why so few Americans are millionaires?

Most Americans (70%) earn less than $50,000 per year. However, taking into consideration dual income families, the average household income is much higher than $50,000. The $50,000 to $100,000 income range consist of 25% of American households while 5% earn more than $100,000 per year. Of the 105 million households in America, only 4 million households (approx. 4%) have accumulated a net worth of $1 million or more even though 30% of all Americans earn more than $50,000 per year.

What is the makeup of the 4 million households that call themselves "millionaires". The average taxable income is $131,000. Of course, income is only taxed when it is realized. Tax deferred investments are a high priority for those who desire to increase their wealth. Surprisingly, 80% of those in the millionaire status are first generation and in 70% of the households, the male contributes 80% of the income. Almost all millionaires are married (95%) and 1/2 of the wives do not work outside of the home. The number one job of wives in millionaire households is a teacher. Half of all millionaires (50%) have lived in the same home for more than 20 years. Less than 25% drive current year model cars and only a small minority ever lease autos. (see Book List - The Millionaire Next Door)

The follow list of statistics makes it clear why so few Americans are millionaires and the great need there is in our country to become better money managers: (see In The News)

70% are living paycheck to paycheck (Source: Wall Street Journal)

Less than 30% use a written monthly budget to manage household finances/

Average American spends $1.22 for every dollar they earn. (Myvesta.org, Inc

95% argue about money related topics on a regular basis

Credit Card Debt results in deaths...(Fox News, 5/13/02)

55% always or sometimes worry about money (Source: Marist Institute poll published in USA Today)

Personal saving rate in America is 3.6%, down from 8.7% in 2000. (8/31/02) (Ned Davis Research, Inc.)

62% of all American H.H. don't save or don't save regularly (Source: data from the Federal Reserve Board's Survey of Consumer Finances dating from 1998. Data released 5/13/02 in an article "New Report Finds One-Quarter Of U.S. Households Are Wealth-Poor".

Household net worth is less than $15,000 (excluding equity in house) (Source: "The Millionaire Next Door," pg. 2)

Typical non-mortgage household debt is $38,000 or more

185 mil. Americans (population of 282 million) have at least one credit card with the average number of cards per person at 6.5. (Source: www.cardweb.com)

84 mil. households (total of 105 million) have at least one credit card with the average number of cards per H.H. at 14.3. (Source: www.cardweb.com)

Average balance per H.H. (with at least one credit card) is $8,562. (Source: www.cardweb.com)

95% finance one or more autos at an average of $375/mo. for 60 months

Household debt as % of disposable income exceeds 100% (Source: Federal Reserve)

Personal debt as a % of net worth is 27.2% (6/30/02) (Ned Davis Research, Inc.)

Mortgage debt as a % of personal income is 87.54%; Consumer Credit as a % of personal income is 19.22%; Total debt as a % of personal income is 106.76%. (9/30/02) (Ned Davis Research, Inc.)

Less than 10% have computed a target goal for retirement

Only 44% of Americans are preparing for retirement

62% will retire with less than $10,000 income per year (Source: U.S. Census Bureau)

75% do not have a legal will or trust

Only 28% of people with insurance (life, auto, home, health or disability) really understood the details of their coverage-according to NAIC. (Source: The Washington Post - 3/13/03)

5 billion credit card solicitations were mailed out in 2001 (average 20 solicitations for every adult and child in the U.S.), up from 3.5 billion in 2000

Average U.S. family took on more than $1,400 in new debt during the first six months since the recession began in 3/01 - according to The Wall Street Journal.

2001 median incomes: all families = $39,900; top 10% = $169,600

2001 net worth: all families = $120,000 (whites); top 10% = $833,600
Source - Federal Reserve Consumer Finances Report

40,000 Americans polled by Newsweek Magazine responded:

Happy if the lights are on and the frig is full - 5%

I am really worried about my finances - 11%

I can make ends meet but I am still worried - 17%

I'm ok day-to-day but I wake up sweating about retirement - 10%

I've started to invest for the future but worry it won't be enough - 25%

Personal Bankruptcy Rates:
(Source: Administrative Office of U.S. Courts)

1998 - 1.39 million

1999 - 1.28 million

2000 - 1.21 million

2001 - 1.45 million

2002 - 773,740 (January - June) On track for 6.5% increase over 2001