What is a millionaire?

Definition and Examples of Millionaires

Today, a millionaire is generally defined as a person or married couple whose wealth (net worth) is over 1 million dollars. Under this definition, the number of millionaires worldwide has increased over the past century.

How Does Being a Millionaire Work?

When considering whether someone is a millionaire, you often look at their net worth. According to a report by Spectrem Group, there were 11.8 million Americans with a net worth exceeding 1 million dollars in 2019.

Where Did the Term “Millionaire” Come From?

The term “millionaire” comes from the French language and was first used in 1786. It was used to describe men who became wealthy from investments in North America. By 18th-century standards, a millionaire was someone who had amassed an unimaginable amount of wealth.

The Millionaire Profile

By looking at a person’s list of assets and considering their assets and debts, we can determine whether they have a net worth exceeding 1 million dollars. For example, let’s say John Doe has a net worth of 1.17 million dollars, with debts of 125,000 dollars, so his total net worth (assets minus debts) is 1,045,000 dollars. Therefore, John is a millionaire.

Alternative Definition of Millionaire: Liquid Assets

Despite these figures, some people may refuse to classify John as a millionaire. Using an alternative approach to classify and analyze wealth, they argue that only liquid assets (such as cash, stocks, and mutual funds) qualify for the title of millionaire. According to this definition, John’s home, car, and personal belongings (such as antique furniture) should not be counted in his personal net worth due to the difficulty of selling all of his assets for cash, even if he wanted to.

Multi-Millionaire vs Millionaire

The difference between a multi-millionaire and a millionaire depends on the numbers. A multi-millionaire is a person with several millions of dollars when considering their net worth. A decamillionaire, more specifically, is someone with between 10 million and 99.99 million dollars.

Conclusion

John Doe may or may not be a millionaire, depending on the definition you use to evaluate his financial situation. However, regardless of how you consider his net worth, it is significantly higher than that of the typical American family.

Frequently Asked Questions

Who is considered a millionaire? A person is considered a millionaire when their net worth, that is assets minus debts, equals 1 million dollars or more. Some trends see that only liquid assets such as cash and securities should count towards the millionaire title, whereas assets like real estate, cars, and personal furniture are more difficult to sell for cash if needed.

Is a millionaire considered wealthy? For most people, the answer to the question is yes, a millionaire is considered wealthy. According to the latest available data from the Federal Reserve’s survey of Americans, the median net worth of American families in 2019 was 121,700 dollars, which is much less than a net worth of 1 million dollars.

Source: https://www.thebalancemoney.com/what-is-a-millionaire-453762

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