% of the nation's 115 million households.
Oh, one other little figure: Those are cash millionaires. The BCG figures don't include homes, luxury goods and ownership in one's own company, but "investable assets" only. Post continues after video.
So if you are desperately seeking the glow that comes from millionaire status, you can't scramble in by including your home, which, by the way, is probably worth only two-thirds of what it was five years ago. (The BCG report did not give the mean net worth of U.S. households, and it is difficult to estimate since most reports include the value of the home.)
The report also examined the worldwide growth in wealthy households. It said:
Millionaire households represented just 0.9 percent of all households but owned 39 percent of global wealth, up from 37 percent in 2009. The number of millionaire households increased by 12.2 percent in 2010 to about 12.5 million. The United States had by far the most millionaire households (5.2 million), followed by Japan, China, the United Kingdom, and Germany.
Of course, mere millionaires are paupers compared with what BCG defined as "ultra high net worth" households, including the 2,692 in the U.S. worth more than $100 million. That's a lot of loose cash, and only about 1 in every 5.6 million households have it.
And how did these people move up the financial ladder at a time when much of America was sliding down? The stock market, according to BCG.
"The strong performance of the financial markets accounted for the lion's share of the growth," said Monish Kumar, a BCG partner and co-author of the report.
While Kumar said this "bodes well for the future," he did issue a warning. "But the positive signs should not be read a return to normal," he said. "A number of disruptive forces, including increased regulatory oversight and changes in client behavior, are rewriting the rules of the game -- both literally and figuratively."
Naturally, these numbers are seen in different ways by different people. Here are three comments from readers of Life Inc., a personal-finance site:
- "We don't need redistribution of wealth," wrote "John Lucas." "We just need to allow more folks in the upper income brackets to experience all aspects of what it means to be an American. This includes giving them the opportunity to pay their fair share of taxes. Trickle WHAT? Thanks Ronny."
- Wrote "Julio Gesklin": "I immigrated legally from South America 30 years ago, coming here with $180 in my pocket, worked ... and today I have a business that 70 families depend on. I don't have to feel guilty if I now have a house and business worth more than a million dollars. … The moral of the story is that if you want something, go get it!"
- Chimed in "David Workman": "Being a millionaire just isn't what it used to be, when adjusting for inflation. Being a millionaire today is no harder than having a net worth of $100K in the 1960s. Now, having a net worth of $10 million? That's the new millionaire."
Here are a couple reactions from readers of the The Wall Street Journal's The Wealth Report blog:
- Wrote "Wiseguy": "No doubt this is another data point for the socialists to claim that is why they should tax the rich (even more). ... The fact that you are not a millionaire is more likely a function of yourselves, e.g., laziness, stupidity, don't care about money, overspending, making bad life decisions."
- Said "Anarchist": "Distribute all that wealth among world's population and after one decade the same millionaires would reappear. Stupid do not become rich ... unless they inherit from others."
- And a blast from the past, courtesy of WSJ reader "Anonymous": "Reminds me of Mark Twain's comment: 'I'm opposed to millionaires, but I'd take the job if they offered it to me.'"
More on MSN Money:
A strong, healthy, viable middle class is necessary for a strong, healthy, and viable republic.
Our Republic cannot stand if the middle class continues to shrink.
Excuse ME for not being born with a silver spoon in my mouth! I am so sick in tired of people saying that we are lazy, how do you know, because maybe that's what you are, sitting around the pool sipping martini's. Well guess what the majority of working families are not lazy, nor are the millions of people who cannot find a job, which I am sure you will blame us for that as well. We are very hard working people and always will be!
While the rich get richer and the middle class becomes extinct, and the poor, elder, disabled, homeless, getter poorer, and you wonder why we want the wealthy to pay more in taxes, maybe if they were in our shoes they might just understand what its like to live from pay check to pay check. We pay more than our share in taxes, its time for the wealthy to pay their share as well, instead of finding all those loop holes from paying their fair share.
The Republicans in Washington, and all the states that are Republican controlled will pay the price in the next election, hell Wisconsin's 6 Republican Senators, and the Gov are seeing first hand just how pissed off the American People are, just wait watch and see!!!
Its true, the rich get richer and the poor get poorer. Invest in lead and copper in the form of ammo and stock up firearms.
So, here are some more numbers:
74% of Americans live paycheck to paycheck (if they get paychecks at all)
90% of Americans make less than 32,000 dollars a year
67% of seniors live in poverty
72% of Children live in poverty
43% of single mothers live in poverty
37% of all Americans live in poverty
That fact that 5.4 % of American HOUSEHOLDS (not of all Americans but of american households) hold more than $1,000,000 in wealth values does little more than support the fact that the GINI index (wealth distribution) in the United State is more like the gini index of a 'third world' dictatorship than any of the other so-called "first world" nations.
And, by the way if millionaires create jobs, exactly how is it we have fewer livable wage job today in American (as a percentage of jobs per 100,000 people) than we did in the year 2000 and how is it that we lost some 5 million middle class jobs during the first four years after the Repugnut-con's tax break to the most wealthy 5% of Americans
The only way that I see America getting back to a strong-enough middle-class that can afford to buy homes again is through raising upper-income tax brackets back to historical norms while bringing our troops home, substantially cutting defense spending, cutting unfair and unneeded tax breaks for wealthy corporations, and acting to protect our own industries and jobs from unfair foreign competition. We can manufacture almost all of our consumer products here at home just like we used to do.
Today's rich are getting richer precisely because they have been able to benefit from investment in the globalization of our jobs to the lowest-cost worldwide bidder who is willing to violate the most environmental protection laws. What happens when China runs out of coal, oil, and enough fresh water to support their population in just 30 more years? Perhaps you lucky few will just move your factories to the next cheapest place and attempt to dominate their workforce and ruin their local environment instead?
Giving the wealthy more money has not translated into job security or income growth for America's bottom 90%, no matter how much that worker productivity has improved. The wealthy seem addicted to high levels of investment risk and ever-increasing profits, as Wall Street and other investment markets have become hardly any more than giant casinos. There is absolutely no point in the average American worker even trying to play at the casino called Wall Street, when it is dominated by the big players, and investing in meager middle-income retirement funds has and will again cost the little guy his shirt, while the wealthy keep taking an ever-greater percentage of our available money supply.
There is nothing greater than the thrill of great financial victory, or more heartbreaking than the agony of a lifetime beset with a constantly diminishing financial expectation, punctuated by the occasional recession where far too many average Americans have lost everything that they have owned repeatedly. So, it would not surprise me in the least if someday the kind of organized revolutionary upset directed against the rich that we have seen in the Arab world this Spring visits our shores too.
1M is still better to have than not but it is not as much money as it used to be even 10 years ago.
I remember in 2001 I could live on 1M for 60 years. I am still single and my expense items and habits are pretty much the same and 1M would be good enough for only 25 years.
We do not really think about it, but we are paying through the nose for the two wars and everything else. You work harder, you gat WAY less stuff for it. My first Saturn SL2 2001 was $14500 - totally pimped out (as for Saturn). In 2007 ION in the same configuration was $23000. I could eat like a king and drive to work on $400-$500 a month in 2001. But the gallon of fuel was $0.98 and a triple-decker club sandwich with drink and chips was 5.75.
Today I spend $1300-$1400 a month for exactly the same lifestyle with the same food in the same restaurants and the same driving distance. But today (I mean literally today) my burger with fries and drink was $12 at Five Guys. It costs $85 to refuel my car that does 29MPG - thanks God, so the tank lasts for an entire week.
Naturally I make more than in 2001, but somehow my lifestyle is exactly the same. I save more too (really less in value, but more in the numbers) and I am pretty sure that in 10 years I will be "a millionaire" too.
Reagan was wrong about trickle-down economics. When no less an authority than Warren Buffett says TDE is nonsense, I'm sold. Giving the wealthiest 5% of Americans a tax break (as if they really needed it) does not mean the lower income classes benefit. The wealthy keep the money and reinvest it. Buffett said the wealthy should pay more in taxes
“The rich are always going to say that, you know, just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you,” Buffett, chief executive officer of Berkshire Hathaway said in the interview. “But that has not worked the last 10 years, and I hope the American public is catching on.” - quoted from Bloomberg
Chimed in "David Workman": "Being a millionaire just isn't what it used to be, when adjusting for inflation. Being a millionaire today is no harder than having a net worth of $100K in the 1960s. Now, having a net worth of $10 million? That's the new millionaire."
The above statement is very correct. Just since I started into the workforce in the early 1970s the minimum wage has increased from $1.60 per hour to $7.25 per hour. In 1979 I used to rent a 2-bedroom/2-bath 2-story desirable townhouse for $200 per month when I was earning $9.35 per hour working 50 hours per week in a large factory. Gas was running $1.25 per gallon and food costs, utility costs, and health insurance coverage were all running at 1/4 or less of what they cost now. Is my income now $37.40 per hour plus full included benefits including an employer-paid retirement plan? An income of over $100K yearly is what would be necessary just to have kept pace with what I earned at the age of 22 working in a factory in 1979.
In 1982-83 I earned 25 cents per mile plus $10 per delivery or pickup driving a semi back and forth from Chicago to the East Coast delivering multi-stop refrigerated food products. Is my income now 75 cents per mile plus $30 per stop, since my living costs have more than tripled since 1982? No, in fact, my wages are only up 50% since 1982, despite my additional 30 years of experience in my field, which means that my buying power was double in 1982 over what it is now.
For the average middle and working-class American, wages have been stagnant or have fallen heavily since the 1970s, while average incomes for those of us in the top 10% of the income heap have risen four-fold during the same period. How long do you 10% types think that you can keep reaming the bottom 90% before there is trouble? What has happened this Spring in both Egypt and Tunisia is what happens when the bottom 90% gets tired of getting walked all over.
"The strong performance of the financial markets accounted for the lion's share of the growth,"
The Ponzi schemes, outrageous fees/fines/fine print, minute-by-minute manipulations of the markets, oops-i'm-sorry lousy advice from "advisors", high-salaried "representatives" and "shrewd" bankers, commissions for real estate agents who don't do jack sh!t except unlock a door/withold information/fill in the blanks on template paperwork, and all the other rip-off "business" people who keep selling the American pipe dream that all us stupid, lazy, ignorant peons who bust our asses for 20 years, loyal to our companies and still get laid off/fired, keep buying into. I'm not crying; always knew what a scam consumerism is and I've been gladly working and studying since a babe (first job at 8 years old). Financial professionals get rich while others actually have to work.
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