'Middle-class millionaires' (net worth $1 million to $10 million) now 10% of the U.S. population

[Cruzan]

Those with a net worth of between $1 million and $10 million -- that they have earned rather than inherited -- are being dubbed "middle-class millionaires," a group that has grown on the heels of the economic boom over the past couple decades.

Middle-class millionaires now account for 10% of the U.S. population, according Russ Alan Prince and Lewis Schiff, who coined the term for research purposes and a new book by that name. They studied almost 4,000 households to better understand attitudes, values and purchasing patterns.

Their findings include:

• 7.6% of American households, or 8.4 million households are middle-class millionaires
  
  
• The average middle-class millionaire works 70 hours per week
  
  
• Middle-class millionaires are five times more likely than the average worker to say they are always available for work
  
  
• 89% believes that anyone can attain wealth through hard work
  
  
• 62% believes that networking, or knowing many people, is the key to financial success
  
  
• Nine out of 10 middle-class millionaires say they made a bad career or business move, but almost three-fourths say that was crucial to their business success
  
  
• They are five times more likely than the average middle-class person to continue on in the same business course in spite an earlier failure
  
  
• 65% of middle-class millionaires characterize their approach to negotiating as "doing whatever you need to do to win"
  
  
• They say they need a net worth of $24 million to feel wealthy, and $13.4 million to be considered rich.

Prince and Schiff also found that almost half of middle-class millionaires believe a child's academic achievements reflect one's success as a parent. Seventy-five percent of this group chose their home because of its school system. And only 14% of them trust the government.

This separates middle-class millionaires from the middle class in general: Only 16% of middle-class households were ready to put their own reputation on the lines when it comes to their kids' academic record, according to Prince and Schiff. More than half of middle-class households chose their homes because it was close to work. And an almost equal amount believes the government has their back, Prince and Schiff say.

More

[Cant trust em]

1. I hate this story

I am so sick of financially well off people trying to pass themselves off as just average joes.

[FalconsRule]

4. Seems

like they work like average Joes...they just have more to show for it.

[bpeale]

10. stories like this make it seem like us middle class folks

are lieing about something instead of so poor we are one paycheck away from homelessness or starvation.

if you're worth $1 million, then you are not middle class. period.

[FalconsRule]

11. Not True

There are people who live in homes worth that who live paycheck to paycheck. Especially in So Calif.

[bpeale]

13. then they are living way beyond their means & that's their fault

[FalconsRule]

17. Gee, my parents who bought

their 2,600 sq foot house in Orange County in 1971 for $32,000 which is now worth $1.1M, are living above their means? My dad and mom survive on Social Security and what I can send them, but you think they live above their means. Thanks. You are clueless.

[YankmeCrankme]

19. Actually, you're clueless

If true, your parents have $1,000,000 worth of equity in their house. If they sold it they'd have a ton of money, could buy a much, much cheaper home in a retirement area and probably have over $500,000 dollars in the bank, earning interest,to live on. Social Security would be petty cash for them.

[FalconsRule]

20. My parents have no desire

to leave their house. They have lived there for 37 years. Nice try.

[YankmeCrankme]

29. That's their choice, though.

If they are struggling even though they have a million dollars in equity, how can I feel sympathy? It's their choice to struggle.

[FalconsRule]

36. Right.

Bye!

[DFW]

40. Besides that, how much interest can you earn on $500,000?

Last I saw, it was around 3%, or about $15,000, and that is before taxes.
Not exactly enough for a life of luxury.

[Cant trust em]

22. Isn't there a financial phrase to deal with this?

Equity rich and cash poor or something like that? Your parents story is not uncommon.

[FalconsRule]

23. I know...

Trying to convince them to do what a previous poster suggested, but they won't.

[Cant trust em]

24. Getting people to move is difficult.

"Mom and Dad, why don't you just pick up and leave the only community you've known for the last 37 years."

Obviously it's the right choice in a cut and dry point of view. My grandfather had to make that decision a few years ago.

How old are your parents?

[FalconsRule]

25. They are

both 69

[nadinbrzezinski]

49. We've tried to talk my parents into that

and gave up... 81 and 78, but unlike your parents they can actually afford to live where they live.

And yes, you are right, a lot of people are quite clueless


your folks are middle class

[slampoet]

41. That's not Middle class that A RICH FOOL. A billionaire that spends all his money on Hookers ......

isn't poor either.


The people who own houses that are seven figures and can't afford them, HAVE AN ADDICTION TO MATERIAL THINGS.


They are rich and foolish and maybe even too stupid to deserve the money they have.

[question everything]

44. I think that if you were lucky enough to work for the same employer for the past

say, 20 or 30 years, and have contributed the maximum allowed to 401K you could have there $1 million by now. And if you are younger than 59.5 you don't touch this amount, you can fall into this group while still earning $50K - $80K a year.

[CRF450]

48. So does being a millionaire mean that you should buy a Mcmansion, a Lambo

or even a 40+ foot cruiser boat? If they want to live the life style of a regular joe, than why shouldn't they? You would want to just take the money that they worked so hard for, away?

[underpants]

2. $50,000 is the median income

half of the people make more
half make less

Net Worth is nice except when say you house is in "negative equity"-->CNN reporting today that 10% of US homes are now in the negative

Still some interest stats. Thanks

[FalconsRule]

16. Self Delete

[DFW]

3. "If I were a rich man......"

I checked the old account. Nope, no $13.4 million. Oh well, can I get
honorary membership? I don't trust the government.............

[mihalevich]

6. I'm worth about $900

[DFW]

39. The way things are going....

That'll be about 15 euros before the year is out.

At least you can belong to the "don't trust the government" crowd
along with the rest of us. Last I heard, membership was free.

[pbca]

5. Of course in many cases

a big chunk of that "Million dollars" is in a house they can't sell and isn't really worth as much as they paid.

[samdogmom]

7. In some places--it's easy to be a millionaire!

California in particular! What does it cost to buy a very average home in metro areas of California? $1-million is a threshold price. These people still have real bills and aren't flush with cash. I agree a true "rich" person needs much more than $1 million to feel comfortable!

Please don't judge before you "walk the mile"!

The bar for middle class just needs to be raised a bit!

Thanks!

[Hekate]

8. Does that figure include those whose "wealth" is tied up in an old home in a high-rent area?

I joke to my husband that we now live in an executive mansion. It's a joke because it's the same small tract house it always was, only 25 years older and sitting in the middle of some godawful bubble of inflation based on our SoCal location.

Our income hasn't risen significantly -- if anything it's gone down a bit since Mr. H moved from consulting to teaching 18 years ago. Our neighbors aren't displaying excess wealth. (Oh wait, retired Wayne employs a gardener to keep his little front yard blooming as he rearranges it every year.)

But if you include our homes in our net worth, suddenly we are millionaires. On paper. With no way to spend the imaginary money unless we sell out and move to an unpleasant climate far away from all our friends and family.

My point is that a lot of people on both coasts probably fit that dubious profile.

Hekate

[Stinky The Clown]

12. Don't say that too loudly

I got flamed for saying something similar a year or so ago.

The value of real estate purchased long ago when it was a modest house bought in a pre-inflated, pre-speculative market makes many of us 'millionaires'. We've been in this house more than thirty years and paid what was both a reasonable price and what we could reasonably afford way back then. Now this house makes up a substantial part of our net worth. So does the business I started with **ZERO** money and nearly a year of sacrificing with no income and built over these last many years through hard work.

Today, literally, my primary vehicle, a 10 year old mid line car with more than 100K on the clock, is in the shop and I'm wondering whether to spend money to keep it going or by a used car to replace it.

But I'm worth a "million dollars" ...... feh ......

[samdogmom]

15. See..This is my point!

Unfortunately, we're too quick to judge based upon Home Value. That's not a fair assessment of real wealth! (Maybe if the home were sold and the money was in the bank, it would be a different story. But home value is mute!)

To be considered "rich" you should have actual cash assets!

Just my two cents!

[YankmeCrankme]

21. Actually, that's the point

You have decided the equity of a million dollars or more is better spent on living in an overpriced area which doesn't afford you any benefit to the value of your property so you have scaled back your life style to fit that.

Like you said, if you sold and moved to a much more affordable area you'd have a lot of disposable cash that you could be earning interest on. It's not imaginary money, you just choose not make use of it. Not disparaging you, it's your decision, just don't complain about the idea that you're actually worth a million or more because of your real estate investment.

[Hekate]

46. The incremental cost of living isn't so bad once you've paid off the ol' mortgage...

And that's the point.

Plus our lifestyle has always been to spend a bit less than we make, not more, so there's nothing to scale back on.

It's the younger generation I worry about.

Our son had to leave the state in order to buy his home -- and that, to me, is the saddest part -- and had to use a subprime lender, too. But he used good sense and bought a house he could easily afford to make payments on. Since he's unmarried he has room mates and that helps even more with the payments. He should be okay.

Our daughter wants to stay, but she and her husband are unlikely to ever be able to buy here. I'm trying to write this with my grandson on my lap, so I am glad they're here, but economically they'd be better off elsewhere.

And that's sad.

Hekate

[Uncle Joe]

9. If the dollar keeps dropping and hyperinflation takes off,

most everyone will be millionaires and we'll all qualify for food stamps. Those lagging behind and being only hundred thousandaires will be turned in to Soylent Green.

[Hannah Bell]

14. It's from Marketwatch.

Like Forbes & similar pubs, part of their job is to publicize how, if people just work hard & do "what they need to do," they can be "millionaires".

Feh.

[Vinnie From Indy]

18. One wonders how many of these Middle Class Millionaires Voted BUSH

The tragic joke will ultimately be played on them when America's economy begins to pick up speed going over the cliff. That is when the ultra-wealthy will reach out and scoop up all the kinda wealthy's assets at fire sale prices.

[SoCalDem]

26. 10% is in NO WAY, middle

:) Fun with Numbers 101

[daleo]

30. You're right, that puts them in the top decile

Which used to be called upper class.

[Igel]

35. Not necessarily.

Middle class is usually by income, secondarily by lifestyle, and only then by assets.

Take my parents. Low income. They count as "poor", living on IRA distributions and my ma's social security. Yet they have the money in the IRA, their savings (earning interest), and their house. They might well break the $1 million mark; both were steelworkers.

My aunt died recently. She had $2.5 in her own funds (she also was trustee for her dead husband's funds, left to his younger brother). She was a Veteran's Administration hospital secretary for >35 years. She just saved. At no point was she more than middle class, at best, and that was only because she and her husband both worked. But they saved.

My parents could have an upper class lifestyle for a few years, but their income wouldn't allow it, then they'd just be dependent on my ma's social security. My aunt could have been upper class for a year or two longer, and then just lived on her government pension.

Upper 10% assets doesn't equal upper 10% for income. Many of the latter spend more than they should; not a few are only in the top 10% income bracket briefly. (My parents were for one year, when my father got his lump-sum pension.)

[daleo]

42. There are many ways to analyze class position

Education is often used, as are income and net assets (wealth). It is true that there can be exceptions such as those you point out - the low paid PhD, the high income tradesman, the cash poor but asset rich senior.

Actually, in most cases a senior with assets in the million plus range could live a high income lifestyle for the remainder of their lives if they didn't care about passing wealth to their offspring, and if they based their decision making on average expectancy. Given that average lifespans only extend to about 75 for men and 80 for women (10 to 15 years after normal retirement age), cashing out a million dollars in assets would provide a tax free income stream of $75,000 to $100,000 per year. They would still receive their pension income on top of that. That is certainly in the upper income range, as defined by statistical considerations (e.g. top quartile or decile).

Naturally, most people want to preserve a good part of their wealth to pass on to their offspring, so they don't live it up. People also tend to worry (in a financial sense) that they will live a lot longer than they actually do. Plus, people tend to maintain the lifestyle they are used to, throughout the life cycle. A steelworker who got lucky with real estate and was prudent with his or her savings is unlikely to suddenly want to live on twice the income they did when they were young (sometimes they just don't have the health or energy for a lot of conspicuous consumption). But in principle they could.

The irony is that these prudent people often pass on their hard earned wealth to people who quickly go and blow it, but that's another story.

[annabanana]

27. So.. What's a million dollars worth in "real" money?

You know, yen or euros. . or whatever UAE uses. .

[walldude]

28. Oxymoron

Middle Class Millionaires. Gimme a fucking break, if you have a million dollars you are not middle class.

[Blue_Tires]

45. +1

i'm sick of seeing that meme get traction...

[KharmaTrain]

31. I Was Told "You Don't Join The "Club" Til You Reach 10 Million

There are many types of millionares in this country. As some have noted there are those whose value lies in their property. Others have it in trusts that make it difficult for them to touch much of the equity. There are those who've inherited, others who worked their asses off and earned it. And of course there's a big difference between $1 million on paper and $1 million in actual assets. In the dot com boom years I knew plenty of dot com "millionaires"...kids in their 20s who barely had $20 in their pocket, but on paper they were worth millions...of course that came to a crashing end.

$1,000,000, while a lot of money isn't what it used to be...In many ways it is a bench-mark of what my parents would have called the upper middle class. This was the place where, if you were a professional, you would have expected to end up...the Pleasant Valley Sunday scenario. The value was driven up by the rise in stocks and inflation...and now is falling back as those stocks and their property values fall.

I know some of these middle-class millionaires...they are friends of mine...and I've known several since our high school days. These folks worked their asses off in a variety of jobs...working 80 hour weeks and trying to balance family and sanity. These people were born middle class, live middle class and will always be middle class...no fancy house or cars, one nice vacation a year and a fun night out is still going to a bowling alley or a coffee shop. According to these people, you're not rich unless you have at least $10 million. As they say the grass is greener.

As always there's a contempt here for those who have money...as if its all evil. I remember having a lot of feeling that way as well...but over years I've learned its not the money, but the people who are evil. It's a culture of greed that puts net worth as such a barometer of one's station in life. It's also the measure of a person in how they use their money and the overall contributions the person makes to others lives. I doubt you'd consider a John Edwards the same type of millionaire as a Dick Chenney.

[tachyon]

32. I don't understand how a "household" can be "a millionaire"

How big is a household? If it includes just those living under one roof, I doubt the 10% figure. But anyway I wouldn't count anybody a real millionaire of any type unless he/she/they could come up with one million in green-dollar CASH on short notice...say 48 hours.

[A HERETIC I AM]

47. 3 days.

Or rather "Trade plus 3"

People that have much of their "liquid net worth" in investments for the most part, have the ability to liquidate and have the cash settle to their accounts 3 days after giving a "sell" order to their broker.

If you own Mutual funds, Stocks, Bonds, etc., and want to sell, settlement is "trade plus 3".

There are exceptions, but they are rare.

[BadgerLaw2010]

33. This headline is stupid. $1 mil + NET is not middle class anything.

[ileus]

34. BS....I know 3-7 millionaires of the 2000 or so peeps I know.

[El Pinko]

37. People with a net worth over 1 million are at the LEAST "Upper Middle Class" if not rich...

How can you possibly characterize a person in the TOP TEN PERCENT as being a part of the MIDDLE? It stands that the MIDDLE should be the people who are in the quartiles surrounding the MEDIAN.


I HATE when wealthy people try to pass themselves off as middle class and act as though they have any understanding of the struggles of regular people.

With that kind of fortune you could easily cash out, take your chips and retire in luxury in Costa Rica or Thailand.

Most of us are a paycheck or two away from the STREETS.

[Brewman_Jax]

38. A contradiction in terms.

"Middle-class" and "millionaires" don't belong next to each other in the same sentence.

[question everything]

43. I wonder how old their data are

Normally they are two or 3 years old.

It matters because, no doubt, many have seen net worth taken a precipitous drop since, say, last summer.

And many of these with net worth of $1 million probably are now down to, say, $750,000 or so.

[AP]

50. Is there possibly a tautology in this analysis --

People who are 1-10M'aires think differently, e.g., they pick a house because of the school district.

But a lot of these 1-10M'aires are probably in that category simply because of the value of their homes (and not because of they make significantly more than people in the middle class, and there might be little connection between being rich and those mindsets described in the article other than the mindset lead a person to buy a home in a neighborhood that benefitted from the huge housing bubble over the last few years more than houses in school districts with bad schools.

And if people who are 1-10M'aires work more hours, maybe it's because they need to work longer hours at jobs that pay enough money to pay mortgages to pay for those homes.

In other words, I think the key correlation in this study is between the value of the home and those other mindsets, and not "financial success" (or even annual income) and those mindsets.