AskDefine | Define millionaire

Dictionary Definition

millionaire n : a person whose material wealth is valued at more than a million dollars

User Contributed Dictionary

English

Etymology

From millionnaire.

Noun

  1. Somebody whose wealth is greater than one million dollars, or the local currency

Related terms

Translations

Extensive Definition

A millionaire (originally and sometimes still millionnaire) is an individual whose net worth or wealth exceeds one million units of currency. It can also be a person who owns one million units of currency in a bank account or savings account. Depending on the currency, a certain level of prestige is associated with being a millionaire, which makes that amount of wealth a goal for some, and almost unattainable for others .
The increasing number of millionaires is partially due to prevailing economics: Increasingly, the term denotes more and more to the status of high wealth. American sociologist Leonard Beeghley classifies all households with net worth exceeding $1 million as "The Rich." Currently, there are over 9 million residents around the globe classified as millionaires.

Terminology

The increasing prevalence of people with more and more money has given rise to additional terms to further differentiate millionaires. A multimillionaire has a net worth of more than 2 million units of currency, a decamillionaire has a net worth of more than 10 million units of currency, and a centimillionaire has a net worth of more than 100 million units of currency. (Some argued that the term hectomillionaire is more appropriate because the metric prefix "centi-" means 1/100, but the word centimillionaire is more established and its etymology is consistent with the Latin root for 100.) While statistics regarding financial assets and net worth are presented by household, the term is also often used to describe only the individual who has amassed the assets as millionaire. That is, even though the term statistically refers only to households, common usage is often in reference only to an individual.
As a result of the declining prestige associated with the word millionaire, a neologism has been coined by some financial analysts for those whose net worth is in the millions but who are not considered "super-rich": Millionaire, or middle-class millionaire.

Net worth vs. financial assets

Recently, there has been some controversy over how to correctly determine a person's status as a millionaire. One of the two most commonly used measurements is net worth, which counts the total value of all property owned by a household minus the household's debts. According to this definition, a household owning an $800k home, $50k furnishing, two cars worth $60k, a $60k IRA, $45k in mutual funds, and a $325k vacation home with a $250k mortgage, $40k in car loans, and $25k in credit card debt would be worth $1,025,000 and every individual in this household would thus be a millionaire. However, according to the financial assets measurement, equity in one's principal residence is excluded. So are all other fixed assets, such as the car and furniture. Therefore the above example household would only have net financial assets of $80,000. In recent years homes have become very valuable, due to the recent real estate bubble: In some neighborhoods, such as Palo Alto, the average house is worth more than $1 million USD. For this reason there are many people in million-dollar homes whose net worth is far short of a million—in some cases the net worth is actually negative. For this reason, those who market goods, services, and investments to high net worth individuals are careful to specify a net worth "not counting principal residence."
While millionaires constitute only a small percentage of the population, they hold vast control over economic resources with the most powerful and prominent individuals usually ranking among them. Forbes and Fortune magazines maintain lists of people based on their net worth and are generally considered authorities on the subject. According to Forbes latest annual list of the World's Billionaires published in March 2008 there are currently 1125 members of the exclusive Billionaire's club US-dollar billionaires in the world. The number of Millionaires and Multimillionaires is also higher.

Historical Worth

Depending on how we calculate it, a million US dollars in 1900 is equivalent to 2006 US dollars of
  • $24,766,584.77 using the Consumer Price Index,
  • $21,224,697.05 using the GDP deflator,
  • $114,128,571.43 using the unskilled wage,
  • $162,813,054.25 using the nominal GDP per capita,
  • $641,531,874.47 using the relative share of GDP,
Thus we see that at the turn of the 20th century one would have needed twenty to a couple of hundred times fewer modern US dollars than one does today, to qualify as a millionaire (in the US).

Multimillionaire

Another commonly used term is Multimillionaire. As the term implies, multimillionaire applies to those individuals residing in households with a net worth or wealth of 10 million or more units of currency. Only a small minority of households are indeed multimillionaire households. The term also has a more prestigious connotation than millionaire.
Roughly 1.0% of high net worth individuals (HNWIs) can also correctly be identified as ultra-high-net-worth individuals (ultra-HNWIs), those who reside in households with a net worth or wealth of $30 million or more. There are approximately 95,000 ultra-HNWIs in the world with 61,600 or 64.8% residing in the United States and Europe.

Number of millionaires in the world

The "World Wealth Report" is a report on individuals with a net worth of at least $1 million in all assets except their "primary residence". The report is compiled annually by Capgemini for Merrill Lynch.
World Wealth Report 2007 - "The 11th annual World Wealth Report from Merrill Lynch/Capgemini finds the World’s High Net Worth (HNW) population growing to 9.5 million with their assets rising to $37.2 trillion."
Some growth in international wealth and the number of high net worth individuals can be attributed to the weakness of the US dollar, as stated in the report.
  • Ultra-HNWIs (Ultra-HNWIs Account for 1.0% of All HNWIs) (more than $30 million, in 2006)
Scotland has more female millionaires than male.

United States

There is a wide disparity in the estimates of the number of millionaires residing currently in the United States. According to TNS Financial Services, as reported by CNN money, 8.9 million households in the US alone had a net worth of at least $1 million excluding primary residences in 2005. According to TNS, the number of millionnaire US households is now 9.3 million, with an increase of half a million since 2005. Millionaire households thus constituted roughly seven percent of all American households. The study also found that half of all millionaire households in the US were headed by retirees. Another finding was a record "33 percent increase over the 6.2 million households that met that criteria in 2003," fueled largely by the country's real estate boom.
A report by Capgemini for Merrill Lynch on the other hand stated that there are approximately 2,900,000 households in North America whose net worth exceeds 1 million US dollars (which include "private equity holdings stated at book value, ...publicly quoted equities, bonds, funds and cash deposits.. offshore investments are theoretically accounted for, but only insofar as countries are able to make accurate estimates.." as well as real estate not used for primary residences) (p. 30)).
According to ABC News, Los Angeles County has the highest number of millionaires at 262,800 households, followed closely by Orange County, California, Cook County, Illinois and Maricopa County, Arizona.

Criticism

According to Mr. Ivan Simic political analyst and economist, current definition for a millionaire is wrong. In his essay “What Should Be a Definition for a Millionaire?” he wrote that term “one million units of any currency” cannot be used in practice and that companies like Merrill Lynch and Capgemini are giving the wrong picture of who is being a millionaire and a billionaire in the world, since they use the US Dollar as a model for their counting.
He further explains that there is no definition or internationally recognized model for the US Dollar being currency for indentifying (counting) the world's or individuals wealth, also, that the US Dollar has been “de facto” world currency, however for the past few years the US Dollar share in foreign reserves holdings is falling and the EU Euro share is rising. “Using the US Dollar as a model for counting world millionaires is not fair, since the Dollar is not strongest hard currency. On the other hand the UK Pound and the EU Euro are hard currencies, reserve currencies, and currencies with a good buying power which are widely accepted as a reliable store of value. However, they are not used as a model for counting world wealth”.
In addition he wrote that if we use current definition for a millionaire we will have more than five billion millionaires in the world, if you use the US Dollar we are getting the wrong number of millionaires. He wrote: “individuals who have EU€800,000.00 are not counted as millionaires in their country, nobody, including beneficiary bank does not recognize these individuals as millionaires, but if we exchange this amount for the US Dollars, these individuals are becoming millionaires”.
As a result he suggested new definition for a millionaire:
''“A millionaire is an individual whose net worth of wealth exceeds a sufficient amount of units of any currency when exchanged worth one million units of the world's highest valued currency unit, or the world's highest anchor currency unit. It can also be a person who owns enough units of any currency when exchanged worth one million units of the world's highest valued currency unit, or the world's highest anchor currency unit in cash, bank accounts and savings”.''
"If one person has enough currencies to buy one million of the world's highest valued currency unit, or the world's highest anchor currency unit, than that person should be counted as a millionaire".

Entertainment

Great wealth and its consequences is a popular theme in fiction. The Millionaire was the title of a 1955 TV series about an unseen man of wealth who gave away $1,000,000 to a different person each episode, and a 1931 motion picture about a retired millionaire who buys a gas station to ease his boredom. Millionaire is also a common nickname of the international quiz show Who Wants to Be a Millionaire?, first hosted in the UK by Chris Tarrant, and later in the US by Regis Philbin and Meredith Vieira. Who Wants to Be a Super Millionaire also aired in the US, where contestants could win a total of $10,000,000. Many reality TV shows offer one million dollars as first prize.

References

millionaire in Catalan: Milionari
millionaire in German: Millionär
millionaire in Spanish: Millonario
millionaire in Esperanto: Milionulo
millionaire in Galician: Millonario
millionaire in Dutch: Miljonair
millionaire in Polish: Milioner
millionaire in Portuguese: Milionário
millionaire in Russian: Миллионер
millionaire in Swedish: Miljonär
millionaire in Yiddish: מיליאנער

Synonyms, Antonyms and Related Words

Daddy Warbucks, billionaire, bloated plutocrat, capitalist, fat cat, man of means, man of substance, man of wealth, moneybags, moneyed man, multimillionaire, nabob, parvenu, plutocrat, rich man, richling, warm man, wealthy man
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