Millionaire

A large suburban home valued at roughly $1,000,000 (2006) in Salinas, California, shown for scale of purchasing power.

A millionaire is an individual whose net worth or wealth is equal to or exceeds one million units of currency. It can also be a person who owns one million units of currency in a bank account or savings account. Depending on the currency, a certain level of prestige is associated with being a millionaire, which makes that amount of wealth a goal for some, and almost unattainable for others.^[1] In countries that use the short scale number naming system, a billionaire is someone who has at least a thousand times a million dollars, euros, or the currency of the given country (e.g. $1,000,000,000). In contrast, a billionaire in countries that use the long scale number naming system would be someone who has at least a million times a million units of currency (e.g. $1,000,000,000,000). There is no evidence that anyone on the planet has achieved the latter in either US dollars or euros. The increasing number of millionaires is partially due to prevailing economics, especially inflation; as the individual value of each unit of currency decreases, achieving a million of these becomes easier. The purchasing power of a million US dollars in 1959 is equivalent to $8.12 million in 2016. ^[2][3]

Terminology

The word was first used (as millionnaire, double "n") in French in 1719 by Steven Fentiman, and is first recorded in English (millionaire, as a French term) in a letter of Lord Byron of 1816, then in print in Vivian Grey, a novel of 1826 by Benjamin Disraeli.^[4] An earlier English word "millionary" was used in 1786 by Thomas Jefferson while serving as Minister to France; he wrote: "The poorest labourer stood on equal ground with the wealthiest Millionary".^[5] The first American printed use of the word is thought to be in an obituary of New York tobacco manufacturer Pierre Lorillard II in 1843.^[6]

While statistics regarding financial assets and net worth are presented by household, the term is also often used to describe only the individual who has amassed the assets as millionaire. That is, even though the term statistically refers only to households, common usage is often in reference only to an individual.

Net worth vs. financial assets

There are multiple approaches to determining a person's status as a millionaire. One of the two most commonly used measurements is net worth, which counts the total value of all property owned by a household minus the household's debts. According to this definition, a household owning an $800k home, $50k of furnishings, two cars worth $60k, a $60k retirement savings account, $45k in mutual funds, and a $325k vacation home with a $250k mortgage, $40k in car loans, and $25k in credit card debt would be worth about $1,025,000; and every individual in this household would thus be a millionaire. However, according to the net financial assets measurement used for some specific applications (such as evaluating an investor's expected tolerance for risk for stockbroker ethics), equity in one's principal residence is excluded, as are lifestyle assets, such as the car and furniture. Therefore, the above example household would only have net financial assets of $105,000. Another term used is "net investable assets" or working capital. These practitioners may use the term "millionaire" to mean somebody who is free to invest a million units of currency through them as broker. For similar reasons, those who market goods, services, and investments to high-net-worth individuals (HNWIs) are careful to specify a net worth "not counting principal residence." At the end of 2011, there were around 5.1 million HNWIs in the US,^[7] while at the same time, there were 11 million millionaires^[8] in a total of 3.5 million millionaire households,^[9] including those 5.1 million HNWIs.

In the real estate bubble up to 2007, average house prices in some U.S. regions exceeded $1 million, but many homeowners owed large amounts to banks holding mortgages on their homes. For this reason there are many people in million-dollar homes whose net worth is far short of a million—in some cases the net worth is actually negative.

Influence

While millionaires constitute only a small percentage of the population, they hold substantial control over economic resources with the most powerful and prominent individuals usually ranking among them. Also, the total amount of money held by millionaires can equal the same amount of money held by a far higher number of poor people. The Gini coefficient, and other measures in economics, estimated for each country, are useful for determining how many of the poorest people have the equivalent total wealth of the few richest in the country. Forbes and Fortune magazines maintain lists of people based on their net worth and are generally considered authorities on the subject. Forbes listed 1,645 dollar billionaires in 2014, with an aggregate net worth of $6.4 trillion, an increase from $5.4 trillion the previous year.^[10] (see US-dollar billionaires in the world).

Sixteen percent of millionaires inherited their fortunes. Forty-seven percent of millionaires are business owners. Twenty-three percent of the world's millionaires got that way through paid work, consisting mostly of skilled professionals or managers.^[11] Millionaires are, on average, 61 years old with $3.05 million in assets.^[12]

Historical worth

Depending on how it is calculated, a million US dollars in 1900 is equivalent to ($28.4 million in 2016).^[2]

• $24,766,584.77 using the consumer price index,
• $21,224,697.05 using the GDP deflator,
• $61,441,702.95 using gold^[13]
• $114,128,571.43 using the unskilled wage,
• $162,813,054.25 using the nominal GDP per capita,
• $641,531,874.47 using the relative share of GDP,

Thus one would need to have almost thirty million dollars today to have the purchasing power of a US millionaire in 1900, or more than a hundred million dollars to have the same impact on the US economy.

Multimillionaire

Another commonly used term is multimillionaire which usually refers to individuals with net assets of US$10 million or more. There are approximately 510,000 such individuals worldwide in 2014 according to New World Wealth ^[14][15][16]

Roughly 1.2% of US$ millionaires can also correctly be identified as ultra-high-net-worth individuals (ultra-HNWIs), those with a net worth or wealth of $30 million or more. There are approximately 195,000 ultra-HNWIs in the world in 2014 according to Wealth-X.

The rising prevalence of people possessing ever increasing quantities of wealth has given rise to additional terms to further differentiate millionaires. A hectomillionaire has a net worth of more than 100 million units of currency. The term centimillionaire has become synonymous with hectomillionaire in America, despite the centi- prefix meaning the one hundredth of a whole, not 100, in the metric system.^[17]

Number of millionaires in the world

Number of millionaires and ultra-millionaires (more than $30M)

The "World Wealth Report" is a report on individuals with a net worth of at least $1 million in all assets except their primary residence. The report is compiled annually by Capgemini for RBC Wealth Management (as of 2014 Previously, the report was compiled for Merrill Lynch).

The World Wealth Report 2013 found the World’s High Net Worth (HNW) population growing to 12 million with their assets expected to rise to $55.8 trillion by 2015.^[18]

Some growth in international wealth and the number of high-net-worth individuals can be attributed to the weakness of the US dollar, as stated in the report.

According to the World Wealth Report 2010, the number of millionaires in Asia Pacific (Asia minus the Middle East) surpassed Europe’s for the first time in 2009.^[19][20]

Number of millionaire households by country

The following is a list of the countries with the most millionaire households in U.S. dollars worldwide according to the Boston Consulting Group's 2015 study.^[21][22]

Rank	Country	Number of US dollar millionaire households (2014)
1	United States	6,906,000
2	China	3,613,000
3	Japan	1,125,000
4	United Kingdom	731,000
5	Switzerland	461,000
6	Canada	418,000
7	Germany	350,000
8	Taiwan	325,000
9	Italy	291,000
10	Russia	242,000
11	France	230,000
12	Hong Kong	229,000
13	Australia	215,000
14	Netherlands	187,000
15	Belgium	164,000

Number of millionaires by city

The following is a list of the cities with the most number of US$ millionaires as of August 2014 according to the South African consultancy company "New World Wealth".^[23]

Rank	Country	Number of US dollar millionaires (2014)
1	London	376,000
2	New York	320,000
3	Tokyo	266,000
4	Singapore	224,000
5	Hong Kong	212,000
6	Los Angeles	165,000
7	Frankfurt	143,000
8	Mexico City	139,000
9	Chicago	134,000
10	San Francisco	133,000

United States

There is a wide disparity in the estimates of the number of millionaires residing currently in the United States. A quarterly report prepared by the Economist Intelligence Unit on behalf of Barclays Wealth in 2007 estimated that there were 16.6 million millionaires in the USA.^[24] At the end of 2011, there were around 5.1 million HNWIs in the US,^[7] while at the same time, there were 11 million millionaires^[8] in a total of 3.5 million millionaire households,^[9] including those 5.1 million HNWIs.

According to TNS Financial Services, as reported by CNN Money, 2 million households in the US alone had a net worth of at least $1 million excluding primary residences in 2005.^[25] According to TNS, in mid-2006 the number of millionaire US households was 9.3 million, with an increase of half a million since 2005.^[26] Millionaire households thus constituted roughly seven percent of all American households. The study also found that half of all millionaire households in the US were headed by retirees. In 2004 the United States saw a "33 percent increase over the 6.2 million households that met that criteria in 2003," fueled largely by the country's real estate boom.^[27]

A report by Capgemini for Merrill Lynch on the other hand stated that in 2007 there were approximately 3,028,000 households in the United States who hold at least US$1 million in financial assets, excluding collectibles, consumables, consumer durables and primary residences.^[28]

According to TNS Financial Services, Los Angeles County has the highest number of millionaires,^[29] totalling over 262,800 households in mid-2006.^[26] Los Angeles County is also the largest single jurisdiction of any kind in the United States.

Entertainment

Great wealth and its consequences is a popular theme in fiction. The Millionaire was the title of a 1955 TV series about an unseen man of wealth who gave away $1,000,000 to a different person each episode, and a 1931 motion picture about a retired millionaire who buys a gas station to ease his boredom. Millionaire is also a common nickname of the international quiz show Who Wants to Be a Millionaire?. Who Wants to Be a Super Millionaire also aired in the U.S., where contestants could win a total of $10,000,000. Many reality television shows offer one million dollars as first prize.

See also

Look up millionaire in Wiktionary, the free dictionary.

Lists

• List of African millionaires
• Lists of billionaires
• Sunday Times Rich List

References