How Many People Have More Than $3,000,000 in Wealth? (2024)

You may already know the Census Bureau data shows there are 115,610,216 households in the United States and, that, as per the Federal Reserve data, roughly 1 out of every 5 of these households earns $100,000 or more per year; that 1 out of every 25 of them has a net worth of $1,000,000 or more. What about substantial wealth excluding houses, cars, furniture, jewelry … actual investment portfolios stuffed with cash, stocks, bonds, mutual funds, real estate investment trusts, master limited partnerships, tax-lien certificates, or any of the other numerous securities one can own to compound capital?

Some of thebest data I can find indicates thereare 1,821,745 households thathave investmentportfolios valued at$3,000,000 or more¹. This means roughly 1 out of every 63+ households. This group contains:

• 893,344 households with $3,000,000 to $5,000,000
• 679,242 households with $5,000,000 to $10,000,000, and
• 249,159 households with $10,000,000+

When the nation’s largest trust company, U.S. Trust, went to study those who make the rankings in an annual publication calledInsights on Wealth and Worth [PDFor website], it found that the “vast majority (94%) … say they have a clear purpose in life. Three-quarters (75%) agree that their life’s purpose would not change even if they were to lose their wealth”. As a whole, the group is obsessed with maintaining good health – looking at other data sets, this makes sense given those in the group, relative to the general population, arefar less likely to smoke, drink in excess, be overweight, or have children out of wedlock. A disproportionate percentage of the list either owned their own business or worked as a corporate executive, but this isn’t a surprise if you’ve examined the Federal Reserve data; business owners, as a class, have net worth figures that are many, many, many times the rest of the population as a good operator is able to create value not only from the profit component but the capitalized value of those profits when and if he or she goes to sell the business. (There’s a degree of self-selection here because if you are not talented enough to run a business, you fail and lose everything, removing you from the data pool. And a lot do fail, thoughthere are some problems with the headline figures people repeat without thinking.)

Guess what else? As per all of the other data I’ve ever seen, stealth wealth rules the day. Barely more than1 out of 3 households have fully disclosed their wealth to their children; the kids and grandchildren have no idea how rich the investors have made themselves. Specifically:

• 17 out of 100 have offered no disclosure at all,
• 47 out of 100 have offered only a little bit of disclosure, and
• 36 out of 100 have provided full disclosure.

That’s a whole lot of people who have no idea they are going to be on the receiving end of a boatload of wealth, provided charity doesn’t get it. The United States of America is full of people like Phyllis Stone, wearing frumpy house dresses, driving beat-up Chevy Cavaliers, and living in normal houses as their tens of thousands of shares of Exxon Mobil pump out six-figures in annual dividend income or, in some cases, successful executives and doctors who have no doubt done well, but haven’t let onhow well.

When U.S. Trust asked its sample group the reasons they were so secretive about their money,:

• 34 out of 100 said, “I am concerned it will negatively impact their work ethic”
• 20 out of 100 said, “I was taught never to discuss wealth”
• 19 out of 100 said, “I am concerned they will discuss it publicly outside the family”
• 17 out of 100 said, “My child/ren aren’t mature enough to handle it”
• 15 out of 100 said, “I never thought about it”
• 5 out of 100 said, “My child/ren aren’t old enuogh”
• 6 out of 100 said, “I don’t know how to bring it up”

Perhaps, then, it isn’t surprising that the Williams Group wealth consultancy found that a whopping 70 out of 100 wealthy families will lose their wealth by the second generation and an almost unbelievable 90 out of 100 will have dissipated it by the third generation. One of the consequences of this winner-take-all meritocracy that has been unleashed by the rise of the microchip and globalization increasing productivity is what others have called the “high beta rich”; that we are now a nation of the self-made, with inheritance and “old money” becoming less and less important than it has ever been at any time in the history of not just the United States but of human civilization. Even the Forbes 400 list of the richest Americans hit an all-time high for the percentage of billionaires who are self-made, whereas when the list was first compiled decades ago in the 1980’s, it was mostly aristocratic families like the Rockefellers and DuPonts. The blue bloods are dead. Long live the entrepreneurs.

Most of the data I’ve seen roughly approximates the breakdown on this Forbes page … around 70% of assets are accumulated in the current generation through business ownership, 25% are generated from high-income occupations, such as becoming a doctor, and 5% originates from inheritance. If you ever hear someone talking about how the rich in America are that way because of the silver spoon they were given at birth, know that you’re listening to someone who is living in a fantasy world. It hasn’t been true for decades. That economy is dead and gone.

The representative sample also held significantlyhigher cash reservesthan typical investors:

• 8 out of 100 held 50% or more of their portfolios in cash
• 14 out of 100 held 25% to 50% of their portfolios in cash
• 40 out of 100 held 10% to 24% of their portfolios in cash
• 38 out of 100 held less than 10% of their portfolios in cash

The last group isn’t much of a surprise because there’s some research I’ve been reading lately indicating that there are a lot of high net worth individuals living paycheck to paycheck in the United Statesdue to apropensity to over invest. Though not a perfect overlap in demographic, the paper I’m currently reading, written by Greg Kaplan at Princeton University, Giovanni L. Violante at New York University, and Justin Weidner at Princeton University, deals with it. It’s calledThe Wealthy Hand-to-Mouth[PDF].

Footnotes
¹In its 2015Insights on Wealth and Worth [also available in Executive Summary PDF], U.S. Trustlooks at data fromCerulli Associates, Cerulli Lodestar – Retail Investor Subscription, 2013 and uses it to paint a picture of America’s rich, from which it drew for a study sample. You can order the recently released 06/25/2015 edition if you want slightly updated figures, but it’s going to cost you $17,000.