10% of US households could be millionaires by 2021 and other millionaire insights

The number of U.S. households with a net worth of $1 million or more, not including primary residence (NIPR), increased by 400,000 to reach a record 10.8 million in 2016, according to Spectrem Group’s Market Insights Report 2017. In every wealth segment, a sizable increase in number was recorded in 2016.

The USA has 126 million households and the number of households is increasing by 1.2 million each year. By 2020, the US will have about 13 million households.

If there is no recession in the next 3-4 years then it is likely that the U.S. households with a net worth of $1 million or more, not including primary residence could exceed 10% of overall US households.

US Wealth and Ethnicity

African Americans and Hispanics own homes at lower rates than whites do — even when income-level is controlled.
African Americans have more student loan debt.

Families of Asian Americans have seen the most significant increase in wealth in the past two decades, even eclipsing Caucasians in median incomes, according to the most recent study by the Federal Reserve Bank of St. Louis.

One of the factors experts have been looking at is the group’s high rate of college education, Bloomberg reported.

Sixty-five percent of Asian Americans aged 35 to 39 are college degree-holders. In the same age demographic, the figure for Caucasians is only 42%, 26% for African Americans and 16% for the Hispanics.

More Wealth Report Insights

Spectrem Group’s annual report analyzes the number of households in America based on net worth, from the Mass Affluent ($100,000 as the minimum) to the $25 million-plus segment. The report also includes information on the investment habits and behaviors of investors in all of the designated wealth segments.

Key findings include:

· In 2016, there were 30.5 million Mass Affluent households with a net worth between $100,000 and $1 million, NIPR. That reflected an increase of 700,000 households from 2015.

· The number of Millionaires, with a net worth between $1 million and $5 million, climbed by 238,000 households to a record 9.38 million.

· The Ultra High Net Worth market, in which net worth is between $5 million and $25 million, grew to 1,264,000 households, an increase of 54,000 from 2015.

· The number of $25 million-plus households reached 156,000, an increase of 11,000 (7.5 percent).

Globally, almost 18 million households control more than $1 million in wealth, according to a new report from the Boston Consulting Group. These rich folk represent just 1 percent of the world’s population, but they hold 45 percent of the world’s $166.5 trillion in wealth. They will control more than half the world’s wealth by 2021.

63 percent of America’s private wealth in the hands of U.S. millionaires and billionaires, BCG said. By 2021, their share of the nation’s wealth will rise to an estimated 70 percent.

The sources are slightly different in the U.S. compared with the rest of the world. Globally, about half of new wealth comes from existing financial assets—rising stock prices or yields on bonds and bank deposits—held predominately by the already well-off. The rest of the world’s new wealth comes from what BCG classifies as “new wealth creation,” from people saving money they’ve earned through labor or entrepreneurship.

In the U.S., the creation of “new” wealth is a minor factor, making up just 28 percent of the nation’s wealth increase last year. It’s even lower in Japan, at 21 percent. In the rest of the Asia Pacific region, meanwhile, two-thirds of the rise is driven by new wealth creation.

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