Being a millionaire is overrated.
The term itself has quite a few connotations, including many that have been ingrained in us since we were children. Becoming a “millionaire” meant being set for life, and not having to worry about things like personal finances again. After all, millionaires are supposed to be destined for early retirement, right?
That was then, and this is now.
Time magazine recently estimated that for a millennial with 40 years until retirement, $1 million in savings is not likely sufficient. Taking into account 3% inflation over that time period, it would be worth just $306,000 in today’s dollars. That’s a pretty questionable nest egg for a “millionaire”.
How Much is a Million Dollars?
The infographic from Carson Wealth shows that things have changed over time, and that a million dollars of wealth ain’t what it used to be.
Fun facts: the preferred car for millionaires is actually a Ford, and the majority of millionaires envision working all the way until their retirement.
In today’s world, reaching the magical “millionaire” mark of a $1 million net worth is less meaningful than it used to be. In fact, roughly 9% of households in the United States have “millionaires” living in them – this is a record amount, caused partially through the devaluation of currency over time.
That said, there are many cities (San Francisco, Vancouver, New York, London, Melbourne, Tokyo, etc.) where even a million dollars isn’t even enough to purchase a home.
The “millionaire” case is a stark example of the erosion of a dollar’s purchasing power over time. To get a full sense, take a look at some historical numbers:
- To have the purchasing power of a millionaire from the 1900s, you would need at have nearly $30 million in today’s dollars.
- To have the same impact or influence on the economy as a millionaire from the 1900s, you’d need closer to $100 million in today’s dollars.
For more perspective on the topic, see how much money exists with this video from The Money Project:
Article by Jeff Desjardins, Visual Capitalist