Friday, March 12
Posted: 11 a.m. EDT
According to the latest research by Chicago consulting firm Spectrem Group, the population of U.S. millionaires grew 16 percent in 2009, to 7.8 million. The number of households worth $5 million increased 17 percent, to 980,000.
This is still short of the all-time high of 9.2 million millionaires in 2007, which was followed by a decline of 27 percent in 2008 during the worst of the economic downturn. Spectrem defines millionaires as those with a net worth of $1 million or more, excluding personal residence.
So what's behind the numbers? Obviously, the real estate market is not fueling the increases, and the job market is slogging along with 10 percent unemployment. But the Dow Jones Industrial Average has soared more than 60 percent from a low of 6,547 last March, according to the Associated Press.
Tom Wynn, a director at Spectrem, says the rise in the wealthy population is attributable mostly to the gains in the market. "Millionaires generally have 60 percent of their wealth in investable assets, and an additional 10 percent in retirement accounts, which is usually in the market. They only have about 15 percent of their wealth invested in a principal residence."
Compare that to what Wynn calls "the mass affluent" -- those with $100,000 to $1 million in wealth -- who have a "considerably smaller amount" invested in the market, and a larger percentage invested in their primary residence, he says.
Coupled with the rise in wealth is a slight increase in confidence among the rich. Spectrem announced in February that its index of investor confidence rose three points, returning to what it calls "neutral territory." That means investors are neither bearish (as they have been the past few months) nor bullish, but are willing to consider investing in the market and are feeling somewhat more comfortable with the economy.
When will you become a millionaire?
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