BATMAN
09-28-2005, 12:45 PM
There are 700,000 more millionaire households this year than in 2004, according to a survey released Wednesday.
Households with a net worth of at least $1 million excluding primary residences rose 8 percent to a record high 8.9 million, according to an annual report by TNS Financial Services, a market research and polling firm.
This is the third consecutive annual increase, although this year's growth rate is far more modest than the 33 percent increase seen in 2004.
Interestingly, although the number of millionaire households grew, the averages among some of their primary investments were down.
TNS found that there were fewer millionaire households who owned investment real estate this year than last, although real estate continued to be a staple in investment portfolios for many.
And while the number of millionaire households owning individual stocks and bonds went up, the average balance in their investment portfolios went down. Likewise, those owning mutual funds also saw their account balances decline from an average of $355,000 last year to $283,000 this year.
On the plus side from a net worth perspective, these households' overall debt fell, by 8 percent, from an average of $179,000 last year to $165,000.
"There usually is never one thing that drives the (number of millionaires) up or down," said Jeanette Luhr, manager of the TNS research study. But, she noted, the millionaire households didn't grow rich overnight.
"The growth we've seen this year is largely due to measured planning and active reinvestment," Luhr said in a statement. "When asked about their investment approach over the past year, 61 percent of millionaires said their approach has changed very little, indicating they have a strategy and they are sticking to it."
That includes maintaining and monitoring a diversified portfolio, Luhr said, and also taking advantage of low interest rates to refinance and pay down debt.
The survey did not look at what tax changes millionaire households may have taken advantage of.
The total income reported among millionaire households averaged $119,000. Among those households that drew some of their income from jobs, they earned an average of $82,000 in salaries or professional fees. The average age among the heads of these households was 56, and about 75 percent of them said they felt confident they will be financially prepared for retirement.
More millionaires on the way?
The TNS study also found that the number of "emerging affluent" households is also on the rise.
TNS defines "emerging affluent" as households with a net worth between $100,000 and $500,000, excluding primary residences.
This year, they number 24.5 million, up from 23.9 million in 2004.
"More and more we are seeing financial institutions offer planning services designed specifically for the emerging market. As these households continue to take advantage of these tools, we're seeing their numbers increase," Luhr said.
The average age of the emerging affluent is 49.6, and the average total income reported is $64,600. Among those households that drew some of their income from jobs, they earned an average of $45,000 from salaries or professional fees.
Retirement confidence among these households is high: 69 percent said they felt they will be prepared for retirement.
Households with a net worth of at least $1 million excluding primary residences rose 8 percent to a record high 8.9 million, according to an annual report by TNS Financial Services, a market research and polling firm.
This is the third consecutive annual increase, although this year's growth rate is far more modest than the 33 percent increase seen in 2004.
Interestingly, although the number of millionaire households grew, the averages among some of their primary investments were down.
TNS found that there were fewer millionaire households who owned investment real estate this year than last, although real estate continued to be a staple in investment portfolios for many.
And while the number of millionaire households owning individual stocks and bonds went up, the average balance in their investment portfolios went down. Likewise, those owning mutual funds also saw their account balances decline from an average of $355,000 last year to $283,000 this year.
On the plus side from a net worth perspective, these households' overall debt fell, by 8 percent, from an average of $179,000 last year to $165,000.
"There usually is never one thing that drives the (number of millionaires) up or down," said Jeanette Luhr, manager of the TNS research study. But, she noted, the millionaire households didn't grow rich overnight.
"The growth we've seen this year is largely due to measured planning and active reinvestment," Luhr said in a statement. "When asked about their investment approach over the past year, 61 percent of millionaires said their approach has changed very little, indicating they have a strategy and they are sticking to it."
That includes maintaining and monitoring a diversified portfolio, Luhr said, and also taking advantage of low interest rates to refinance and pay down debt.
The survey did not look at what tax changes millionaire households may have taken advantage of.
The total income reported among millionaire households averaged $119,000. Among those households that drew some of their income from jobs, they earned an average of $82,000 in salaries or professional fees. The average age among the heads of these households was 56, and about 75 percent of them said they felt confident they will be financially prepared for retirement.
More millionaires on the way?
The TNS study also found that the number of "emerging affluent" households is also on the rise.
TNS defines "emerging affluent" as households with a net worth between $100,000 and $500,000, excluding primary residences.
This year, they number 24.5 million, up from 23.9 million in 2004.
"More and more we are seeing financial institutions offer planning services designed specifically for the emerging market. As these households continue to take advantage of these tools, we're seeing their numbers increase," Luhr said.
The average age of the emerging affluent is 49.6, and the average total income reported is $64,600. Among those households that drew some of their income from jobs, they earned an average of $45,000 from salaries or professional fees.
Retirement confidence among these households is high: 69 percent said they felt they will be prepared for retirement.