New reports show that the number of millionaires is on the rise — which makes perfect sense, given the rise of inflation — but how rare is it to become a millionaire today?
First, let’s take a step back and examine just how far the term “millionaire” has fallen. Steven Fentiman invented the word in 1719, but Lord Byron was the first Englishman to ever use it in his writing, followed quickly by Benjamin Disraeli. It’s safe to say, then, that the word was in use (but not popular) in the early 1850s. In this article I want to distinguish “millionaire” (someone who owns up to $1m in assets) with “original millionaire” (someone who, as you’ll see, owns much, much more — which is more in line with the original usage of the term).
So, let’s take a step into a time machine and imagine how much money you would need in order to be crowned a millionaire the first time you heard the word spoken out loud.
Roughly $30 million.
How about in 1900?
Roughly $27.5 million.
And how about 1950?
Roughly $10 million.
So, if you’re ever reading Benjamin Disraeli’s Vivian Grey and you see the term “millionaire,” just know that he isn’t referring to your run-of-the-mill “millionaire next door” type with $1m in assets. He’s talking about a multimillionaire worth at least $30m. With that said, if you’re ever reading Stanley and Danko’s Millionaire Next Door, just know that, since most of their data was accumulated in the late ’80s and early ’90s, the “millionaires” they’re referring to have $3-4m in today’s dollars.
So, obviously, millionaires are not as rare as they used to be. Globally, of all of the millionaires alive today, according to Time Money, 90% fall under the $1-5m range, which means that the term “millionaire,” in its original ~1850 usage, only applies to a small fraction of the people who consider themselves millionaires in 2017.
All in all, it’s a fuckton of money.
Let’s go back to the original question: How rare is it to become a millionaire?
The answer is: Not as rare as you think. According to DQYDJ, almost 12% of American households have a net worth in the millions. However, wealth isn’t necessarily divisible by everyone in the residence. For instance, I’m not going to get a piece of my dad’s 401k; he needs that money so he can stay alive for the next ~30 years. While technically that means my parent’s modest home in suburbia is full of millionaires, it’s really just my dad — and that’s counting money that he can’t even access without incurring huge fees and paying taxes.
So, if you’re an individual with at least a $1m net worth, you’re better off than you thought, relative to the rest of the world (and even to the rest of America). I’ll tell you how much in just a second.
Researching for this article, I found a funny commonality between all of the other mainstream media’s reports. In every article titled, “Record Number of Americans Now Millionaires,” these photos headed the writing:
Look at all those millionaires living the good life. It’s funny, with all we now know about personal finance — with virtually every single personal finance blogger living a modest lifestyle well below their means — the MSM still wants to push this narrative that millionaires live like this.
Join me in the Prayer of Personal Finance: Millionaires are people just like me, living right next door to me, making the same amount of money as me, with the same opportunities as me, wearing the same clothes as me, going on just as many (or even fewer) vacations. They became millionaires because they’re better at managing their money.
And they’re not young, like the people in these photos. According to the Dayton Daily News, “Approximately 70 percent of the wealth and affluent market is comprised of Americans age 52 or older who have at least $100,000 in investable assets.”
TL;DR Just plug in one million to the Global Rich List: