Where the money is in America...still NE!

[Orchidflower]

It amazes me that the real money in the country is still on the East coast. I wonder why it hasn't drifted more all over the US by now....geesh.... I mean, you could start a technology and financial business anywhere...even last place Mississippi...couldn't you? I mean, what is stopping people from getting an education and starting these businesses in, say, the Midwest? We folks in other areas need to get on the stick I think.

Millionaires call Md. home, study finds - Baltimore Business Journal:

 

[brewer12345]

I'd imagine labor pool is a major factor. I don't particularly need to be around NYC except for t he fact that there is nowhere in the wrld with more and better financial services jobs (except maybe London and, in 20 years, Dubai).

 

[Milton]

There may be more millionaires in the East, but let's face it: a million dollars isn't much any more.

According to Bernstein and Swan (All the Money in the World: How the Forbes 400 Make - and Spend - Their Fortunes, chapter 6), California has outpaced New York as the residence of choice for billionaires, and is steadily widening its lead. And the authors list 9 billionaires who live in Washington State.

 

[Notmuchlonger]

I prefer it to stay concentrated. That way when I move out of the Republic of California. I can move to a place with a cheaper cost of living,less taxes and less people.

 

[bbbamI]

...and I thought all of the millionaires were in TX.

 

[NotReady4Purple]

Considering real estate values, $1M in assets is really not very interesting.

Now, $1M in yearly income - that feels like what I used to think about when I heard the term millionaire. Money to burn.

(And I read the title of this and thought Nebraska? Warren Buffett and who else? Duh. Is NE a common acronym for Northeast?)

 

[sarahsays]

Considering real estate values, $1M in assets is really not very interesting.

Actually, the article only counted those with $1M in investable, liquid assets. So home values didn't count.

 

[W2R]

Actually, the article only counted those with $1M in investable, liquid assets. So home values didn't count.

I was surprised at how low the percentages of millionaires was, only 7.12% even in 1st place New Jersey. I wonder what the percentage is in poorer states like Louisiana or Mississippi.

On the ER forum it is easy to forget that 2-3 million in investable, liquid assets is not actually the norm.

 

[Milton]

I was surprised at how low the percentages of millionaires was, only 7.12% even in 1st place New Jersey. I wonder what the percentage is in poorer states like Louisiana or Mississippi.

Here you go: Percentages of Millionaire Households by State | Personal Finance Hacks. Louisiana is reportedly in 44th place (at 4.24%) and Mississippi is dead last (3.85%).

 

[W2R]

Here you go: Percentages of Millionaire Households by State | Personal Finance Hacks. Louisiana is reportedly in 44th place (at 4.24%) and Mississippi is dead last (3.85%).

Thanks!! I had looked, but didn't find it. Wow, those values are really low in comparison.

Most of the top states look like great places to get a high paying job, which would explain why they have so many millionaires. Some, like Hawaii, are places where millionaires might choose to live after FIRE. I must admit that I am puzzled that Michigan is #14, since it has the reputation of being a pretty depressed area other than the auto industry. Maybe that one industry is enough, or maybe my understanding of Michigan's economy is lacking.

 

[haha]

Thanks!! I had looked, but didn't find it. Wow, those values are really low in comparison.

Most of the top states look like great places to get a high paying job, which would explain why they have so many millionaires. Some, like Hawaii, are places where millionaires might choose to live after FIRE. I must admit that I am puzzled that Michigan is #14, since it has the reputation of being a pretty depressed area other than the auto industry. Maybe that one industry is enough, or maybe my understanding of Michigan's economy is lacking.

Phoenix defines a millionaire household as one with $1 million or more in investable or liquid assets. So I guess an apartment building, a rental house, farmland- would be counted.

These numbers look quite high to me, for all the states. I don't mean that the article is wrong, only that the % is very respectable. Remember, many if not most people have most of their economic support tied to pensions, health care benefits, Social Security payment streams, etc. If these were capitalized, this number would get a lot higher. Then add houses!

We on the board may be more average than we imagined.

Ha

 

[cute fuzzy bunny]

Hmm, so you live in a mobile home next to the highway and own a $2M building, you're in.

Live in a $2M home, you're out.

Makes sense.

 

[W2R]

It is kind of a stretch to consider a $2,000,000 building or farm as liquid or investable, especially right now due to the real estate problems. I understood it to mean your bank accounts plus your investment accounts, for example.

These numbers look quite high to me, for all the states. I don't mean that the article is wrong, only that the % is very respectable. Remember, many if not most people have most of their economic support tied to pensions, health care benefits, Social Security payment streams, etc. If these were capitalized, this number would get a lot higher. Then add houses!

We on the board may be more average than we imagined.

Ha

Well, don't forget that a million dollars isn't that much any more. Someone with $1,000,000 can send it to Vanguard, and then withdraw a whole $40,000 (less after taxes) for ER. Whoopee. At least until SS kicks in, ER boomers without pensions and with a passion for travel aren't going to be living it up to any great extent on $1,000,000.

 

[Moemg]

I'm wondering how they collect this data ?

 

[cute fuzzy bunny]

It is kind of a stretch to consider a $2,000,000 building or farm as liquid or investable, especially right now due to the real estate problems.

Money is money. Deciding that in one place it doesnt count while in another it does seems odd when trying to determine ones wealth. If I own a $2M home outright vs a $2M apartment building outright, I still have assets worth $2M. Pretty sure you couldnt sell an apartment building right now either.

I'm wondering how they collect this data ?

I can tell you what their hands smell like after they're done...

 

[HFWR]

On the ER forum it is easy to forget that 2-3 million in investable, liquid assets is not actually the norm.

I don't have any trouble remembering that...

 

[mb]

There may be more millionaires in the East, but let's face it: a million dollars isn't much any more.

According to Bernstein and Swan (All the Money in the World: How the Forbes 400 Make - and Spend - Their Fortunes, chapter 6), California has outpaced New York as the residence of choice for billionaires, and is steadily widening its lead. And the authors list 9 billionaires who live in Washington State.

As you mention a million isn't all that much any more but a billionaire can live any where he wants so the choice is pretty obvious IMHO

MB

 

[Milton]

It is kind of a stretch to consider a $2,000,000 building or farm as liquid or investable, especially right now due to the real estate problems.

Couldn't agree more.

 

[Milton]

Remember, many if not most people have most of their economic support tied to pensions, health care benefits, Social Security payment streams, etc.

I dunno how true this is any more ... company pensions are becoming increasingly rare. And of course Social Security is notoriously undercapitalized.

 

[bots2019]

It is kind of a stretch to consider a $2,000,000 building or farm as liquid or investable, especially right now due to the real estate problems.

Umm, have you seen the increases in farm rents the last few years I have family members who own midwest farm land, and the land prices are up about 50% in the last year... With crop prices so high right now you wouldn't have any trouble moving a farm.

 

[youbet]

It is kind of a stretch to consider a $2,000,000 building or farm as liquid or investable, especially right now due to the real estate problems. I understood it to mean your bank accounts plus your investment accounts, for example.
.

Don't forget that, by definition, that $2M building or farm is valued at market. That means it would sell for $2M today and is liquid. Maybe it would have sold for $3M a couple of years ago, but today it's worth $2M.

Even if the $2M was appraisal value, I think in most areas today, popping it on the market for 10% - 15% below a fresh, accurate appraisal would probably move it. Not that big an adjustment for purposes of this study.

 

[Milton]

Don't forget that, by definition, that $2M building or farm is valued at market. That means it would sell for $2M today and is liquid.

Valued by who? It's not like fungible assets like stocks or bonds, for which there actually is an active market and you can get up-to-the minute quotations from willing buyers.

That's one of the problems with real estate investments: most valuations are no more than rough guesstimates of what a notional buyer might, perhaps, maybe, be willing to pay.

 

[youbet]

Valued by who? It's not like fungible assets like stocks or bonds, for which there actually is an active market and you can get up-to-the minute quotations from willing buyers.

That's one of the problems with real estate investments: most valuations are no more than rough guesstimates of what a notional buyer might, perhaps, maybe, be willing to pay.

I'm sure there are some areas where there are few sales and finding comparables is difficult. But here in the Chicago suburbs, the markets have slowed but there is still plenty of activity to establish good estimates of market prices.

Evidence of this is the fact that the so-called experts can give estimates of how much housing values have dropped.

For a study like the one we're discussing, why would you need "up to the minute" market data? If your real estate investment has fallen 5% - 10% in the past few months and you didn't pick up on that, would it matter?

I assume you are a renter?

 

[Milton]

No, we own our own house, mortgage-free.

The agent who helped us buy it several years back has recently advised us that it's worth $X. That seems plausible, given what other similarly-sized properties have recently sold for. But I don't factor that notional value into our net worth.

I do agree that valuing houses is generally easier than commercial or rural properties.

 

[RunningBum]

(And I read the title of this and thought Nebraska? Warren Buffett and who else? Duh. Is NE a common acronym for Northeast?)

Every time I see someone refer to NE I think of Nebraska, since I grew up there.

Omaha actually has 3 in the top 400 richest in American--Buffett, Ricketts (Ameritrade), and Walter Scott (took over Kiewet construction).

As you mention a million isn't all that much any more but a billionaire can live any where he wants so the choice is pretty obvious IMHO

And that looks like California to me, though it'd be nice if they showed numbers instead of a graph.
Interactive Map: Hometowns Of The Rich 400 - Forbes.com