What is your definition of a millionaire?

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AUTHOR: Amy Reed on 6/22/2024

I recently heard a fascinating discussion about millionaires.  A financial advisor was speaking to an audience and made the comment that billionaires have jets and millionaires have two used Toyota Camrys in the garage.  His point was that millionaires become millionaires by living below their means and that most millionaires whom he has met live modestly.

He went on to say that there are an estimated 24 million people in the United States who are millionaires.  (Wikipedia says there are around 5 million millionaires in the U.S.)   His definition of a millionaire was a person’s net worth, including their home and their retirement accounts.

I agree with his definition on technical terms. However, picture this.  A married couple in their early 50’s paid $225,000 for their house 20 years ago.  They make modest salaries — say one is an elementary school teacher and the other is an accountant.  They each have been saving in a 401-K retirement account through their jobs.  They have no consumer debt and have paid off their mortgage.  They drive older model cars.   Today, the value of their house has almost tripled, with Zillow assessing it at $600,000.  They each have saved $200,000 in their retirement accounts.  Since they have no debt, their net worth is $1,000,000 ($600,000 + $200,000 + $200,000).   They technically are millionaires.  Yet they can’t touch that retirement money until they retire.  They don’t want to sell their home and move, and even if they did, they’d have use the proceeds from the sale of their house to purchase a new home.  On paper this couple may be millionaires, but they don’t feel like “millionaires.”

I am curious … how do you define a millionaire?




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