The following is a sentence that has been repeated for 10 years in a row:
“There are more Millionaires in America this year than there were last year.”
Spectrem’s Market Insights determines the number of wealthy households in America and has been doing so since 2006. In 2008, when the stock market crashed and the country experienced its first full-blown recession in 80 years, the number of wealthy investors dropped. Since then, every year, the actual number has risen.
But the 2018 results show growth in the affluent American market has slowed. For example, the number of American households with a net worth of at least $1 million from 2017 to 2018 grew from 11.5 million to 11.8 million, a total growth of 300,000, which is less than 3 percent. The growth from 2016 to 2017 was 700,000, more than double the increase in the following year.
Let’s look deeper into the numbers related to the Millionaire class of investors, described in Spectrem’s Market Insights as those investors with a net worth between $1 million and $5 million (not including primary residence):
In 2008, the number of Millionaires dropped from 8 million to 5.9 million, a decrease of more than 25 percent. It took more than four years to recover the 3 million-plus Millionaires in the market. In 2012, the number of Millionaires reached 7.9 million. In 2013, the number rose 500,000 to 8.4 million.
Since 2008, there have been four years in which the total number of Americans with a net worth between $1 million and $5 million grew by at least half a million. In 2009, it grew by 900,000; the next year added another 500,000; from 2012 to 2013 the total grew again by 500,000 ; and then, in 2017, the new grew by almost 600,000, to 9.98 million Millionaires.
The study also looks at investors with a net worth over $25 million, and there have been years when that population has grown significantly since 2008.
In 2008, the number of $25 million plus investors dropped from 125,000 to 84,000, a decrease of more than almost 3.5 percent. It took five years to recover from the Great Recession as it is related to the wealthiest Americans; in 2013, the total rose by 15,000 to reach 132,000. It was not, however, the largest growth in the market in the 10 years following the Great Recession.
In 2017, the number of $25 million plus investors grew from 156,000 to 172,000, an addition of 16,000 which translates to a 10-percent growth. No wonder there was less growth in the following year.
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