Jack Kelly, Senior Contributor
May 23, 2023
There are over 24.4 million people in the United States with wealth greater than $1 million , according to the Global Wealth Report by Credit Suisse.
Possessing a net worth—the value of all of your holdings minus your liabilities—of $1 million will not automatically place you in the gilded top 1%. To enter this high-end club, you must have a minimum net worth of around $11.1 million .
Millionaires comprise about 8.8% of the American population . The average net worth of a millionaire in the U.S. is $2.2 million , according to Charles Schwab’s 2022 Modern Wealth Survey.
New Jersey boasts the highest rate of millionaires , with nearly 10% of households having a net worth of $1 million or above. This means that almost 250,000 New Jerseyians are millionaires.
The majority of millionaires are self-made, and they have accumulated their wealth through a combination of hard work, education and investing.
The sectors that produce America’s wealthiest people include finance and investments, according to Forbes .
Factors That Helped People Become Rich
Despite the recent economic challenges, the U.S. economy has been growing steadily for years, creating new jobs and opportunities for people to earn more. The stock market was on a bull run for several years, which helped millionaires increase their wealth.
A surge in entrepreneurship, including building tech startups, helped mint new millionaires. More people are getting college degrees, which is leading to higher-paying jobs and more opportunities for wealth accumulation.
Real estate value has also been rising in recent years, which has helped millionaires bring in more money. Real estate is about 40% of a typical millionaire’s net worth. Additionally, according to data analysis by Zippia, 80% of surveyed millionaires grew up in families at or below middle-income levels . Two percent inherited their wealth from their families.
Grinding It Out And Hitting It Big
Tim Corley, a wealth expert and author, has spent years interviewing hundreds of millionaires to learn their habits and how they think.
His research concluded that 20% of millionaires made their first million in their mid-to-late 30s , despite having middle-class incomes. They accumulated wealth by practicing frugality and regularly saving and investing about 20% or more of their income.
Around 28% of millionaires rolled the dice to become wealthy. They engaged in high-risk, high-reward pursuits. These people choose to become professional athletes, musicians, entrepreneurs or actors. Most don’t make it, but those who do, hit it big. Their average net worth is $7.4 million. More than 30% of people became millionaires by following the conservative route, climbing the corporate ladder and making their way into the C-suite. These executives, on average, earn $3.4 million after 22 years.
The growth of the millionaire population in the U.S. is a sign of the country's economic strength. It also suggests more opportunities for people to achieve financial success.
When I was in college more than two decades ago, achieving a salary of $100,000 was the ideal goal to feel wealthy and comfortable. Now, according to data from the Bureau of Labor Statistics, you’d need about $130,000 to have the same purchasing power as a salary of $100k just a decade ago, due to inflation.
The benchmark salary of $100k, depending on where you reside, can either go a long way or not be sufficient enough to live. In Manhattan, with the average apartment rent costing around $5,000 a month , plus high living expenses and exorbitant tax rates, you will not have much money left over for discretionary spending. If you reside in a lower-cost state with lower taxes, $100k will stretch much further.
Other factors that will make $100k feel insufficient are if you are carrying a high burden of student loans, paying off credit card debt, living well above your means, inflation eating into your salary and savings and an unexpected healthcare emergency.
More than half of Americans earning over $100k a year live paycheck to paycheck , according to a recent report from PYMNTS and LendingClub. The study also shows that consumers anticipate that their financial situation will further deteriorate in 2023. The respondents to the survey point to high rates of inflation and economic uncertainty as causes of high concern.
To determine how much earning $100k a year is worth in different parts of the country , SmartAsset compared the after-tax income in some of the nation’s biggest cities and adjusted for the cost of living.
Where a $100k salary goes the furthest and the take-home pay:
- Memphis, Tenn.: $86,444
- El Paso, Texas: $84,966
- Oklahoma City, Okla.: $84,498
- Corpus Christi, Texas: $83,443
- Lubbok, Texas: $83,350
- Houston, Texas: $81,171
- San Antonio, Texas (Tie): $80,124
- Fort Worth, Texas (Tie): $80,124
- Arlington, Texas (Tie): $80,124
- St. Louis, Mo.: $79,921
Where a $100k salary is worth less and the take-home pay:
- New York, N.Y.: $35,791
- Honolulu, Hawaii: $36,026
- San Francisco, Calif.: $36,445
- Washington, D.C.: $44,307
- Long Beach, Calif. (Tie): $44,623
- Los Angeles, Calif. (Tie): $44,623
- San Diego, Calif.: $46,167
- Oakland, Calif.: $46,198
- Boston, Mass.: $46,588
- Seattle, Wash.: $48,959
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