Recently there has been some controversy over how to correctly determine a person's status as a millionaire. One of the two most commonly used measurements is net worth, which counts the total value of all property owned by a household minus the household's debts. According to this definition a household owning an $800k home, $50k furnishing, two cars worth $60k, a $60k IRA, $45k in mutual funds and a $325k vacation home with a $250k mortgage, $40k in car loans and $25k in credit card debt, would be worth $1,025,000 and every individual in this household would thus be a millionaire. However, according to the financial assets measurement, equity in one's principal residence is excluded. So are all other fixed assets such as the car and furniture.
While millionaires constitute only a small percentage of the population, they hold vast control over economic resources with the most powerful and prominent individuals usually ranking among them. Forbes and Fortune magazines maintain lists of people based on their net worth and are generally considered authorities on the subject. According to Forbes' latest annual list of the richest people published in 2007 there are 946 US-dollar billionaires in the world. The number of millionaires is much higher.
Multimillionaire
Another commonly used term is multimillionaire. As the term implies, multimillionaire applies to those individuals residing in households with a net worth or wealth of two million or more. Only a small minority of millionaire households are indeed multimillionaire households, yet many of the stereotypical millionaires shown in televisions programs such as "The OC" are actually multimillionaires. The term also has a more prestigious connotation than millionaire.
Roughly 0.9% of high net worth individuals (HNWIs) can also correctly be identified as ultra-high-net-worth individuals (ultra-HNWIs), those who reside in households with a net worth or wealth of 30 million or more. There are approximately 70,000 ultra-HNWIs in the world with 54,000 or 77% residing in the United States and Europe.
Number of millionaires in the world
The "World Wealth Report" is a report on individuals with a net worth of at least $1 million in all assets except their "primary residence". The report is compiled annually by Merrill Lynch and Capgemini.
The 2006 report for the year 2005 tells that "8.7 million people globally each hold more than US$1 million in financial-asset wealth, an increase of 6.5% over 2004."
The number of millionaires grew faster than the number of people in the world in 2005 (1.2%)
Some growth in international wealth and the number of high net worth individuals can be attributed to the weakness of the US dollar, as stated in the report.
- HNWIs (more than $1 million, in 2005)
- Global: 8.7 million
- Europe: 2.8
- North America: 2.9
- Asia-Pacific: 2.4
- Latin America: 0.3
- Middle East: 0.3
- Africa: 0.1
- Global: 8.7 million
- Ultra-HNWIs (Ultra-HNWIs Account for 0.9% of All HNWIs) (more than $30 million, in 2003)
- Global: 70,000
- North America: 29,000
- Europe: 25,000
- Asia-Pacific: 12,000
- Latin America: 2,000
- Middle East: 1,000
- Africa: 1,000
- Global: 70,000
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