Despite little wage growth and declining job prospects among young Americans, the U.S. is home to vast stores of wealth and a millionaire class that outsizes that of any other country in the world. And it’s about to get even bigger.
The number of Americans who meet the millionaire threshold is set to increase by an average of 1,700 every day for the coming years, Bloomberg reports, based on projections by the Boston Consulting Group. By the year 2020, the U.S. is expected to welcome 3.1 million new members into its millionaires' club, which grew by 2.4 million from 2010 to 2015.
Today, there are about 8 million American households with assets worth more than $1 million, excluding properties and luxury goods, the firm said.
The coming spike in individual wealth will largely be due to what Bloomberg calls “the largest generational transfer of wealth in history.” Much of America’s wealth is concentrated among older generations, whose mostly already affluent offspring are about to inherit a fortune.
Inheritance matters in maintaining financial growth, according to research by the Spectrem Group, a consulting firm cited by Bloomberg. Over 73% of surveyed investors under 50 with assets above $25 million told the group that inheritance factored into their success.
Some 75% of Americans, however, are what the Federal Reserve Bank of St. Louis calls “strugglers," while the remainder is classified as “thrivers.” The former make just enough to get by little each year, while the latter are able to successfully save and accumulate wealth. With so much money being handed down through inheritance, a swift rise in the number of millionaires is unlikely to upset the order of concentrated wealth.
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But being a millionaire may not matter as much as it used to. Bloomberg says a net worth of $1 million today has the buying power of, say, $341,000 in 1980, or $45,000 in the early 20th century. Being a millionaire these days doesn’t even necessarily qualify one as “rich,” as living expenses, education, and retirement easily chip away at the sum.
Nonetheless, the vast majority of America’s working class would surely welcome an invitation into the country’s growing legion of seven-figure holders.