More millionaires now in US, but not all is gold
NEW YORK—A surging number of everyday Americans now boast a seven-figure net worth once the domain of celebrities and CEOs.
But the significance of the status has shifted as the ranks of millionaires grow.
Being a millionaire is “no longer a backstage pass to palatial estates and caviar bumps,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, a California wealth management firm. “It’s the new mass-affluent middleweight class, financially secure but two zeros short of private-jet territory.”
Wealth gap
A June report from Swiss bank UBS found that about one-tenth of American adults are members of the seven-digit club.
Thirty years ago, the Internal Revenue Service counted 1.6 million Americans with a net worth of $1 million or more. Last year, UBS put the number at 23.8 million, a nearly 15-fold increase.
But the expanding ranks of millionaires come as the gulf between rich and poor widens. The richest 10 percent of Americans hold two-thirds of household wealth, according to the Federal Reserve, averaging $8.1 million each.
Investment, savings
The bottom 50 percent hold 3 percent of wealth, with an average of just $60,000 to their names.
Federal Reserve data also show differences by race. Asian Americans outpace whites in median wealth, while Blacks and Hispanics trail in their net worth.
Barley was working as a journalist when her newspaper ended its pension program and she got a lump-sum payout of about $5,000.
A colleague convinced her to invest it in a retirement account, and she’s stashed away whatever she could since.
In time, she found catharsis in amassing savings, checking her balances after a tough day at work. She still lives in her modest Orlando, Florida home, socks away half her paycheck, fills the napkin holder with takeout napkins and lines trash cans with grocery bags.
But Barley says it feels powerful to cross a threshold she never imagined reaching as a child.
“But it’s not as glamorous as the ideas in your head,” she said.
No luxuries
The resilience of financial markets and the ease of investing in broad-based, low-fee index funds have fueled the balances of many Americans who don’t earn massive salaries or inherit family fortunes.
The vast majority own stocks and a home. Most live below their means. They value education and teach financial responsibility to their children.
Jason Breck, 48, of Fishers, Indiana, reached the million-dollar mark nine years ago. He promptly quit his job in automotive marketing, where he generally earned around $60,000 a year but managed to stow away around 70 percent of his pay.
He continues to grow his balance by sticking to a tight budget and keeping expenses to $1,500 a month when he and his wife are not traveling.
There is no lawn crew to cut the grass, no Netflix or Amazon Prime, no Uber Eats. They fly economy. They drive a 2005 Toyota.
“For us, a million dollars buys us freedom and peace of mind,” he said. “We’re not yacht-rich, but for us, we’re time rich.”
