Happy Days Are Here Again

At the peak of the Internet boom in 1999 the market research firm TNS Financial Services reported that there were 7.1 million American families (about 8%) with net worth more than $1 million. After the Internet bubble burst, the millionaire households dropped steadily to 5.5 million by 2002. Then, however, the Bush tax cuts stimulated the economy and the ranks of millionaire households rose to 6.2 million in 2003 and 8.2 million in 2004.

The 2005 results were released today and the good times continue to roll. There are now 8.9 million American households (about 10%) with net worth more than $1 million, and the million bucks does not include equity in their homes or in their individual retirement accounts. Widespread American prosperity is the wonder of the financial world.

The millionaire households had an average net worth, excluding principal residence, of nearly $2.2 million, of which more than $1.4 million was in liquid assets. The survey counted some tax-deferred retirement savings but did not include individual retirement accounts in the liquid assets. Half of the heads of millionaire households were 58 or older and 45 percent were retired.

It is interesting and instructive to look at the distribution of wealth around the country. More millionaires live in California than anywhere else in the United States. Los Angeles County, home to 262,800 millionaires, is the jewel in the crown of the country's personal fortunes.

Two other SoCal counties rank in third and fifth place respectively on the list, boasting 113,299 millionaires in Orange County and 100,030 in San Diego County. Up North, Santa Clara County is home to a further 75,371 millionaires, according to the survey. The four California Counties add up to 551 thousand millionaire families, and that does not include such famously rich Counties such as Marin and San Francisco.

Elsewhere, the second richest region of America after Los Angeles is Cook County, Illinois with 167,873 millionaires. Others in the top ten are Maricopa County, Arizona with 106,210; Harris County, Texas (96,593); Nassau, New York (78,816); Palm Beach, Florida (69,871); and Middlesex, Mass. (67,552).

Over 50 percent of the millionaires surveyed said they had become more conservative in their investment approach over the past year. Still, seventy percent of the households owned stocks and bonds, and 68 percent owned mutual funds. Generally, their wealth is the result of long-term accumulation.

The lefty response to such good news is the usual canard about the rich getting richer at the expense of the poor. Of course, that is economic nonsense. Even the poor in America are doing better than ever before, and the ranks of the poor are decreasing. The latest US Census bureau report that takes government handouts into account in calculating income finds that the poor currently number only 5% of the people in America.

There are now twice as many millionaire families as poor families. What a country!