More U.S. millionaires are middle-class
NEW YORK (Reuters Life!) - Sitting on a million but still middle-class? New research has found that more and more Americans worth at least $1 million want luxury goods such as yachts but otherwise lead family-focused, work-oriented lives.
Private wealth specialists Lewis Schiff and Russ Alan Prince found the number of Americans with $1 million to $10 million had risen to 8.4 million households -- or 7.6 percent of U.S. households -- and was growing at 15 percent a year.
But instead of entering the echelons of the elite, these new millionaires adhere to middle-class values, earning their money rather than inheriting it, working 70 hours a week, and choosing neighborhoods based on the quality of schools.
"These are middle class people who are in the community and don't insulate themselves but they are different because they have managed to accumulate wealth," said Schiff, the president of private wealth consultant Advanced Planning Group.
"They spend their money on all the things that tie back to family values -- on the health and welfare of their family, career development, and as you move up the ladder they spend on leisure and luxury activities."
Schiff and Prince surveyed about 3,600 people -- 600 millionaires and 3,000 middle-class people -- to research their book "The Middle Class Millionaire: The Rise of the New Rich and How they are Changing America" due out next February.
They found that 89 percent of middle-class millionaires believed anyone could attain wealth through hard work.
YACHTS, SCHOOLS, AND CARS
Middle-class millionaires are almost three times as likely as the average middle-class person to choose a career based on its likely earnings, three times as likely to belong to a networking group, and five times more likely to say they are always available for work by phone or email.
Nearly eight out of 10 -- or 77 percent -- choose their neighborhood based on the quality of the school system.
"They are much more outgoing and involved in the community than the very affluent who tend to be more insular and react with fewer people," Schiff said.
He said the four main characteristics of a millionaire were that they were hard working, networked, persistent even in the face of failure, and put themselves in the flow of money.
"You could be a hard-working, dedicated chemistry teacher but you will never create wealth in that way," he added.
The authors argue this new group has a strong influence on spending, shaping the habits of their middle class counterparts and impacting certain product sectors ranging from yachting to jewellery to handbags.
Grant Skeens, president and CEO of marine lender KeyBank Luxury Yacht Lending (LYL) said this was reflected in the demand for boats of 80 feet and above, costing about $1 million, which is growing at 15 percent a year.
"The new buyers really value leisure time as they have so little time," he told Reuters.
But with this new group of wealth buying up what were once seen as the trappings of wealth, this is also changing the spending of the super-rich.
"When you're very wealthy you look for exclusive expressions of affluence and when these are more available to a larger number of people they lose their exclusivity so they want something new and innovative," said Schiff.
"This means the top one percent has to find a new way to express their affluence and we are seeing this most commonly through technology."
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