Over 1.7 Million American Adults Dropped Their Millionaire Status in the Past Year
In a significant shift, the United States witnessed a decline in its millionaire population last year, marking the first such occurrence since 2008.
According to the annual global wealth report by UBS and Credit Suisse, nearly 1.8 million individuals in the US lost their millionaire standing in 2022, leaving a total of 22.7 million millionaires in the country.
Furthermore, the report unveiled that an additional 17,260 American adults transitioned out of the ultra-high net worth category, which designates individuals with assets valued at $100 million or more.
Parallel to this trend, the global landscape also experienced a decline in wealth for the first time since the financial crisis. Households across the world collectively witnessed a reduction of $11.3 trillion, marking a 2.4 percent decrease. UBS attributed this decline to elevated inflation rates and the depreciation of numerous currencies against the US dollar.
Remarkably, the most substantial impact was borne by affluent Americans, who suffered losses amounting to $5.9 trillion. This was in stark contrast to the previous year, which had witnessed gains totaling $15.9 trillion, highlighting the substantial turmoil faced by stocks and bonds.
America Lost The Most Millioniares
Among those who experienced a drop in millionaire status during 2022, approximately 51 percent were identified as Americans, as outlined by the report.
Notwithstanding this trend, the United States maintains its global lead in terms of the quantity of millionaires, constituting around 38.2 percent of the worldwide aggregate.
The reduction in wealth observed in the past year was primarily concentrated among the most affluent individuals in the most prosperous nations. UBS highlighted that this decline was not limited to the US but also extended to countries such as Australia, Canada, China, Japan, and the UK.
On average, Americans saw a decrease of about $27,700 in their wealth during the preceding year, as indicated by the report.
The report noted, “The remarkable expansion of wealth in 2021, driven in part by robust stock markets, resulted in substantial wealth augmentations in various economies. The stock market setbacks experienced in 2022 often countered, at least partially, the gains attained in the previous year.”
Notwithstanding this, the United States maintains its global supremacy in terms of the count of millionaires, constituting a substantial 38.2 percent of the total across the world.
The preceding year’s reductions in overall wealth were notably concentrated among the most affluent individuals in the most prosperous nations, a point emphasized by UBS. This phenomenon of wealth decline was also evident in other nations including Australia, Canada, China, Japan, and the UK.
On average, Americans experienced an approximate loss of $27,700 in wealth during the previous year, according to findings from the report.
The report stated, “The extraordinary surge in wealth during 2021, driven partly by robust stock markets, yielded significant wealth expansions across numerous economies. The setbacks encountered in the stock market in 2022 frequently mitigated, to some extent, the gains achieved the preceding year.”
Americans Feel Poor
Coinciding with this, a distinct survey has brought to light that a quarter of affluent Americans characterize themselves as either ‘very poor’ or ‘poor,’ even though their earnings surpass $175,000.
This income level should theoretically position these individuals within the upper echelons of the top 10 percent of US tax filers, yet a noteworthy 25 percent expressed a sentiment of merely ‘scraping by.’
In addition, half of the respondents labeled themselves as ‘comfortable,’ refraining from designations such as ‘rich’ or ‘very rich.’ These insights emerged from a Bloomberg survey that encompassed over 1,000 Americans with salaries at this range.
These revelations unveil the impact of inflation and heightened interest rates on the country’s most affluent population.
With inflation in the US rising to a 3.2 percent annual rate – a slight increase from June’s 3 percent – the expenses tied to essential necessities such as automobiles, housing, and groceries remain stubbornly elevated.
Worrying About Money
Slightly more than half of the participants indicated concerns about their financial situation, with a notable 25 percent expressing doubts about surpassing their parents’ financial status, according to the survey.
The study further revealed that a significant portion of affluent Americans contemplated relocating to different regions within the country. This trend mirrors the pandemic-driven movement away from costly urban centers to locales featuring a more budget-friendly cost of living and reduced tax burdens.
In accordance with data from the Census Bureau, the average annual income in the US stands at $75,203.
Surprisingly, Bloomberg’s findings disclose that a majority of respondents possessing a net worth of $500,000 or more still perceived themselves as ‘making ends meet,’ while even certain millionaires regarded themselves as ‘financially strained.’
In the most “mo money mo problems” part of the findings, a subset of Americans with net worth surpassing $5 million still characterized themselves as ‘very poor,’ ‘poor,’ or ‘just getting by.’ Sigh.