Wednesday, September 28, 2005

Are you a millionaire, but still feel insecure?

CNN/Money released an article today about the number of households that are millionaires. Households with a net worth of at least $1 million excluding primary residences rose 8 percent to a record high 8.9 million. What I find interesting in this article is the mention of total income reported among millionaire households. They averaged $119,000. Among those households that drew some of their income from jobs, they earned an average of $82,000 in salaries or professional fees. The average age among the heads of these households was 56, and about 75 percent of them said they felt confident they will be financially prepared for retirement.

$119,000 isn't that much relative to their net worth. If that's the case, this group (at least the median earners in this millionaire club), is living the Millionaire Next Door life. They're using good offence (income) and great defense (saving).

Of course there are others, who make $600,000 a year and are "struggling" to make ends meet. A Financial Times commentary on Aug 30, 05 has an article about a hedge fund manager who can barely make ends meet with his $600k income. Interesting views on a secure future: one group making $119k who are millionaires, and another making $600k and feel poor.

Looking ahead, there will be a huge focus on the 'emerging affluent' (households with a net worth between $100,000 and $500,000, excluding primary residences) and financial services geared to the younger Generation Y. Look for financial services companies to focus on them in the near future.


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