The number of U.S. households with a net worth of $1 million or more, excluding primary residence, set a second-consecutive record in 2005 — rising to 8.3 million, according to Spectrem Group’s “Affluent Market Insights 2006” report, released today. This gain of 800,000 net, new millionaires represents an 11% increase over the 2004 millionaire total of 7.5 million.
In the even more elite category of Ultra High Net Worth households, those with a net worth of $5 million or more, excluding primary residence, the percentage gain was substantially greater. Ultra High Net Worth households surged 26% in 2005 to a new record of 930,000.
“It’s been a great couple of years for America’s millionaires. The number of millionaire households rose to an all-time high of 8.3 million last year, up 11% from their 2004 record. Within that group, those with a net worth of $5 million or more rose to 930,000, representing a big 26% gain over 2004. Clearly, the stock market, which posted solid improvement in 2005, was one reason for the advance. However, for the wealthiest Americans it appears the increased use of international markets and alternative investments were key drivers of their improvement,” said Catherine S. McBreen, Managing Director of Spectrem Group.
In terms of the overall affluent market, which comprises households with a net worth of $500,000 or more, excluding primary residence, total membership rose to a record 14 million in 2005, up 7% from 13.1 million the year before.
On average, affluent households hold the biggest percentage of their total assets in investable assets (45%), which include stocks and bonds, managed accounts, IRAs, mutual funds, deposits and alternative investments. Of their remaining total assets, privately held businesses account for 15%, followed by the principal residence (14%), pension and defined contribution plans (11%), other real estate (9%), insurance and annuities (5%) and restricted stock (1%).