About A Wealth of Knowledge
Financial expert Michelle Singletary answers questions about personal finance and the economy.
Visit the Road to Wealth for more personal finance information.
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Millionaire Club
Q: Would it be realistic to expect the average American to be a millionaire within his/her lifetime? And, if not, what is it we're doing wrong, and how can we correct it?
Landry Tientcheu, Madison, WI
A: You might be interested to know the world's population of high net worth individuals dropped 14.9% in 2008, according to the 13th annual World Wealth Report, released by Merrill Lynch Global Wealth Management and Capgemini.
The U.S. saw its population of millionaires drop 18.5%, although it remains the single largest home to the rich, with 2.5 million, or 28.7%, of the total global population of high net worth individuals, which is defined as someone with net assets of at least $1 million, excluding their primary residence and consumables.
There were 3.5 million U.S. millionaires in 2001, according to the Census Bureau. There are, according to the latest figures, 307 million people in the U.S.
It suffices to say, the population of millionaires compared to our total population is low. So, while lots of financial experts will say it's possible to be a millionaire in America, the truth is it's unlikely most people will end up as high net worth individuals. No, I don't think it's realistic to expect the average American to be a millionaire.
I'm certainly not discouraging anyone from reaching for that millionaire bar. Some reach that level because they earn a lot. Some inherit their wealth. Others, with time, luck and a good diversified investment portfolio, achieve great wealth. But you shouldn't feel like a financial failure if you don't get your millionaire club pin.
What is realistic is financial security, and that can come with a combination of things--a good education, developing and sticking to a sound budget, saving, keeping your spending under control and investing wisely.
On this site, there are some very useful tools, tip sheets and videos that can help put you on the road to great wealth. After all, one of the most important steps to prosperity is becoming better informed.