$1 million a Long Shot in US?

[Beryl]

AP-CNBC Poll: $1 million a long shot in US - Nation Wires - MiamiHerald.com

The UK sees it as even more of a long shot.

They don't really define what is meant by "millionaire" -- cash, assets, net assets, etc. We've debated that a lot here. All I know is that I don't have a million dollars in cash and I don't consider myself a millionaire even if I do have over a million in net assets. Moreover becoming a millionaire is a long shot for me now that I've retired.

 

[unclemick]

It's taking that 'pay cut' to only a $mil. courtesy Mr Market the last two decades that sucks. Up is nice - down makes Mr. B's 'stay the course' a tad gritty.

heh heh heh - I read the article - not word about DCA relatively small amounts of money over a long period of time aka 30 yrs or so. I think ten yrs is referenced as a time frame. DUH?

 

[Johnphx]

What I find more remarkable is that 21% of Americans think they will be millionaires when only 5% of Americans ARE millionaires. Clearly we are going to need a good bout of inflation to make that happen.

 

[RHLnFLA]

And most people think they are good drivers!!

 

[traineeinvestor]

My heavily depreciated HK$0.02 worth is that the poll is unduely pesimistic:

1. as Beryl pointed out, it doesn't define what a US/AU/UK million is - if you add in the value of home equity, pensions and health benefits (all of which are often erroneously excluded when assesing net worth), a lot more people are in fact "millionaires";

2. the poll was taken in what I hope are the depths of an economic crisis;

3. given that we have [meaningful] [insert adjective of choice] inflation, getting to be a millionaire is getting easier every day.

 

[SteveR]

One noteworthy comment about Australia is that they have virtually zero "illegals" and immigration into the country requires a trade or means of making a living...it also requires you speak or learn English...quickly. My SIL and family live there. Their taxes are higher than ours but you gotta love their immigration laws. It is easier to have higher employment when most of your population has a trade or other qualification to work.

 

[Bikerdude]

One noteworthy comment about Australia is that they have virtually zero "illegals" and immigration into the country requires a trade or means of making a living...it also requires you speak or learn English...quickly. My SIL and family live there. Their taxes are higher than ours but you gotta love their immigration laws. It is easier to have higher employment when most of your population has a trade or other qualification to work.

Probably easier to do when you don't border a 3rd world country.

 

[Beryl]

Probably easier to do when you don't border a 3rd world country.

Sounds like a comment from a Canadian.

 

[bizlady]

Just for kicks, I looked up millionaire in the dictionary this morning.
mil·lion·aire

 /ˌmɪl

yəˈnɛər/ Show Spelled[mil-yuh-nair] noun
1. a person whose wealth amounts to a million or more in some unit of currency, as dollars.
2. any very rich person.

Not so sure I agree with definition #2--I guess it is a matter of perspective.....

 

[rescueme]

What I find more remarkable is that 21% of Americans think they will be millionaires when only 5% of Americans ARE millionaires. Clearly we are going to need a good bout of inflation to make that happen.

True, and that's what happened to many of us on this board who have at least $1M USD in investable assets.

If you look at the same amount of $1M USD back in the days of the series "The Millionaire" which ran to 1960, an equivalent amount today would be $7,653,547.30, using the inflation calculator on http://www.usinflationcalculator.com/ ,with an accumulated inflation rate of 2188.3%.

And remember, that $1M USD "gift" on that TV series was tax free - something that most folks (including me) still have to pay on their investable assets today.

$1M USD in investable assets? It's a target, but means little in making a significant change to your lifestyle, IMHO.

 

[gerntz]

What I find more remarkable is that 21% of Americans think they will be millionaires when only 5% of Americans ARE millionaires. Clearly we are going to need a good bout of inflation to make that happen.

15-16M Americans (5%) are millionaires? I thought the number was 1/2 or less of that.

 

[rescueme]

15-16M Americans (5%) are millionaires? I thought the number was 1/2 or less of that.

According to Wikipedia:

"A quarterly report prepared by the Economist Intelligence Unit on behalf of Barclays Wealth in 2007 estimated that there were 16,600,000 dollar millionaires in the USA."

Ref: Millionaire - Wikipedia, the free encyclopedia

While I'll agree the data is four years old, I'm sure there have been more than a few +/- over that time, to today's actual numbers...

Also, don't confuse $1M USD in investable assets with the current tax discussions of those earning in excess of $1M USD per year. There is a difference....

 

[FUEGO]

My guess is that roughly 21% of Americans have middle class jobs and contribute some significant amount to their 401k and know that working and contributing to a 401k will eventually allow them to accumulate some wealth. That plus owning a house and paying down a mortgage over their working career.

I think we here on the board develop an "us vs them" mentality whereby we think that if you aren't saving 20% or more of your income and striving for ER then you aren't saving at all. The reality is that there are plenty of responsible people that contribute less than 20% to a 401k, and spend most of what is left in their paycheck, but will still be millionaires if they work to a typical 60-65.

 

[rescueme]

I think we here on the board develop an "us vs them" mentality whereby we think that if you aren't saving 20% or more of your income and striving for ER then you aren't saving at all. The reality is that there are plenty of responsible people that contribute less than 20% to a 401k, and spend most of what is left in their paycheck, but will still be millionaires if they work to a typical 60-65.

I would hope we on this board don't think about it as an us vs. them manner.

That being said, I agree with you on your comment. Assuming one starts to save/invest in their 20's, there is no reason for them not to accumulate such an amount (assuming they are responsible in the other areas of their life and just sacrifice the future for current wants).

Just remember, that $1M USD today is not as important as it was in the past, and $1M USD in the future will be less so.

The new normal goal? Be a multi-millionaire...

 

[Texas Proud]

According to Wikipedia:

"A quarterly report prepared by the Economist Intelligence Unit on behalf of Barclays Wealth in 2007 estimated that there were 16,600,000 dollar millionaires in the USA."

Ref: Millionaire - Wikipedia, the free encyclopedia

While I'll agree the data is four years old, I'm sure there have been more than a few +/- over that time, to today's actual numbers...

Also, don't confuse $1M USD in investable assets with the current tax discussions of those earning in excess of $1M USD per year. There is a difference....

Not sure what measure is being used, but the article says it is a lot less...

"In reality, the United States leads the world in millionaires, more than 5.2 million of them in 2010, or nearly one in every 20 households, according to The Boston Consulting Group's latest annual global wealth report. Great Britain had 570,000 millionaires, or about one in every 45 households. Australia had 133,000 or about one in every 60 households, but that's an increase of 35,000 over the previous year."

​

 

[FUEGO]

I would hope we on this board don't think about it as an us vs. them manner.

Maybe us vs them was a poor way to phrase it. More like we seem to view saving as a binary function - ie you are either a major saver or a spendthrift. In reality there are lots of folks that fall somewhere on the continuum between major saver and spendthrift and will still be able to attain the rank of "millionaire" (however defined) someday.

 

[teejayevans]

Not sure what measure is being used, but the article says it is a lot less...

"In reality, the United States leads the world in millionaires, more than 5.2 million of them in 2010, or nearly one in every 20 households, according to The Boston Consulting Group's latest annual global wealth report. Great Britain had 570,000 millionaires, or about one in every 45 households. Australia had 133,000 or about one in every 60 households, but that's an increase of 35,000 over the previous year."

​

If they include real estate ( including primary residence), I can see both numbers being correct.
I'm sure there is a lot of people worth 1-2 million in 2007 that aren't now.
TJ

 

[W2R]

If they include real estate ( including primary residence), I can see both numbers being correct.
I'm sure there is a lot of people worth 1-2 million in 2007 that aren't now.
TJ

If I had much of my portfolio tied up in a million dollar (or more) home, I think I'd be about ready to jump off a cliff. The housing bust is depressing enough for those of us with houses in the under-$200K range, and who knew this housing slump would happen? Not me, anyway, not in a million years (though hindsight is great, as always). Believe me, I truly, truly feel for those who are in that situation right now and hope the market will recover soon.

 

[SteveR]

If I had much of my portfolio tied up in a million dollar (or more) home, I think I'd be about ready to jump off a cliff. The housing bust is depressing enough for those of us with houses in the under-$200K range, and who knew this housing slump would happen? Not me, anyway, not in a million years (though hindsight is great, as always). Believe me, I truly, truly feel for those who are in that situation right now and hope the market will recover soon.

Agreed.
Over the past 30+ years I have bought and sold several personal residences. I lost by rear on a few due to economic downturns and the need to move for the Corp. (remember Texas in 1988?) Lost a house to a divorce with virtually nothing out of it so I started over again at 42. Built equity; traded homes and "invested" in bigger nicer homes. I still remember the adage....buy the most house you can afford....I did that many times. Now the country is in the real estate crapper and $ trillions has been lost in equity. Fortunately, over the years I was able to cash out my equity and roll it right back into a different house which lowered my loan amount step by step. I never counted my home in my net worth except when required by loan applications etc. But, our next house is planned to carry no mortgage since we will downsize and use our accumulated equity (assuming there is any left then) to buy the house outright. It has been in the "plan" for the 15-20 years I have been planning my FIRE. Only now it may take longer than originally planned.

 

[rescueme]

If I had much of my portfolio tied up in a million dollar (or more) home, I think I'd be about ready to jump off a cliff.

How about these folks?

Hollywood Los Angeles CA Homes for Sale & Hollywood Real Estate - Zillow

 

[W2R]

How about these folks?

There are lots of people in that category in California, I agree, and there are plenty of cliffs around Hollywood as well. Even here, where the cost of housing is relatively low, I know a few with multimillion dollar homes that are preventing them from proceeding with their plans for downsizing, moving, and so on. This geographically widespread, long term housing slump is not comparable to prior localized downturns IMO, and the misery it is causing is really rotten. Breaks my heart.

 

[redduck]

O.K, I checked out the link provided by rescueme. Apparently, our house isn't for sale.

 

[PaddyMac]

How about these folks?

Hollywood Los Angeles CA Homes for Sale & Hollywood Real Estate - Zillow

That's close to where we escaped from in 2008!

The new buyers have a property tax bill of $14,000 a year, and have lost over $200K in value, according to Zillow... <not sure what Smilie to use for that one...>

 

[Beryl]

I still remember the adage....buy the most house you can afford..

When I purchased my current home in '07, I followed it but not in the way my realtor expected. On paper, I could afford more but not according to my FIRE plan.

It does break my heart when I see so many people either losing their homes, being underwater and walking away from their homes, or just having no equity for a retirement cushion.

 

[harley]

The way I look at it is we made a ton of money on our previous three homes, and are currently in a home that's valued at about $500K less than what we built it for, so we're pretty much back to even. Luckily we love where we are and don't plan on going anywhere for quite a while. I suspect if we stay for another 10 years the market might recover about half of the current loss, which would make a sale a little less painful. If this was money I depended on for my retirement I'd be wailing and gnashing my teeth. But I never counted my home as a retirement asset, although if we ever do move we'll downsize significantly and add the remainder to the retirement funds. In the meantime, at least we see our family and friends pretty often. Everybody loves to visit you when you live at the beach.