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What constitutes becoming a millionaire?

July 29th, 2016 at 11:51 am

Now that my finances are feeling more under control than they have been since about March, I'm feeling optimistic and forward-looking. I idly wondered, when will I (well, my household) become a millionaire, and how is that technically defined?

I looked around online and the consensus seems to be that you can either be a net-worth millionaire or an actual-money millionaire. Either your net worth is at least a million, or you have at least a million in bank and retirement accounts.

By the first measure, my household could conceivably attain millionaire status in about 4 years, if things go well and we gain about $10K per month in net worth.

By the second measure, I'd think it would be more like 8 years, since the majority of our assets contributing to net worth are our two properties. So getting to a million in cash and retirement funds will take a lot more time, and debt reduction won't help with that one.

Just some idle Friday musings. Smile

9 Responses to “What constitutes becoming a millionaire?”

  1. VS_ozgirl Says:

    I think it's if you can actually attain a million at any point of time? So I'm going with a net-worth millionaire, if you hold property or properties and if you go to sell them as long as you can convert the proceeds to a million then you are a millionaire? (I could be wrong of course but this is my guess)

  2. PatientSaver Says:

    I would go with the net worth definition also because assets come in many forms, not just cash. Whether it's real estate or mutual funds, it still holds value.

    Godspeed on your way to becoming millionaires!

  3. MonkeyMama Says:

    I'm counting down to "net worth millionaire" since that's the next stop for us. We expect to get there in 10 years. From there, I am sure it would be an exciting milestone to reach $1 mil in "money". I am also not really sure if we will downsize somewhere cheaper to cash out some home equity OR if we will move back closer to our parents and buy more house (er, less house for more money). So no idea really on when that milestone may come to pass.

  4. LivingAlmostLarge Says:

    Good luck either way.

  5. scfr Says:

    This is one of those questions that emphasizes the PERSONAL in personal finance. Personally, I use net worth. I calculate my household's net worth and consider my personal net worth to be exactly half of the household's net worth. (I live in a community property state.) I like reading that you recognize the difference between household and individual net worth. So many statistics are based on household net worth, not taking in to account that household net worth figures may need to be divided by 2 or more to show individual net worth.

  6. rob62521 Says:

    I rather doubt if we will ever attain millionaire status before we die. But what a great goal. I would assume you'd use net worth.

  7. ceejay74 Says:

    Thanks for your comments! I like that net-worth is the more common measure, since that's the one that seems more attainable in the near future. Smile
    I think for me four years is "conceivable" but pretty optimistic. It would depend on the stock markets and home prices being really good to me, because there's no way I'm saving $10K per month of straight cash. Smile

  8. ceejay74 Says:

    Oh, and yeah, I don't know when or if I'll ever become an individual millionaire. The fact there are three of us pitching in makes it a lot more doable.

  9. Kellyb Says:

    I like to track both numbers as sort of a progression on the financial journey. We achieved household net worth millionaire status in 2009 - and again in 2012 after the recession/recovery. We achieved household "cash" or liquid asset millionaire status in 2014. We have 7 years to go and hope to end up with around 1.5m cash and 2m net worth at retirement, so for a brief shining moment I may get to be an individual net worth millionaire (as there are 2 of us) before we reverse gears and start spending it all down. Lol

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