Being a millionaire is kind of middle class now

Axios

11 hours ago

Forget top hats and monocles, millionaires look positively middle class now.
Why it matters: The number of "everyday" millionaires — those with wealth between $1 million and $5 million — is soaring. But many of these folks don't necessarily feel rich.
By the numbers: There were nearly 52 million "everyday" millionaires in the world last year, per a recent report from UBS. That's four times the number in 2000.
Even accounting for inflation, the number of everyday millionaires in 2024 was 2.5 times what it was in 2000. The wealth manager does not break down how many of these folks live in the U.S. But America has, by far, more millionaires than any other country in the world.
New American millionaires were minted at a rate of about 1,000 a day last year. There are nearly 24 million millionaires in the U.S., 40% of the global total, and about four times the number than runner-up China.
"Millionaires are no longer Monopoly caricatures," says Paul Donovan, chief economist at UBS Global Wealth Management. "It's shifted to encompass a very large portion of the population."
State of play: Driving this growth in the U.S. are home prices, which have skyrocketed in recent years, and the rapidly aging population, he says.
More and more Boomers are sitting free and clear on homes that have seen their values rise. The share of Americans who own their homes mortgage-free sits at a record high of 40%, and over half of these folks have reached retirement age.
This is also a population that has hugely benefited from federal tax policies, like the mortgage interest deduction, and the ability to put money into 401(k)s tax free.
Between the lines: Boomers are the first generation to rely on private savings for retirement, mostly through 401(k)s.
These plans don't generate steady and predictable income like a pension would. A pension doesn't show in your wealth tally the way a 401(k) does.
So even though 401(k)s might make you technically wealthy, they do leave many feeling perpetually insecure, Axios has reported.
Reality check: No matter how these folks feel, they are doing very well.
36.8 million Americans lived in poverty in 2023, according to census data. Worldwide, a staggering 3.5 billion people are considered poor.
Zoom out: Many people have accumulated their seven-figure wealth without quite realizing it. After Axios put out a call on social media and on a podcast, a few folks said they only just learned they were worth more than $1 million.
Zoom in: Some of these folks said they are just getting by. They're house poor, living in pricey homes with little left over after paying the mortgage.
"We don't take expensive vacations ever. I drive a 2016 Honda Odyssey with 175,000 miles on it," says Alisha Ard, a stay-at-home mom of four who lives in Ventura County, California, where the median home costs now costs more than $800,000.
Ard and her husband have a $1 million mortgage on a $2 million house. "I know we're technically 'millionaires' with our home equity but it isn't really helpful for monthly expenses," she says.
Feel rich? Most said no:"My mind was blown when I discovered that I am in fact one of these people," says Glen Czaplewski, who lives with his wife and four-year-old in a townhouse in Denver and works in the insurance industry. He says they keep to a budget and "live a nice life."
It's still nothing extraordinary. "It's honestly hard to describe how incredibly pedestrian and normal our lives are," he says.
"Somehow we have managed to build a net worth that puts us into the top 5-8%," one self-identified Boomer from Utah tells Axios in an email, asking for anonymity to discuss his personal finances. He says he and his wife, who are both teachers, have a net worth of about $4 million.
Does he feel rich? No. Selling the house would be a "wash," he points out, as they would have to pay for some kind of shelter, likely at a high price.
Careful long-term investments and frugality landed them here, along with living in a town that's seen real estate prices shoot up. "We do feel secure," he concedes.