Although the United States has changed a lot in recent years, America is still known as the land of opportunity. Despite all the social changes, one thing remains at least partially true: it is possible to succeed and become a millionaire in the United States, even if you start from scratch.
Given this, it is hardly surprising that the country is full of millionaires. How many millionaires in the US are there? According to a recent survey, there are now about 22 million millionaires in the United States.
To put that into context, that's more people than the total population of Florida! In other words, 8.8% of Americans are millionaires, and they're in the top 10 percent of net worth. If you're an American, you probably know at least one millionaire—maybe it's your boss, or maybe just your doctor.
This might be shocking to someone from outside the US, but in America you can be a millionaire and consider yourself middle-class. When you consider how many millionaires in the world consider themselves influential, it’s surprising to see that they’re not top 1 percent net worth in America.
What is a millionaire?
It should be noted that in the United States, the definition of a millionaire is someone who has $1 million in assets—debt should be subtracted from assets. Quite a few Americans have debt, whether it's a mortgage or a student loan. The average net worth of Americans is $750.000 per household—but the median is only $150K. The number of billionaires in the US and US millionaires change this statistic.
The fact is that reaching what’s considered rich in the USA is not difficult if you have good prospects. It is estimated that 21.5% of middle-aged white people with a college degree are or will become millionaires.
However, it is worth remembering that the United States is a country with huge inequalities. In many places and states in this country, simply being white gives you a huge advantage in life, even if Americans won't admit it! Despite the fact that African-Americans make up about 13% of the US population, only 6.5% of African-Americans with a college education will become millionaires.
Similarly, in the United States, university education is paid for and requires some investment. While there are many well-paid jobs not requiring a degree, university education helps in getting a good job. Most Americans must be at least in the middle class for their children to earn a bachelor's degree. Education is important to becoming rich, since more than 80% of millionaires have graduated from college, compared to 33% of the adult American population.
What's the difference between a millionaire and a billionaire
This should come as no surprise. When we think of a millionaire, we often see a big house and a yacht… but in reality, these are the characteristics of a billionaire. Although a million and a billion sound similar, one billion dollars is one thousand millions. If you put aside a thousand dollars a week, you would have a million in your account in 20 years… and a billion in 20 thousand years!
The number of billionaires in the US is far smaller—there are about 720 ultra rich. They’re not top 1 percent net worth -more like 0.001 percent. Millionaires in the United States are wealthy and often very talented, although they are not ultra-wealthy and often work for a living. Owning one or two good properties can typically make a fortune.
A billionaire is extremely wealthy. Although a millionaire can be important, he is generally only a significant employer in his city or state. Billionaires in the USA like Jeff Bezos or Elon Musk have a significant impact on the entire world.
Where does the wealth of millionaires come from?
If you are a talented engineer, doctor or well-paid lawyer, you are quite likely to become a millionaire by the age of sixty. Many US millionaires earned their money themselves: they did not inherit a fortune, and half of them paid for their own education. But tuition fees are much higher now, especially if we remember that most US millionaires are middle-aged people who studied in the 1960s or 1970s.
Since the top tax bracket in the United States is low (only 37%, compared to 55% in some European countries such as France and Austria), people are inclined to accumulate money, and the wealthy are getting richer. This all affects how many millionaires in the US there are, but still, quite a lot of American millionaires don't fall into this tax bracket. Often their wives do not work—but this is quite common in the US.
Most millionaires are baby boomers who were born after World War II. Many of them grew up during periods of great prosperity. After World War II, the United States was essentially the only industrialized country to emerge from the conflict relatively unscathed. It was American workers who built tools for Europe and even the Soviet Union.
Boomers and US millionaires
This determines that for decades, the parents of today's 70-year-olds were assured of a job and a home. Unlike today's generations, boomers had access to affordable loans and preferential government treatments. In contrast, only 16% of US millionaires are millennials (born in the 1980s and 1990s). When boomers were growing up, the highest tax bracket in the United States was 90%—but that changed under President Reagan.
About half of millionaires have lived in the same house for more than twenty years. As a result, the value of their real estate has increased significantly, meaning that up to half of a millionaire's fortune can be tied to their property (and the value of real estate has increased rapidly in the 21st century).
It should also be remembered that the value of the U.S. dollar and what’s considered rich is declining over time due to inflation. Compared to the 1990s, the purchasing power of the dollar has fallen by 127%. This means that in 1990 you could buy for a dollar what today you can buy for $2.27. So if a person started out having an average fortune, inflation, and the increase in real estate costs alone helped him become a millionaire.
How does one become a millionaire?
Of course, most millionaires really owe their wealth to hard work (with billionaires in the USA, it's not so easy to say) and wise management of their own finances. Saving money for the future is a key habit, and the sooner you incorporate it into your daily routine, the better for you.
If you really want to start putting away and investing, savings should be a component of your budget. Don't make the mistake of paying all your payments and then putting aside what's "left over". Include savings in your payments and pay yourself first!
Your raise should also mean an increase in savings. If you've managed to live up to this point, you can put the surplus into a savings account, and you’ll rise to top 1 percent net worth in no time!
Consider starting an additional business. Increasing your income is a great way to increase your savings. Take up a second job or engage in a side hustle, and put the income into savings. Consider learning more about how to make money on Paidwork.
When considering a career change, consider not only the direct wages, but also the benefits, such as savings on commuting and the opportunity for advancement. Especially if you consider education’s importance in becoming a millionaire, it’s a good idea to constantly develop your skills.
Take care of your education—not just your university education. Set aside 15 minutes a day to learn a new skill or certificate, and you'll be surprised how it will affect you and your resume.
