Percentage of Americans with at least $4 million net worth

[bjl584]

Can You Guess What Percent Of People Have $4 Million? Here's A Look At How Many Reach This Major Wealth Milestone (yahoo.com)

[riverwed070707]

I always find it strange to use data like "Americans’ average retirement savings is $334,000, while the median – a more accurate picture – is just $86,900" when talking about how people are doing with saving. Most 20 year olds have a negative net worth and minimal - if anything - saved for retirement. I'd rather see a picture of the median and average for people who are at retirement age. Feels more relevant.

That said, I'm kind of shocked 3% have $4M+. I will definitely never be in that club, nor do I need to be. I anticipate having approx. $500k in tax advantaged retirement accounts + $5k of passive monthly income.

[disneysteve]

I guess I should start calling myself a three percenter.

Our portfolio is at $3.9 million. Add in the house and cars and stuff and we’re certainly over the $4 million mark.

[Fishindude77]

Unfortunate that so many have little or no nest egg. I wish basic money management and finance were required school curriculum for grades 1 thru 12.

[disneysteve]

I can’t help but laugh that at the same time I’m talking about our $4M net worth, our outing today was a trip to Goodwill, lunch at a little Mexican place where we shared an $18 order of enchiladas and drank water, and then went to Walmart. We are definitely the “millionaires next door” type of people.

[disneysteve]

I will definitely never be in that club, nor do I need to be. I anticipate having approx. $500k in tax advantaged retirement accounts + $5k of passive monthly income.

Is the passive income from real estate? If so, what's the net worth counting the property values? What about your primary home?

Obviously, most people don't need anywhere near $4M since only 3% are actually at that level. If you've got 60K of passive income plus another 20K based on a 4% withdrawal rate from the retirement accounts, that gives you $80,000/year not counting Social Security. That's plenty for a comfortable retirement.

[ua_guy]

$4M seems awfully low for only 3% of people to achieve. That means the .10-1% still tower above everyone else in terms of wealth, $4M is nothing in those circles. Something ain't right there, but that's another discussion.

I used to think $1M is a lot of money, and by objective standards it is, compared to what most people have. Shocking how far that doesn't actually go in certain areas of our country around areas with high paying jobs.

[disneysteve]

$4M seems awfully low for only 3% of people to achieve. That means the .10-1% still tower above everyone else in terms of wealth, $4M is nothing in those circles. Something ain't right there, but that's another discussion.

I used to think $1M is a lot of money, and by objective standards it is, compared to what most people have. Shocking how far that doesn't actually go in certain areas of our country around areas with high paying jobs.

$1M really isn't that hard to achieve in one's lifetime with a modest effort. Our daughter just turned 29. She's been at her job a little over 2 years. Between college and this job she worked a couple of low end part time jobs making not very much. Only now, 6 years after college, is she grossing 50K+. And yet, she is debt-free and has a portfolio worth about $130,000. Obviously we helped a lot and not all kids have that privilege, but still she could just as easily have been blowing her money instead of saving it. Even if she doesn't add another penny to it ever, 130K can easily grow to $2 million by age 65 with an average annual return of 8%. Since she continues to contribute regularly to her 401k and Roth as well as non-retirement savings, she's on track to be in that 3% group too. 50K is hardly a lavish salary and she's only been at that level for maybe a year but time and compounding and dedicated saving habits can work miracles.

[disneysteve]

By the way, the article actually says 3.44%, so closer to 4% for whatever that's worth.

[srblanco7]

$1M really isn't that hard to achieve in one's lifetime with a modest effort. Our daughter just turned 29. She's been at her job a little over 2 years. Between college and this job she worked a couple of low end part time jobs making not very much. Only now, 6 years after college, is she grossing 50K+. And yet, she is debt-free and has a portfolio worth about $130,000. Obviously we helped a lot and not all kids have that privilege, but still she could just as easily have been blowing her money instead of saving it. Even if she doesn't add another penny to it ever, 130K can easily grow to $2 million by age 65 with an average annual return of 8%. Since she continues to contribute regularly to her 401k and Roth as well as non-retirement savings, she's on track to be in that 3% group too. 50K is hardly a lavish salary and she's only been at that level for maybe a year but time and compounding and dedicated saving habits can work miracles.

I agree with the sentiment that it's not that difficult to achieve a $1M net worth over a lifetime. It's not "magic" - live on less than you earn, invest the money in index funds and leave it alone, etc. And yet, it remains out of reach for so many. Deferred gratification is, in general terms, not something that's well embraced in our culture.

[ua_guy]

My point wasn't the degree of difficulty in achieving $1M, it's how far that really doesn't go in certain areas given high costs.

[disneysteve]

My point wasn't the degree of difficulty in achieving $1M, it's how far that really doesn't go in certain areas given high costs.

Absolutely. I wasn't speaking to that point. $1M is not much money today. For a retiree living on their portfolio, that's only $40,000/year. There's no way we could survive on that unless we sold our home and moved elsewhere in the country.

[riverwed070707]

Is the passive income from real estate? If so, what's the net worth counting the property values? What about your primary home?

Obviously, most people don't need anywhere near $4M since only 3% are actually at that level. If you've got 60K of passive income plus another 20K based on a 4% withdrawal rate from the retirement accounts, that gives you $80,000/year not counting Social Security. That's plenty for a comfortable retirement.

Yes from real estate - both lending and rental income. I actually ran some projections on this yesterday. Current NW is just under 1M. Will sell the primary in 3 years and travel/rent. In the calc I used, I was able to play out a scenario where I retire at 42, leverage rental income until 55 and then sell the rentals and live off my retirement accounts. My portfolio value peaks around $3.4M, which honestly is quite a bit higher than I anticipated with conservative ROI projections and a modest sale price for my rentals. Here's the calc if it interests anyone

[disneysteve]

Yes from real estate - both lending and rental income. I actually ran some projections on this yesterday. Current NW is just under 1M. Will sell the primary in 3 years and travel/rent. In the calc I used, I was able to play out a scenario where I retire at 42, leverage rental income until 55 and then sell the rentals and live off my retirement accounts. My portfolio value peaks around $3.4M, which honestly is quite a bit higher than I anticipated with conservative ROI projections and a modest sale price for my rentals.

Sounds great. See, you’re not as far from the 3% club as you think. And if you used conservative returns you may end up over $4M.

[LivingAlmostLarge]

More people are secret $4m millionaires. I'd put my mom, in-laws and turns out friends in that category. Friends are in their late 40s with a paid for home and duplex and investments off of a single income. Then my in laws and mom? Large pension and SS and paid for homes.