US boosts millionaire ranks, especially ultra-rich

US boosts millionaire ranks, especially ultra-rich
View of One World Trade Center (left) and the Manhattan skyline looking south from the Empire State Building in New York.

NEW YORK - The richest Americans are increasing their ranks and putting the recession of 2008 and 2009 behind them, according to an annual study by the Chicago-based Spectrem Group.

Total millionaire households in the United States jumped to more than 9.6 million according to Spectrem, an increase of more than 600,000 over the previous year. That is the highest level since the research group started measuring in 2004.

Those who have more than US$5 million (S$6.3 million) grew to 1.24 million. The 2014 Affluent Market Insights Report aggregates monthly surveys by Spectrem that reach more than 12,000 investors in total.

The richest of these rich, or ultra-rich, who have more than US$25 million in investable assets (not including a primary residence), increased by 57 per cent through the end of 2013, and now number 132,000, up from 84,000 in 2008.

These people tend to be senior corporate executives, doctors, lawyers and entrepreneurs, said George Walper, president of Spectrem Group, adding that they are often significant job creators. The Boston Consulting Group previously calculated this segment (net worth from US$20 million to US$100 million) as controlling about $7.5 trillion in assets.

The ever-expanding critical mass of America's rich is significant when you "consider the amount of wealth they influence in the country," Walper said.

AGGRESSIVE MILLIONAIRES

Assets that are invested in equities are making more Americans rich. In 2013, mass affluent clients, who have from US$100,000 to US$1 million, had 20 per cent of their portfolios in low-yielding bank deposit products, while the ultra high net worth segment had only 11 per cent in cash.

Of those surveyed, 60 per cent of rich households planned to invest more in equities during the next 12 months, compared with only 31 per cent among the mass affluent.

That supports data from the 2013 Fidelity Millionaire Outlook, published by Fidelity Investments. Fidelity found that high net worth individuals prefer to keep their holdings in the market, rather than in cash. Among those with more than US$5 million, 10 per cent planned to decrease their cash holdings, according to the Fidelity report.

The ultra-rich took advantage of not having to cash out of their investments during the recession. In fact, they invested during dips in the market and rode it up during in the last two years, said Spectrem's Walper.

The mass affluent, on the other hand, pulled back.

While the mass affluent typically consist of dual-income, professional families, they have hefty financial obligations like college tuition and housing expenses. "They were stressed the most, and have not recovered as quickly as the higher end,"Walper said.

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