Rise of the middle-class millionaire

[omni550]

Interesting article about the "middle-class millionaire" (defined as net worth of $1 million to $10 million, which was earned not inherited).

http://www.marketwatch.com/news/story/rise-middle-class-millionaire-reshaping-us/story.aspx?guid=%7B6CF2AF9B%2D7A4C%2D487E%2D8AD1%2 D8B49A6A87104%7D&dist=TNMostRead

Although many on this board fit their profile, I don't think many of their findings fit us.

omni

(Sorry about the long web address. Maybe someone can explain how to make those nice short ones.)

[dex]

do you want to check that link - it didn't work for me.

A million isn't what it used to be and may never be again.

[W2R]

Try this:

Rise of the 'middle-class millionaire' is reshaping U.S. culture - MarketWatch

[Alan]

certainly is very different from myself. Happiness, leisure time etc is not mentioned.

[megacorp-firee]

Agreed... interesting but not relevant to many on this board.

[SteveR]

Middle class millionaire?

I know I have met more than my fair share of no-class millioinaires.

So do the low class millionaires clean the houses of the middle class ones? Are they allowed to socialize with the upper class millionaires?

So do all the middle class millionaires pay the majority of the taxes for the other groups?

I guess we would fall in the middle class group. I doubt we will ever see the upper middle class in this class not do I care to. I would have to go back to w*rk and bust my tail for another 10 years to graduate to that class...no thank you. I am doing fine with what I have and my goal is to carefully dole it out until I am dead; not make another million or two on top of what my investiments will bring in over time.

[chinaco]

Well you know what they say... a million isn't what it used to be. These folks are the upper middle class in terms of assets. But many do not lead upper-middle class lifestyles.

Being in the lower end of the group is good... but being at the top would be better.

[OAG]

Seems like they work too hard to get and stay there. Sure does not fit my lifestyle, well maybe the work ethic very early on, but I learned better as time went on. I guess the writers had an assignment to complete but this does not seem to be the reality I have seen.

[donheff]

They sound like a bunch of "d*** heads." How did we get into this group?

[Independent]

Quote:

Originally Posted by omni550 Interesting article about the "middle-class millionaire" (defined as net worth of $1 million to $10 million, which was earned not inherited). http://www.marketwatch.com/news/story/rise-middle-class-millionaire-reshaping-us/story.aspx?guid=%7B6CF2AF9B%2D7A4C%2D487E%2D8AD1%2 D8B49A6A87104%7D&dist=TNMostRead Although many on this board fit their profile, I don't think many of their findings fit us. omni (Sorry about the long web address. Maybe someone can explain how to make those nice short ones.)

Right. This NYT piece suggests that the authors aren't exactly unbiased observers. http://www.nytimes.com/2008/02/15/books/15book.html

An earlier book "The Millionaire Next Door" claimed that high incomes are good, but a high net worth usually also requires LBYM. A somewhat different message.

[Nords]

Quote:

Originally Posted by Independent Right. This NYT piece suggests that the authors aren't exactly unbiased observers. http://www.nytimes.com/2008/02/15/books/15book.html An earlier book "The Millionaire Next Door" claimed that high incomes are good, but a high net worth usually also requires LBYM. A somewhat different message.

MND authors Stanley & Danko also wrote books about and consulted on marketing to the wealthy, so I'm willing to give these guys a pass on that count.

But the NYT review makes it sound like they're brash, overconfident, and shallow, even maybe not quite actually the authors. In fact their strategies are sounding a lot like the business climate of the late 1990s.

The book generated a lot of buzz and I'd added it to my reading list. But just like that book about the four-hour workweek, I'm taking it off the list. Thanks for giving me back that part of my life, Ind!

[aaronc879]

I know i'm in the minority on this forum but growing up poor in the midwest I don't believe there's any such thing as a middle-class millionaire. Once you reach millionaire status, even in this day, you are now in the upper class. People in SoCal or NY city may not agree but I think that for the rest of the country that is the case.

[W2R]

Quote:

Originally Posted by aaronc879 I know i'm in the minority on this forum but growing up poor in the midwest I don't believe there's any such thing as a middle-class millionaire. Once you reach millionaire status, even in this day, you are now in the upper class. People in SoCal or NY city may not agree but I think that for the rest of the country that is the case.

They define "millionaire" as having a net worth of a million. Suppose you have a million,

• house: $150K
• car: $25K
• investments: $825K

At 4% SWR that would give you just $33,000/year income, and that is before taxes. After taxes you still have to pay health insurance.

Still seem upper class? I'm not saying it doesn't. It just seems like a lot less when you break it down.

[Notmuchlonger]

If you have no debt that amount of money puts you in a pretty high percentile wealth wise in the US. I don't recall the exact amount but I want to say under 10%.

[aaronc879]

Quote:

Originally Posted by Want2retire They define "millionaire" as having a net worth of a million. Suppose you have a million, house: $150K car: $25K investments: $825K At 4% SWR that would give you just $33,000/year income, and that is before taxes. After taxes you still have to pay health insurance. Still seem upper class? I'm not saying it doesn't. It just seems like a lot less when you break it down.

You make a good point breaking it down like that. I'm one of those people that doesn't count home equity or any personal belongings(car) as part of my net worth. So to me, a millionaire means a million+ of liquid investments some of which may be already taxed. In that case you'd be looking at $40,000+/year income before taxes which is more than enough for most people with a paid off mortgage and no dependants in the middle of the country.

[chinaco]

I do not count our home equity in our net worth. Mainly because I do not intend to spend the asset in the future. It will likely be an asset in the estate.

[Independent]

Quote:

Originally Posted by Notmuchlonger If you have no debt that amount of money puts you in a pretty high percentile wealth wise in the US. I don't recall the exact amount but I want to say under 10%.

You are correct. This report uses 2004 data. http://www.levy.org/pubs/wp_502.pdf
Looking at Table 4 on page 15, it's pretty easy to believe that less than 10% of households have $1 million in net worth.

Of course, for working people, wealth is correlated with age. So you'll find a higher percent for people around age 60.

[Midpack]

Quote:

Originally Posted by aaronc879 You make a good point breaking it down like that. I'm one of those people that doesn't count home equity or any personal belongings(car) as part of my net worth. So to me, a millionaire means a million+ of liquid investments some of which may be already taxed. In that case you'd be looking at $40,000+/year income before taxes which is more than enough for most people with a paid off mortgage and no dependants in the middle of the country.

A "Millionaire" sounds very well to do or better. $40K/yr sounds barely comfortable to me (like W2R is highlighting). And the Millionaire Next Door is one of my favorite books FWIW...