America's newest millionaires don't feel rich, say it's not 'what it used to be'

Marvin Xu, a newly minted millionaire and Seattle-based software engineer, told The Washington Post that he doesn't perceive his financial status as particularly significant relative to when he grew up in the early 2000s. 

Raised by a father also in the tech field, he was taught that achieving millionaire status was a rare lifetime goal.

"It's a nice milestone," he remarked. "But of course, a million dollars then isn't what it is now. I don't have the $1 million my dad envisioned years ago."

Inflation plays a large role in this perspective. In the U.S., the value of the dollar has diminished, leading to higher costs of living. 

According to the Survey of Consumer Finances, only 4% to 6% of millionaires possess liquid cash; the majority of their wealth is tied up in investments such as retirement accounts. While it may feel reassuring to have a secure retirement, many find it difficult to feel affluent when their wealth is largely invested and subject to market fluctuations.

Furthermore, according to those interviewed by the Post, the perception of millionaire status doesn't translate into a substantial change in lifestyle. 

"The only thing that's different now is: I buy organic strawberries every time I go to the store," noted a millionaire from California — a small pleasure that rising prices and wealth disparity are making harder to maintain.

"It's not quite what it used to be in terms of rarefied status," another recent millionaire stated.

Currently, the average American household has a net worth exceeding $1 million, with around one in six families reaching this financial landmark.

However, in many regions, $1 million has simply become a "starting point" for achieving the American Dream, with average entry-level homes in more than 200 U.S. cities exceeding this amount, per a Zillow report.

Which of these savings plans for rooftop solar panels would be most appealing for you? Save $1,000 this year 💸 Save less this year but $20k in 10 years 💰 Save less in 10 years but $80k in 20 years 🤑 Couldn't pay me to go solar 😒 Click your choice to see results and earn rewards to spend on home upgrades.

As the average age of first-time homebuyers increases to 40, so too does the age of millionaires, with households headed by individuals aged 65 and older now comprising 42% of this demographic, compared to 28% in 1989.

Today, $2.1 million equates to what $1 million represented three decades ago, which further clarifies the increase in the number of millionaires compared to previous generations.

Despite a growing population of millionaires, many still find it frustratingly out of reach. The wealth distribution shows that the top 10% control two-thirds of household wealth, averaging $8.1 million, while the bottom half collectively holds just 2.5%, or an average of $60,000.

The disparity between affluent Americans and the rest of the population has widened, particularly since the COVID-19 pandemic, as high-income households benefit from soaring home prices and stock market gains. Conversely, lower- and middle-income individuals face mounting challenges due to rising costs and struggles with bills, loans, and everyday expenses.

Even those who achieve multimillionaire status often do not feel completely secure.

Megan Gorman, a financial adviser, noted: "Even wealthy people never feel completely at rest. There is always that concern: Am I going to be OK?"

Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.