Number of millionaires hits record

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http://money.cnn.com/2005/09/28/news/economy/millionaire_survey/index.htm?cnn=yes

Number of millionaires hits record
There are 8.9 million affluent households, and the number of 'emerging affluent' grow, study finds.
September 28, 2005: 5:36 AM EDT
By Jeanne Sahadi, CNN/Money senior writer

NEW YORK (CNN/Money) - <snip>Households with a net worth of at least $1 million excluding primary residences rose 8 percent to a record high 8.9 million (up 700,000 over last year but less than the 33% increase seen in 2004, and "emerging affluent" net worth between $100,000 and $500,000, excluding primary residences, households grew from 24.5 million, up from 23.9 million in 2004) according to an annual report by TNS Financial Services, a market research and polling firm.<snip>

And while the number of millionaire households owning individual stocks and bonds went up, the average balance in their investment portfolios went down (and fewer are owning investment real estate). Likewise, those owning mutual funds also saw their account balances decline from an average of $355,000 last year to $283,000 this year.

On the plus side from a net worth perspective, these households' overall debt fell, by 8 percent, from an average of $179,000 last year to $165,000.

<snip>The total income reported among millionaire households 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.

<snip>The average age of the emerging affluent is 49.6, and the average total income reported is $64,600. Among those households that drew some of their income from jobs, they earned an average of $45,000 from salaries or professional fees.

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1. Not copyrighted press release from "businesswire" on above

http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20050928005186&newsLang=en

Millionaires Once Again on the Rise, Reports New TNS Survey

NEW YORK--(BUSINESS WIRE)--Sept. 28, 2005--For the third consecutive year, the number of households with more than one million dollars ($1MM) in net worth (excluding primary residence) has risen, according to new research released today by TNS Financial Services, a division of TNS, one of the world's largest market information companies.


Based on the latest Affluent Market Research Program (AMRP), TNS' annual survey of wealthy U.S. households, the number of millionaires increased 8 percent over last year to 8.9 million as of May 2005.

Number of U.S. Millionaire Increase from prior year
Households
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(In millions)
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2005 8.9 8%
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2004 8.2 33%
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2003 6.2 13%
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2002 5.5 -9%
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2001 6.0 -4%
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Unlike 2004, year to date stock market growth did not fuel the increase in millionaire households. The Standard & Poors 500 and NASDAQ posted no significant gains during the time period measured, and the Dow Jones Industrial Average posted only a 4% gain. In fact, while ownership of stocks and bonds is up (72% of millionaires own individually held stocks and bonds, up from 63% in 2003), the average balance invested is down. Ownership of mutual funds is flat and the average balance also fell, dropping about 20% (mean among mutual fund owners in 2005 was $283,000 versus $355,000 in 2004.)

The influx of new millionaires represents long-term wealth accumulation, rather than new wealth creation. "These households did not become rich overnight," says Jeanette Luhr, manager of the research study. "They have, however, benefited from economic changes in the past several years, and taken advantage of them." For instance, debt has decreased substantially from last year. In 2004 the average debt was $179,000. This year that number fell to $165,000, an 8% decrease.

"The growth we've seen this year is largely due to measured planning and active reinvestment. Though we've seen some product shifts, overall the asset allocation of these households has not changed significantly," Luhr said. "When asked about their investment approach over the past year, 61% of millionaires said their approach has changed very little, indicating they have a strategy and they are sticking to it."

Nor is real estate and its famed "bubble" a driving force behind the increase in the number of millionaires. In fact, ownership in investment real estate is down from 2004. That year, 50% of millionaires owned some kind of investment real estate, including second or vacation homes, compared to 44% in 2005. Though real estate continues to be a staple in their investment portfolios, these households are not becoming wealthy solely based on their real estate investments.

Emerging affluent households, those with $100K-$500K net worth, excluding primary residence, have also increased in the past year, from 23.9MM in 2004, to 24.5MM in 2005. "More and more we are seeing financial institutions offer planning services designed specifically for the emerging market. As these households continue to take advantage of these tools, we're seeing their numbers increase," Luhr adds.

In addition, confidence seems to be increasing. Over three-quarters of high net worth households feel they will be financially prepared for retirement.