Assets increase rapidly among the ranks of 'little millionaires' in the US

Last week, the US Federal Reserve (Fed) revealed that last year, the median net worth of American families reached $1 million for the first time, up 42% from $749,000 in 2019.

Of course, that average is dominated by a small number of billionaires and millionaires. Inflation means that real wealth has not increased much. But it would be a mistake to conclude that the increase in wealth is a phenomenon of the top 1%, or that it is inflated by inflation and asset bubbles.

Tài sản tăng nhanh trong hàng ngũ 'tiểu triệu phú' ở Mỹ - Ảnh 1. — Many middle class Americans have become millionaires.

One notable finding is the rise in millionaires, according to the Fed’s latest Survey of Consumer Finances, which is conducted every three years. About 16 million American households—more than 12% of all households—will have assets exceeding $1 million by 2022, up from 9.8 million in 2019. Nearly 8 million households will have assets exceeding $2 million, up from 4.7 million in 2019.

According to The Wall Street Journal , these people are called "mini-millionaires" (roughly translated as "little millionaires"), as opposed to millionaires and billionaires in the 1% (ie the super-rich group). "Mini-millionaires" usually earn between $150,000 and $250,000 a year. They are generally not considered wealthy but rather upper middle class, according to American standards.

Far from being left behind as the economy’s gains have gone to billionaires, the “mini-millionaires” have actually seen their wealth increase more than the top 10% of households over the past three years. The largest wealth gains from 2019 to 2022 were among the roughly 13 million households in the 80th to 90th percentiles of the income distribution. Their median wealth increased 69% from 2019 (adjusted for inflation) to $747,000 in 2022.

Certainly, for many American families, skyrocketing prices since the pandemic began mean that income is no longer worth as much as it once was. But as these figures show, the growth in net worth for these families has far outpaced inflation.

More than 90% of these households said they owned stocks, either directly or through retirement accounts, and 87% owned homes. They have benefited greatly from low interest rates, which have seen the share of their income spent on debt payments fall from 19% in 2007 to 12.9% in 2022.

Instead of being dominated by the 1%, the U.S. economy is creating an expanding middle class. Many people entered this group by earning college degrees, steadily building savings accounts, and buying homes. For the most part, they grew rich slowly, gaining a foothold in the economy as Covid-19 stimulus programs boosted asset values.

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