This article was last updated on August 20
I posted the update below 12 years ago. President was just sworn in and America was in the middle of the great financial crisis. With the release of 2020 world wealth report, I thought it would be interesting to look at how the rich have got richer and how most of us middle class Americans have done in this time.
- The total number of millionaires in US equals to 18.6 million. The US has 40% of the globes millionaires, meaning there are 46.5 million millionaires. Nearly five times as much as 2008!
- There are 705 billionaires in the United States.
- The city with the biggest concentration of ultra-rich millionaires is New York with 8,865 UHNW.
- The United States’ millennial millionaires own an average of three properties with a real estate portfolio worth $1.4 million.
- About 44% of the millennial millionaires of the US are concentrated in California.
- 47% of the world’s wealth is controlled by the top 1% UHNW individuals.
Middle Class Income levels
According to a 2018 report from the Pew Research Center, 52% of American adults live in “middle class” households. The median income of that group was $78,442 in 2016. Pew defines the middle class as adults whose annual household income is two-thirds to double the national median. That’s after incomes have been adjusted for household size, since smaller households require less money to support the same lifestyle as larger ones.
About one-fifth of American households, 19%, are considered upper class, while 29% are lower class. The median income of upper class households was $187,872 in 2016. For lower income households, it was $25,624.
These numbers are in 2016 dollars and scaled to reflect a three-person household.
Pew looked at various household sizes. Here’s the income range you’d have to earn each year to be considered middle class, depending on the size of your family:
- Household of one: $26,093 to $78,281
- Household of two: $36,902 to $110,706
- Household of three: $45,195 to $135,586
- Household of four: $52,187 to $156,561
- Household of five: $58,347 to $175,041
2008 Wealth Report Update
The number of millionaires (high net worth individuals) in the world hit 10.1 million last year according to the 2008 World Wealth Report. A high net worth individual (HNWI) is someone with net assets of at least $1 million, not including their primary residence. It would be great to join this list someday, though with the way my investment portfolio has been hammered from falling equity markets, I still have a long way to go. Here are some interesting statistics from the report showing the trends and distributions of these high net worth individuals
The number of high-net-worth individuals grew by 6% to 10.1 million worldwide. This is also a slower pace than the 8.3% increase seen in 2006, due to weakening global economic conditions. The combined wealth of these individuals is now estimated at over $40 trillion, with the average HNWI wealth surpassing US$4 million for the first time
The number of ultra-high-net-worth individuals (people with net assets of at least $30 million, not including their primary residence) grew by 8.8% to more than 103,000. This group also saw a 14.7% jump in their combined wealth to $15 trillion.
North America remains home to the highest number of wealthy people, with 3.3 million high-net-worth individuals, but the wealthy populations in some emerging markets continue to grow at impressive rates. I wonder how long America will stay on top of the list, my guess is that by 2025, the US will be surpassed by China or India.
In 2007, India, China and Brazil saw the biggest increases in the number of wealthy people. India was the leader with an impressive 22.7% increase in the number of high-net-worth-individuals. China also saw a 20.3% jump in its population of high-net-worth individuals, while Brazil’s population of millionaires increased by 19.1%.
The projection is 7.7% for the annual growth in the number of high-net-worth individuals globally until 2012.
Given the data is based on 2007 figures, I imagine that the next report (for 2008 data) will show a much slower growth rate or even decline in the number of HNWI; due to the weak economic conditions experienced around the globe. In fact equity markets around the world are at 2006 levels which means a significant erosion of wealth for all, even in US dollar terms. The report authors acknowledged that any recovery was dependent on global markets regaining its footing quickly. “There’s a risk if we see continued weakness in global economies and dysfunction in global markets for an extended period,”.
However, with the average wealth of $4m for these HNWI, I don’t feel to sorry for them if they lose a million here and there. It is the people who earn less than $100,000 that will be hit the most in any downturn or recession. As wealth is redistributed from western (developed) economies to emerging economies around the world, the rich will get richer. It’s just that they are living in different places.