The number of U.S. millionaires has grown significantly, now totaling over 24 million, which represents almost one in five U.S. households, according to a Bloomberg analysis of government survey data through 2023. A remarkable one-third of these modern millionaires achieved their status since 2017, a period marked by substantial increases in home values and a booming stock market.
While the general millionaire population has surged, a separate report highlights a record number of 401(k) millionaires. Fidelity Investments saw a 19% increase in millionaire 401(k) accounts to 769,000 between the first and second quarters, marking the largest quarterly rise since the fourth quarter of 2023. This growth is largely attributed to years of consistent investing and a robust stock market performance.
Despite the significant number of millionaires, many do not fit the traditional image of extreme wealth. Economists Owen Zidar and Eric Zwick, authors of "The Everywhere Millionaire," suggest that the richest individuals are often not tech entrepreneurs or hedge fund managers, but rather owners of ordinary businesses, such as dentists with multiple practices or HVAC contractors. These "stealthy wealthy" individuals, numbering around 3 million private business owners with an average wealth of about $25 million, typically build their fortunes through long-term hard work and benefit from tax structures for "pass-through" businesses.
The stock market has been a primary driver in minting new millionaires, with the S&P 500 and Nasdaq Composite Index seeing gains of approximately 18% and 21% respectively last year. A report by Capgemini noted that the U.S. added 736,000 new millionaires last year, bringing the total to a record 8.7 million, measuring wealth by investable assets excluding primary residences. Wealthy Americans also increased their equity allocations by about 5 percentage points, from 22% to 27% of their portfolios, further boosting their net worth. The typical new millionaire is often a Gen Xer or Baby Boomer, usually crossing the millionaire threshold in their 50s or 60s, with average retirement assets reaching $1.2 million for those in their sixties.
