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Dollar Millionaire Households Accumulate
The number of US households with more than one million dollars in net worth (excluding primary residence) has risen by around fifty percent so far this century, according to recent figures from TNS Financial Services. The total of 8.9 million such households is up for the third year running.
Based on the latest Affluent Market Research Program (AMRP), TNS' annual survey of 'wealthy' US households, the number of millionaires as of May 2005 increased 8% over 2004.
Number of US Millionaire Households (figures in millions)
| | | 2005 | 8.9 | | 2004 | 8.2 | | 2003 | 6.2 | | 2002 | 5.5 | | 2001 | 6.0 | | |
Unlike in 2004, stock market growth is not the main driver - nor is real estate investment. The Standard & Poors 500 and NASDAQ posted no significant gains during the time period measured, and the Dow Jones Industrial Average posted only a 4% gain. In fact, while ownership of stocks and bonds is up (72% of millionaires own individually held stocks and bonds, up from 63% in 2003), the average balance invested is down. Ownership of mutual funds is flat and the average balance also fell. Ownership in investment real estate, including second or vacation homes, is down from 50% of 'millionaire' households in 2004 to 44% in 2005.
Study manager Jeanette Luhr says the rise represents long-term wealth accumulation, rather than new wealth creation, and is largely due to 'measured planning and active reinvestment'. 'These households did not become rich overnight... they have benefited from economic changes in the past several years'. The average level of debt has actually decreased 8%, from $179,000 last year to $165,000 this.
The number of emerging affluent households, those with $100K-$500K net worth, excluding primary residence, is also up, from 23.9m in 2004 to 24.5m in 2005, and confidence seems to be increasing with over three-quarters of high net worth households feeling they will be financially prepared for retirement.
AMRP is based on a representative national sample of over 1,800 households with a net worth of $500,000 or more, excluding primary residence. The mail-based survey includes additional interviews with households with $1 million or more in investable assets; Hispanics, African Americans and Asians; and the emerging affluent. TNS is online at www.tns-global.com.
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