To me the term “6-figure” meant something more like an order of magnitude (10X) higher than what average people made; basically unattainable unless you had a very good education, were a genius, or had some sort of connections.
So my dad right before he retired was making $16/hour, and at his best earned around $37K per year. My mom eventually worked her way into an office job, though only had a high school education. She might have managed $9-10 an hour, not quite full-time hours; $20K would have been a good year. This was in the 70s-90s. To us, most people made in the tens of thousands per year; somewhere between 15K and 45K generally. We were jealous of my soccer coach (fancy welder) and his wife (registered nurse) who combined made over $75K.
Someone in the 6-figure range added a zero to a normal person’s wage. I think that’s still largely true today, though some “normal” jobs do actually break into the low 6-figures (100-200K).
I think a widespread (not necessarily the most widespread) definition of “millionaire” says that the person’s primary residence does not count as an asset for the purposes of meeting the $1m net assets threshold. If it did, then a large percentage of the American population would qualify as millionaires.
I think more than twenty million would be necessary to allow someone to live large like a millionaire in an old movie; perhaps fifty or a hundred million?
Well, you can, of course, disagree. I think this modification of the definition is intended to preserve the cachet of the word, by limiting the number of people who meet the criterion. Another consideration is the idea that the house you live in is not something you can freely liquidate, because you need to live somewhere. If those are not convincing points to you, then you can give the word any other definition you like.
I don’t have statistics about the percentage of Americans who have a mortgage-free home worth > $1m (or a non-mortgage-free one, but with other assets to push them beyond the threshold). This 2019 press release announces a study which supposedly found that the number of U.S: households with net assets between $1m and $5m was 10.23 million, even under the “not including primary residence” criterion. I find that hard to believe, though.
If you’re asking me simply where I draw the line of what a “large percentage” is, I’d say at 10 %. It doesn’t sound like much, but keep in mind that this number means that most people, even those who belong to the 90 % that don’t make the cut, would personally know people who do.
No. It may depend where you live, but $5m is plenty enough to be independently wealthy, live luxuriously, with no need to ever worry you’ll run out of money (barring the randomness of poor investment).
It’s easy to get a skewed view of what people earn based on what you’re surrounded by. If you are attending Wharton Business School or any top tier MBA or law program where everyone is planning their careers in investment banking, management consulting, law, tech or other industries where recent grads start in the low 100,000s and there are paths to incomes of seven figures or more, one might assume that’s what most people earn.
Heck, even working in New York City, I struggle to figure out where do people with non-six figure incomes live that’s not oppressively far from the city?
Five million isn’t enough to be old-time movie rich. If you live on a conservative two percent, that’s only an income of $100,000. (Which neatly returns us to the subject of the thread.)
I was thinking of how old movies portrayed millionaires. Like Nick and Nora Charles of The Thin Man or Tracy Lord of The Philadelphia Story. The men are always in tuxedos or tails, the women in gowns with lots of jewels and they’re always going to the opera or the symphony. OK, I realize no one lives like that any longer but still.
There is the literal definition of one million dollars, and then there is the figurative amount of wealth that a million bucks brought whenever we started using the term “millionaire”.
Given that the term “millionaire” seems to have started gaining currency in the early-mid 1800’s, I don’t think it’s an overstatement to say that today’s billionaires are on the footing that yesteryear’s millionaires used to be. Mark Zuckerberg would have been a millionaire in the Gilded Age, so the term has really become a lot more diluted than most of us consider.
True. But most working class people today would still consider a person with a million in liquid assets to be in another league financially.
When people in 2022 use the term ‘millionaire’, they’re not likely thinking about what it meant in the 1840s, but rather, that neighbor down the street who owns expensive cars and boats. That’s more than working-class people have, but it doesn’t require J.J Astor-percentile wealth.
That’s certainly true. I was thinking more of a hypothetical case of someone who could afford to own such things outright. Someone who wins a million in the lottery.
For me, the best indicator of the loss of cachet of the words “a million dollars” (in the sense of “an awful lot of money, more than an ordinary person would ever come into contact which”) is house prices. In the old movies with cliché Rich Uncle Pennybags-style millionaires, even large and comfortable houses would sell for tens of thousands of dollars. Nowadays many “ordinary” people will handle figures within the order of magnitude of a million dollars when buying a home for themselves. So you need to up the ante if you want to express a figure that has the same connotations that “a million dollars” had in the old movies.
This clip from a couple of years ago has Americans literally distribute pieces of pie according to how they think wealth is distributed in America. Most grossly underestimate how much wealth the rich have and how little everyone else has.
A few years ago, sorry, no cite, a survey suggested that a lot of Americans (apologies for the technical jargon) believed that their economic problems could more or less be solved if they were given $100,000.
2%? Well there’s your problem! The average return of the S&P is like 10%.
Although I do recall a scene from Succession where Tom is telling Greg that $5 million “sucks” because you are kind of rich, but can’t really do anything with it.
I’m 49, and what I recall from my beginnings in the working world around 1997 was that 100k was seen as a sort of arbitrary “magic” income number that indicated that you were not only doing well, but thriving- it was enough to basically afford what you wanted, along with some status symbols- the entry level BMW, and/or own a “nice” house in a bougie suburb, etc…
However, with wage stagnation being such a thing over the past couple of decades, it doesn’t really mean that anymore. It’s still an arbitrary magic number, but now it indicates more like what 50-75k meant back then; that you were successful and doing well, but not necessarily to the degree that you would be able to afford status symbols like BMWs, etc…
It’s still a good amount of money, but it doesn’t signify the same level of wealth anymore, as its purchasing power has declined significantly.
There are going to be years where the actual return is negative I believe that’s why universities and other groups with endowment funds withdraw only two percent or so. In theory, though, the total amount should grow over time, so after a while, two percent is a lot more than earlier.
I remember reading an article about some New York money guy talking about this. He opined that the threshold to be rich in NY was being a “hundy”. Having a real net worth of >=100million. Such a person could afford a table at the Met charity gala, rent a time-share private jet, etc. Still not a rich person (ie a billionaire), but well enough off to pay attention to. Anything less than that simply isn’t in the money.
FWIW, to me a “six-figure income” implies at least $200K due to inflation. And I fully understand that the definition of the phrase can’t change. Inflation moves the goal-posts, but the plain words don’t change. Still, when I use the phrase, I implicitly account for inflation.
