Does owning a $1.5 million dollar home (outright) make you a “ millionaire” in the US?
Posted by Christymapper71@reddit | AskAnAmerican | View on Reddit | 387 comments
Or does it have to be at least a $1 million of realized gains, like cash?
I_am_Hambone@reddit
Yes. Equity is part of net worth.
Word2DWise@reddit
You could have a 1.5M house fully paid off and still be negative net worth, thus not be broke.
Sharden3@reddit
So... your supposition is that someone has a 1.5m fully paid off house and then also... MORE than 1.5 million in debt? Seems unlikely.
ash_274@reddit
You’d be surprised
CPA_Lady@reddit
Could. A lot of people leverage the equity in their homes because they’re sure they can successfully run a small business. Most can’t, of course.
Sharden3@reddit
Your house isn't really considered paid off if you owe debt against it, second mortgages n shit.
CPA_Lady@reddit
Depends on whether the equity is put up as collateral. That’s a lien again the house but the debt is not a mortgage against the house. Either way, doesn’t really matter. Total net worth is the fair value of assets minus any and all liabilities.
nwbrown@reddit
In that case you have much bigger issues.
harrythealien69@reddit
Much smaller issues than the huge part of the population that has a negative net worth and no 1.5 million dollar house fully paid off
tacosandsunscreen@reddit
With housing prices, surely many people have negative net worth, right? Truly asking as I’ve never looked into it. But with a $1M mortgage, I sure wouldn’t have positive net worth.
CrownStarr@reddit
If you’re referring to people who do manage to buy their home, then no, not unless/until the housing market crashes and home values go down. The whole problem is that home values have been skyrocketing since the pandemic. If you buy a house worth $1.5M and put down $100k cash so that you have a $1.4M mortgage, you may well be what we call “house poor”, meaning so much of your income goes towards your housing that you don’t have much left over for spending on whatever you want. But you probably still have a positive net worth, meaning assets (home value, car, savings, retirement accounts) are greater than debts (mortgage, car loan, credit card debt, etc).
However if the housing market crashes and now your house is only worth $800K, that doesn’t affect your mortgage. The bank loaned you $1.4M, you still have to pay off that $1.4M (plus interest). That’s called being “underwater” on your mortgage (owing more money than you can sell the property for) and is a fast track to negative net worth.
MissionFever@reddit
If you have a $1M mortgage, your assets presumably include a house that is worth at least $1M.
Word2DWise@reddit
Yeah but a mortgage is debt, not at asset. Your equity would be the asset, which would be less than the 1M if you still have a mortgage.
iloveyourforeskin@reddit
No, the entire home value is the asset and the mortgage is the debt. The final "credit" to your net worth then is equal to the equity.
EulerIdentity@reddit
You could also have a $1.5 million dollar house but very little cash so you can’t afford home insurance, maintenance, and property taxes. You have a great net worth but you’re not in a great financial position.
Remote_Ocelot9600@reddit
Yes, in rural towns this is common. People inherited houses but have minimum wage jobs. After utilities and other bills, not enough for major repairs to the home, and minor ones get ignored.
MuchDevelopment7084@reddit
Don't forget about that 800k mortgage; and it's negative impact on your net worth.
EdBasqueMaster@reddit
You seem to have missed the part where they said paid outright.
Christymapper71@reddit (OP)
That’s true. But we have no debt
PhilTheThrill1808@reddit
So this question was just to flex your house? Cool…
coffeecircus@reddit
I feel “house poor”
InuitOverIt@reddit
If you own your house outright you aren't house poor because you aren't paying mortgage. House poor means you have a big expensive house, but the cost of it makes you poor otherwise.
Adventurous-Depth984@reddit
It didn’t used to mean that. Back in my day, “house poor” was when you first bought your property and were maximally extended, plus, any spare money you could free up went into the house.
So you had no money (poor), but it was all for the house, which would eventually be worth it.
CrownStarr@reddit
That’s what it still means.
marbanasin@reddit
Equity takes debt out of it. So in OP (or your) scenario if you own a $1.5M hole but still owe $900k on it you aren't necessarily a millionaire..
Congrats on owning in Cali though. I miss living there so much.
anonsharksfan@reddit
Whenever something comes up about millionaires here in the Bay Area, my parents (who are not wealthy) have to remind me they're technically millionaires just because the land is worth so much.
RichPokeScalper@reddit
Ya. And they have the option to liquidate it and live very well somewhere else. There is no gotcha here.
Due-Mountain-8716@reddit
Well if they move and liquidate their assets, they are at least moderately wealthy.
A millionaire in a bumfuck place goes a lonnnnnnnnnnng way
Remote_Ocelot9600@reddit
Depends where. My cousin lives in a poor place in Mississippi. A million dollars could get him far more house and land than I can get in LA. Much more. But... A lawnmower still costs the same. A car costs the same. Most things cost the same regardless of where you are. And those poor places, not much opportunity to make money.
kibbeuneom@reddit
The opportunity thing is the real kicker. I live in an area that was surprisingly below national average COL for decades, but now it's starting to change and COL is above national average and continuing to climb. I'd like to move somewhere with a lower COL but... What would I even do there?
Remote_Ocelot9600@reddit
There is good and bad in every place.
When I visit my cousin, I'm amazed at the people I talk to. Fry cooks at diners, bakers at donut shops, cashiers at Dollar general. And they all have stay at home spouses and kids. A dream most college graduates in LA can't have.
But...downside is, they don't have the income or disposable money that someone in LA has. Doordash, very common here. Out there, most will simply say "yeah, can't afford to eat out unless once a month'
is5416@reddit
When the spouse can’t make enough to pay for childcare, it’s cheaper or break even to have a stay at home parent. A lot of lower income families fall into that area.
Remote_Ocelot9600@reddit
Can't just say childcare. Also the food stamps, Medicaid, possible help with clothes, utilities, list goes on. If it's a rural area or one partner has no real education, no reason to work.
tacosandsunscreen@reddit
Yeah “normal” is so very relative. I grew up and still live in poor, rural Appalachia. My parents both had good jobs, so we did just fine. We’re not rich, even by local standards, but many are worse off. I’m mostly happy here and I have a good life. College education, own my own house with some land, and travel internationally once a year. And then I’ll be scrolling Reddit and see a video showcasing “rural poverty in America” and it’s just someone driving down a backroad past houses that look like they could be right down road from me. And it’s confusing because I don’t consider this poverty living…but I also have never used DoorDash in my entire life.
Remote_Ocelot9600@reddit
Hard to say what is worse. The person making low wage and has limited budget for anything, but owns their home and provides for their family. Or the person making more, able to afford eating out, but will never afford a house or able to support a family.
Ceorl_Lounge@reddit
Both reflect choices and fulfill different needs in life. I love SoCal so much, but know I would never have had the life I do in Michigan (re: house, family, etc.). Made my peace with it years ago, hope other folks find a way to do that too.
MostlyBrine@reddit
Probably the worse case is somebody who makes enough money to afford a decent house, decent car, good schools for kids, good healthcare and everything else, however it cannot control the financial part and keep blowing the money without being able to tell you where the money goes. The kind of person that is always late paying rent or utilities, while making well over the area average.
haberv@reddit
I’m sorry but most things don’t cost the same. Service techs, fuel, energy and especially used items and even cars are cheaper. Food is cheaper but the reason is you don’t have access to high end things at Dollar General. Have a hunting club in MS since 2003 and lease 1000 acres with a house and it is $2k a year. Add a zero or two for a similar one in Cali. Also, have a guy that cuts the grass for $15/hr. Minimum in other areas I have lived is about $40+/hr.
There are plenty of ways to make money but you better have it first.
ParryLimeade@reddit
I’m in the twin cities and a million could get you a mansion here plus there are many many jobs making decent amounts.
Fappy_as_a_Clam@reddit
A million would buy an estate around.
10 acres and really nice house, or 20 acres and a nice house.
smapdiagesix@reddit
They are wealthy. They're just surrounded by lots of even wealthier people so they feel unremarkable.
Eric848448@reddit
Which is true. They can’t spend that money unless they move to a place where they wouldn’t have nearly the economic opportunity.
chirop1@reddit
That’s not what house poor means.
Being house poor means spending so much of your income on housing costs—including the mortgage, property taxes, homeowners insurance, and maintenance—that you have little money left for other essentials, savings, or leisure.
DrNinjaPandaManEsq@reddit
I’ve also heard it used to refer to someone having the huge majority of their net worth tied up in a house (i.e. $250k equity and $5k cash), but I suppose that’s kinda just the end result of the income situation you described.
thewineyourewith@reddit
The post says the house is paid off.
ZergvProtoss@reddit
OP said "owning a 1.5 million dollar home", not "having 1.5 million dollars in equity". You can own a $1.5 million dollar home with a $1,425,000 mortgage and your net worth is $75k. That's not a millionaire.
ExtraBitter99@reddit
Then you don't own the house
ZergvProtoss@reddit
Yikes. Are you serious? How can you really function financially if you don't understand the concept of ownership? The source of your funds is irrelevant to the concept of ownership. The bank loaned you the money to purchase the house. Your name is on the purchase contract and the deed. You own the house. The terms of the loan allowed the bank to place a lien on the property so they can foreclose on it if you don't pay. That in no way diminishes the fact that you are the full and legal owner.
ExtraBitter99@reddit
So, if you do not pay the loan, what happens?
Foreclosure and removal.
It;s the bank's house, dummy.
I_am_Hambone@reddit
OP said "owning a $1.5 million dollar home (outright)". You missed a word that implies no mortgage.
ZergvProtoss@reddit
Yeah, I guess I didn't think that was clear enough. Some people don't understand that they "own" a home, even if the bank has a lien on it. But, okay. Still, the OP didn't say anything about the rest of the hypothetical finances. So, owning a $1.5M home with no mortgage while also having an unrelated debt of $2M with no other assets makes them broke, not a millionaire. So it's impossible to answer the question from the information given.
Optimal_Shirt6637@reddit
You’d have to outright own it though right? No mortgage?
ExtraBitter99@reddit
Yeah. If 50% of the mortgage is paid you would say "I own half of my house." That is value.
MissionFever@reddit
You don't have to outright own the house for its value to count on the positive side of your asset sheet.
If your house is worth $1.5MM, but you still owe $500k on the mortgage, then, congratulations, you're a millionaire. (Assuming all other assets and debts wash.)
juanzy@reddit
Said it plenty of times on Reddit- a healthy retirement account and home ownership makes you a millionaire in 2026 dollars.
davideogameman@reddit
True. But you could own it with debt. So unless you've paid off 2/3 of the mortgage it wouldn't be $1m in equity.
trugrav@reddit
Yeah, but in that case you don’t own it, the bank does. Saying you own it implies there isn’t a mortgage.
BoomerSoonerFUT@reddit
That’s completely false.
You own the property even with a mortgage. The bank just has a lien on the property, meaning they can foreclose on it if you don’t pay, and they have first rights to any proceeds to pay off outstanding debt in the event that you sell it.
You are the owner. You get to make decisions about the property. You are responsible for any and all maintenance and repairs. You are responsible for paying the property taxes.
trugrav@reddit
So, In my state (and about half of states) the bank in fact does hold title to the house until the loan is paid off, which is also how I learned it in law school.
Because of all the downvotes I now know there is a jurisdictional split and the other half of states have moved to viewing mortgages like any other lien on the house.
BoomerSoonerFUT@reddit
The bank is NEVER on the deed to the house. At least in the United States.
They will have a separate deed of trust showing the lien until the mortgage is paid and the lien released.
I live in one of those states. If you go to the country recorders website and look at my property, the sole owners listed are me and my wife.
commradd1@reddit
I own my car. I have 15 payments left. The bank owns fifteen payments worth, i own the rest.
MillionDollarCzech@reddit
If you have payments left, you don’t have the title, hence you don’t own your car.
commradd1@reddit
I live in NY. I have the title. That’s how it works here
MillionDollarCzech@reddit
Yeah, I got off somewhere and thought your initial comment was in response to a different comment about owning outright; that’s my bad.
Out of curiosity sake, does your title have the lenders name on it, too? In KS, you can’t get physical possession of the title until you pay off the loan. In NE, they had the lender on there and wouldn’t remove it until the loan was paid off.
o93mink@reddit
I very much have the title to my car, it notes that there is a lien against it.
Repulsive_Client_325@reddit
That’s not how it works for personal property.
Megalocerus@reddit
Bank owns the right to be paid on its loan. That's not owning the house. You own the house, but you subtract debt from assets in calculating net worth.
trugrav@reddit
So, I’m an attorney and I was absolutely sure you wrong until I looked it up. Like many things, apparently it just depends on your jurisdiction.
In my state, the bank actually holds title to the home until the loan is paid off and the loanee holds what we call “equitable title”.
Repulsive_Client_325@reddit
That’s wild. What state is that? Canadian lawyer here.
tewmtoo@reddit
The post states owning it outright. Outright to me means no debts but I could be wrong.
OrthodoxAnarchoMom@reddit
No it means no mortgage on the house. You could have $1 mil student loans and $700,000 credit card debt.
TellTaleTimeLord@reddit
If you have $700k in credit card debt then you may as well just throw in the towel, because its over
tewmtoo@reddit
I meant debt in regards to the house. Like the thread and post is about...
davideogameman@reddit
I do not recall that "outright" being there earlier... Perhaps it was edited in?
jetf@reddit
youre right
TellTaleTimeLord@reddit
outright
I_am_Hambone@reddit
OP said own outright, I assume they mean no mortgage.
Christymapper71@reddit (OP)
Correct. 100% equity in home. No mortgages or other liens
Mysterious-Tie7039@reddit
Only if you have $1m of equity.
Interesting-Run-6866@reddit
If your assets minus debts are greater than or equal to a million, you are a millionaire anywhere in the world.
CPA_Lady@reddit
Which isn’t a lot of money in the grand scheme of things.
rollem@reddit
It makes you wealthier than 98.4% of people in the world https://www.visualcapitalist.com/the-global-distribution-of-wealth-shown-in-one-pyramid/
Vyckerz@reddit
Sure, but like even if you have an upper middle class lifestyle as someone in your 50-60 yrs currently and you only have 1 million in the bank to live on for the rest of your life. You’re going to have to cut back quite a bit.
I know people who worked factory jobs their whole lives and ended up with 1 million or two in savings. They lived frugally.
Compared to some people across the world that’s an unheard of amount of money but if you live in a western society, it’s not as much as you would think relatively speaking.
You’re not gonna live a luxury lifestyle
jigokubi@reddit
Ignoring inflation, I could live a hundred years on a million. Except actually it's more, because I could live on the interest and save much more than I spend.
PriorSecurity9784@reddit
Not in the US/Europe.
$1,000,000 over 100 years is $10,000/year.
Even in low cost US cities it is hard to find a place to live for US $1000/month
Retirement calculators often use 4% of assets as a rule of thumb for retirement. That is, if you have $1mm you can withdraw 4% a year ($40,000) pretty much indefinitely if you invest it in equities at an average of 7-8%, and lose 2-3%/year for inflation.
For the original question, I think yes, it’s makes you a millionaire, but no it doesn’t necessarily create the lifestyle most people imagine for a millionaire. If that’s all of your assets, then day 1 you need to borrow money to buy groceries or pay for expenses (taxes, insurance, utilities) on a $1.5mm house
jigokubi@reddit
$10,000 a year in the US is already my life.
PriorSecurity9784@reddit
So what’s your situation? Live with parents, or I’m a cardboard box, or what?
Vyckerz@reddit
Well, you can’t ignore inflation.
You’re right you could make $1 million last but it means being very careful. Most likely not living to the standard you are living when you are working, etc.
What if investments start going south etc. there are a lot of considerations
Odd_Law8516@reddit
And when talking about the last few decades of life, you need to account for eldercare, which (at least around where I am) can be thousands of dollars a month on top of food, rent, etc. [yes there are subsidized/public facilities but they are generally wildly underresourced]. So you can't just assume you'll live frugally until the day you die. Life gets more expensive as you age, not less.
Vyckerz@reddit
That is true, but your expenses do go down as well as you age. I agree with your main point though.
Health care costs are a real concern for the elderly and can easily rise faster than any reduction in lifestyle savings. How you manage that can make a big difference in how you afford retirement.
LT256@reddit
There are 24 million millionaires in America, most live a modest lifestyle! https://engoo.com/app/daily-news/article/us-millionaires-multiply-but-most-live-modestly/5fvF8G3fEfC4GoPjHXkFSw
Vyckerz@reddit
Yes, that is very true. When I was younger, in the 1980s, I met this guy through my brother's brother in law.
He was a very low key, nice guy really. Dressed sort of preppy but his clothes were old and well worn looking. He drove an old very non-descript car.
I knew vaguely that he worked in finance or insurance or something. Turns out he was a VP in one of the bigger investment firms. Also was from old money. My brother told me he was a multi millionaire. But he was very frugal.
People who might make very decent money but spend money like water and go for big ostentatious purchases, usually don't get "rich" and those who have big windfalls (like lottery jackpots) but don't adopt discipline usually run out of money pretty quickly.
One of the wealthiest guys I know was a regular working stiff who saved a large portion of what he made from a young age, and then started investing it wisely in real estate. Very working class guy to look at him today, but made tons of money buying and renting properties/buildings.
When I first met him my company was renting a building from him. I called the property manager because we were having an issue with residential neighbors complaining about our trucks and stuff outside being unsightly.
The property manager showed up with some older guy in overalls who arrived in a pickup truck one day and we walked that side of the property. I assumed the guy was a landscape company guy.
The older guy was saying we could plant some arbor vitaes along here and that should obscure things and said he would have someone back later. So that guy showed up later with a small crew and they worked on planting those bushes. I watched the guy do some work, but mostly it was the younger guys.
Anyway later I told the property manager that the landscaper guy was a hard worker and did a good job. And he was like "what are you talking about". I sad, you know the guy that owns the landscape company that you brought over. He laughed and said "That guy isn't a landscaper. He owns your building and pretty much every commercial property in this and the surrounding towns".
FineEconomy5271@reddit
Historically, if you had $1MM, you could live on $60K/year and have a 92% chance of not running out of money, as long you are willing to curb your spending after years with bad market returns. See FiCalc
Hon3y_Badger@reddit
If you have $1M and liquid assets you can produce $40K/yr + inflation for the next 30 years comfortably. Add 1 or 2 social security checks will get you another $3-5k/month and you're in a pretty good situation. It's not a baller retirement, but it is respectable.
GroundbreakingRun186@reddit
That’s factually accurate. But the stereotype of millionaire isn’t “not baller but respectable”. So If you’re 55 and have a pair of house worth 400k and 600k in retirement, you’re a millionaire. But your aren’t, and likely never will, live the “millionaire life” which is the point the other commenter is trying to make. It’s not that $1m isn’t a lot of money, it is. But it’s not enough to live the life your instinctually think of when you hear someone is a millionaire
Vyckerz@reddit
Sure, but if it's in the stock market, there's fluctuations to worry about. If it's in a 401k you have tax considerations etc...
Even if you own your home outright, which not everyone does at retirement age, you still may have property taxes to worry about depending on what state you are in. I don't know about everyone, but my property taxes have been going up every couple of years. That is going to eat into that 40k
But yeah, my point is, you aren't going to be living completely without worry if you just have 1 million at retirement. As you say, it's not baller money.
spandexcatsuit@reddit
Luxury lifestyle isn’t the only way to have a good life
Vyckerz@reddit
I do agree with that. You just have to have the right expectations.
CrownStarr@reddit
It’s a lot of money but the word “millionaire” has persisted as shorthand for “enough money to do whatever you want”, which is far less true than fifty or a hundred years ago when the term started to become a thing. One million dollars in 1900 is something like 30 million in today’s money.
Living_Pay_8976@reddit
Ahhh so us Americans can pay off our debt if we take the whole world…
This is satire if anyone is wondering I would hope we don’t do that.
SwoleKing94@reddit
That’s how you get crazy stats like 1/5 New Yorkers are millionaires.
Rhomya@reddit
In the actual grand scheme of things, it makes you incredibly wealthy.
The vast majority of people in the world never come close to that much money.
Southern_Economy3467@reddit
When compared to ultra rich? Sure, when compared to almost everyone on the planet? It’s a fuck ton of money
kc_cyclone@reddit
No, but if you have it invested it is. I, like most, have been hitting 23%+ returns the past few years. If that was on a mil I'd be living large.
OldSarge02@reddit
It’s about context. A 65 year old retiree with a million dollar nest egg is wildly different than a millionaire 22 year old.
chongjin@reddit
Meh it’s still a lot but not necessarily set for life
Weary_Anybody3643@reddit
It depends I wouldn't consider myself a millionaire til I had 1m in liquid assets aka cash stocks retirement ect not a house but house does technically count and I would never tell someone achyuchhy your not
Obvious_Ship_7225@reddit
If you own it outright, then technically yes. Although I tend to think of it more as readily liquidated assets.
ghostwriter85@reddit
Typically, people go by net worth, so yes
Also, most millionaires even if they have $1M in easily liquidated assets (stocks, bonds) don't have $1M in cash. There are reasons to do this, but it's not particularly common. Most high net worth individuals keep a much smaller rainy day fund in cash and invest the rest.
hellojuly@reddit
Sitting on cash doesn’t make money.
Heywoood_Jablome@reddit
Sure feels good, though
theRealHobbes2@reddit
It's bbasically buying comfort. Cash in a checking or savings account 1) doesn't grow like an investment account will and 2) actually loses value over time due to iinflation.
So parking cash means you're paying the opportunity cost (the expected investment return) and paying a depreciation cost (equal to value lost to inflation) to buy the comfort of having the cash immediately there. Which is why people who have lots of money only keep a small amout in cash and the rest goes into investment accounts, etc.
Heywoood_Jablome@reddit
Thank you for explaining me to myself
theRealHobbes2@reddit
Useless commentary is basically all I do here.
SomeDetroitGuy@reddit
Yes. $1 million in assets, which for a middle class family with two working adults in their 40s or 50s means "We mostly own a house and we have been actually investing in our 401(k)."
Hotspot40324@reddit
It's an ambiguous term.
Some mean a million in annual income, some say a million net worth...
PNW_Uncle_Iroh@reddit
Yes, but there are some situations where you can’t count your primary residence as part of your net worth. For example, classification as an “accredited investor”.
Ok_Entrepreneur_8509@reddit
The real question is in what context does the label "millionaire" mean anything?
Christymapper71@reddit (OP)
That’s my interest in asking this question
theRealHobbes2@reddit
Technically it counts: anyone with Assets - Liabilities > $1M is a millionaire. But as pointed out, there are very different types of millionaires.
Two examples to illustrate the point: 1. Person 1 has a 100k income, owns a 1.5M house, has 100k in the bank/investments and 0 debt. Net worth here = 1.6M. But the majority of what they own is in their home value. This person only has about 108k of annual income: 100k in job income, about 8k (an 8% return) from 100k savings/investments.
Hope this illustrates a few things for you OP. One note, person 1 would get changes in net worth based on home value, but that will not be usable or really even realized unless they sold the home so I didn't include it here. The real question is what type of millionaire is someone?
Mediocre-Pizza-Guy@reddit
There are no rules. You can call yourself a millionaire if you want to.
The generally accepted definition is assets - liabilities...so if you have a 1.5 million dollar home, without a mortgage, you are a millionaire.
StarfleetStarbuck@reddit
I guess technically, but it’s not really what most people mean when they use the word.
shelwood46@reddit
It's definitely what I mean. If you own a million dollar house, no matter where, outright, you are indeed a millionaire.
theRealHobbes2@reddit
Net worth equation.
hnglmkrnglbrry@reddit
Because most people are wrong.
The majority of millionaires' wealth is tied up in assets like homes, businesses, and investments and not liquid cash. If you have 7 figures in liquidity then you are in the hundreds of millions of dollars range.
Curmudgy@reddit
I’d consider investments such as stocks, mutual funds, and ETFs to be liquid. They can be converted into cash relatively quickly, unlike real estate which can take months.
dark567@reddit
Kinda depends on where the stocks are.... In a restricted retirement account? Not necessarily that liquid compared to just a brokerage
vamoosedmoose@reddit
That’s not true. You can easily have seven figure liquidity and only a few million in assets
NewDestinyViewer2U@reddit
There are a lot of retired people in this exact boat. They have a large retirement account, in a few cases, seven figures. But their only real asset beyond that is the home they live in and maybe a 10yr old car
jjmac@reddit
By the definition above the retirement account is an "investment"
vamoosedmoose@reddit
When you retire you withdraw the money
JoeInMD@reddit
Not all of it, only a very small portion at a time
ZaphodG@reddit
It’s really not that liquid because it’s tax deferred money. To turn it into cash, you have to pay income tax on it. You lose around 1/3 to Federal income tax plus whatever you pay in state taxes.
Doctor_Juris@reddit
Stocks are generally considered to be liquid assets. Plenty of people have $1M+ in stocks and don’t have a net worth of $100M+.
spintool1995@reddit
It's just the term doesn't carry much weight anymore. The majority of college graduates approaching retirement are now millionaires, with home equity being a big chunk of that.
Different_Bridge_983@reddit
Right. The term was first used in English in the 1800’s when it reflected a level of wealth we’d more closely associate with today’s billionaires, and a lot of the cultural and media imagery of it in English language media was popularized around the 1950’s.
Even taking the more recent reference an “entry level” millionaire in 1950 would have a net worth of around 10-20 million today depending on calculations.
These days $1 million in home equity in a HCOL area might be a tiny dilapidated shack on a small plot of land in a desirable area…
Heywoood_Jablome@reddit
You see me
unreliable-jamoke@reddit
Virtually every federal and state employee is technically a millionaire if you factor in their pensions.
KW5625@reddit
On paper, yes.
But that wealth is not liquid, so you still have to go to work to get more to survive.
Careless_Studio_1293@reddit
Depends how much you owe on the home.
If you bought it, but you still owe more than $500K on your mortgage, you’re not a millionaire (unless you have other assets that put your net worth over a mil).
If you owe less than $500K or own it outright, then yes, you’re a millionaire.
GasmaskTed@reddit
Keep in mind that how rich a millionaire is is constantly decreasing due to inflation. Inflation since 1940 is about 1974%, so things cost about 30 times what they did then; saying someone is a millionaire meant someone at least 20x as rich as someone with $1million today. Or to look at it another way, what we count as a millionaire now would be someone with $50,000 in 1940 (or $250,000 in 1980, or $500-some thousand in 2000)
trikakeep@reddit
Only if they actually own it and it is not mortgaged. Then the bank owns it.
Hoopajoops@reddit
Well.. yeah, by definition. However, when I was growing up in the early 2000s a million dollars was basically enough to retire and live off the interest. That is no longer the case
cryptoengineer@reddit
I'm retired, have a 2-3 million net worth, 500k is in my house, but I still have to think about major purchases
WashuOtaku@reddit
Yes.
Elon Musk isn't the richest person in the world because he's swimming in a vault full of gold coins, he's rich because of stocks, which is not realized till sold.
hellojuly@reddit
Stocks are assets that can be recognized at fair market value. He owns pieces of companies like everybody who has a 401(k).
WashuOtaku@reddit
But they are not realized till they are sold... or, they are not taxed as income till they are sold.
hellojuly@reddit
With that logic your house has no value until it is sold. And there are almost no millionaires because everything is tied up and unrealized.
WashuOtaku@reddit
In a way. That is why local governments do a tax assessment on what they believe is the property value and how much it is taxed.
However, home equity (the current market value minus outstanding mortgage) is considered part of net worth.
dark567@reddit
Well..for someone who owns as much as musk they can't be realized at fair market value. If musk tried to sell all his shares in one of his companies it'd tank the stock and he'd get less than current FMV.
They are assets that can sold at some value but that value isn't necessarily stable.
hellojuly@reddit
Look at it from the other side. A company that wants to acquire another company will pay more than market value.
Silkies4life@reddit
Well, yeah. You have over a million dollars in assets. It isn’t nearly as impressive as it was 30 years ago, I know several millionaires. They’re all small business owners, drive F350s, and work 5-6 days a week.
Bcatfan08@reddit
Reminds me of the scene in Succession about having $5M.
You can't do anything with 5. 5 is a nightmare. Can´t retire. Not worth it to work. Five will drive you un poco loco my fine feathered friend. Poorest rich person in America. The world's tallest dwarf. The weakest strongman at the circus.
Al-Pastor@reddit
One of the best lines written for TV, ever.
ZergvProtoss@reddit
I actually agree with this sentiment. In my area, $5M is just enough for a nice house. But then you have $5k a month in property taxes, $10k a month for homeowner's insurance, plus furniture, upkeep, security, cars, vacations, etc. $5M is a nightmare.
Sooner70@reddit
But if you're retiring.... You can move somewhere with a lower COL. It's not like you're worried about job opportunities.
Bcatfan08@reddit
$10k a month? Are you in Switzerland or Miami?
ZergvProtoss@reddit
California. After a few years of wildfires, it's almost impossible to get homeowner's insurance in the Hills (Hollywood Hills, Beverly Hills, Bel Air, Malibu, etc)
Any-Concentrate-1922@reddit
5 million is a whole different thing than 1 million. For some people, $1M is not enough to retire on. $5M is.
AccurateIt@reddit
Yeah, could essentially retire anywhere in the world with 5 million in investments. A 4% withdrawal rate, which is considered safe, puts you at $200,000 a year income.
Bungalow_Man@reddit
I know it's just a quote, but assuming the 5 million is liquid, and not tied up in retirement accounts and home equity would get you 250,000 per year return from bonds or an annuity (based on current rates, 5% should be easy), an index fund could bring in more(\~7%), but that's not guaranteed. That's definitely enough for me to retire on, or if you had a 5-year plan to keep working your current job and bank your returns you could have around an extra million after taxes after those 5 years, so those returns would jump to 300,000 per year after that. Any overages just keep getting reinvested and compounding after that. Money makes money, that's why they say the first million is the hardest.
spintool1995@reddit
Ya being a millionaire doesn't mean you're necessarily rich anymore. Just comfortable.
CountDown60@reddit
For older people in the middle class, being a millionaire might mean they've contributed to a 401k/IRA their whole life and bought a house that has appreciated. They can't really use that money yet, but at least they'll have a shot at retirement.
kirbyderwood@reddit
A million dollars in a 401K or IRA means a safe withdrawal of about $40K per year, even less after taxes.
I mean $40K in passive income is not awful, but certainly not "rich"
smilineyz@reddit
Is the 40k year is straight line or accounting for investment gains for money not withdrawn?
If one were to have 1M in retirement funds, could one project a healthy SS payment of, perhaps, 2k mo * 12 is another 24k … and if a couple … then maybe more…
So, if waiting until retirement 64k/yr might be okay.
Heywoood_Jablome@reddit
4% Rule
Any-Concentrate-1922@reddit
That's exactly it. If you contribute to retirement starting in your 20s and you own a home, you'll be a millionaire eventually. Doesn't mean you'll be living in luxury, but you'll be able to afford to live when you retire.
t-poke@reddit
Yeah, I crossed that threshold not too long ago thanks to retirement accounts and a house. I’ll be happier when I’m a millionaire not including my house because my house won’t pay the other bills. Shouldn’t be too far off from that milestone.
But I certainly don’t feel like a millionaire. As kids, we dreamt of becoming a millionaire to have big houses, fancy cars, extravagant lifestyles, etc. The reality is far more boring. Maybe I need a million in liquid cash to feel that way.
But still, it’s nice knowing retirement is more or less taken care of. Now to just get there in 10 or 15 years…
juanzy@reddit
Don’t worry- teenagers on Reddit here soon will be able to tell us that anyone who makes over federal minimum wage is basically Jeff Bezos.
Remote_Ocelot9600@reddit
Not even comfortable in LA. Unless you live in a studio apartment and have a million in savings and no property. Property taxes alone would be 13k if you owned a million dollar house but had a 100k dollar household income.
TheDuckFarm@reddit
Yeah I’m a paper millionaire and I drive a 16 year old car.
Being a millionaire is nice, but it’s not all fancy dinners and caviar.
Individual-Area7121@reddit
Paper millionaire is the best kind of millionaire. Way better to have that value in assets than in cash which can always rapidly devalue.
Spike-White@reddit
Better is a liquid millionaire.
I.e. $1M in assets you can easily access (stocks, brokerage account, 401k/IRA if you’re over 59 1/2).
Instead of $1M in illiquid assets (house. 401k/IRA if you’re below 59 1/2).
Christymapper71@reddit (OP)
I love fancy dinner and caviar lol. Agreed
Visible-Disaster@reddit
“I love a burbling V8 and cruising country backroads. Spending money on fancy calories is dumb.”
Everyone has their interests and passions. A car is no more a dumb decision than caviar. At least the car is around for more than a single night.
Christymapper71@reddit (OP)
That’s fair
CPA_Lady@reddit
Lots of people are 401(k) millionaires by the time they retire and should be. That isn’t that hard to do.
ELMUNECODETACOMA@reddit
This. I'm in the tech industry and pretty much everyone in my department should retire as nominally a millionaire.
ZergvProtoss@reddit
Actually, no. Having a million dollars in assets is not being a "millionaire". It depends on how much they owe on it. A millionaire has $1 million + in net worth.
Silkies4life@reddit
Literally says (outright) in the title homie.
ZergvProtoss@reddit
It was probably just odd phrasing by OP. I mean everyone that buys a home (with or without a mortgage) "owns" the home, it's just that with a mortgage, someone has a lien on it. So, yeah, if they meant with no mortgage or other encumbrance, then they have a million-dollar asset. But then the question is: what is the rest of their financial picture? It still doesn't make them a "millionaire" to own a million dollar house with no mortgage if they owe $2M in other debt with no other assets. Ultimately, this post shouldn't exist. I mean, the definition of a millionaire is someone with a net worth of $1M or more. It's pretty simple.
Sooner70@reddit
There was absolutely nothing odd about OP's phrasing. They used the word "outright". That means no mortgage. No liens.
coldlightofday@reddit
You’d be surprised how many normal 9-5 people are millionaires. Many people in the 40s and up who bought a house 10+ years ago and have steadily put money away into their 401k over a couple decades are probably millionaires.
Many_Pea_9117@reddit
All my friends with net worth >1M are tech or finance bros. I have another 7-10 years at my current savings rate that ill hit that with my mortgage and 401k,and will be in my 40s.
Heywoood_Jablome@reddit
In 7-10 years $1M will look a lot different than it does today.
Many_Pea_9117@reddit
Yeah, and in another ten years itll double again in typical market conditions. If the economy doesnt look good then I can just retire at a normal time. Not the end of the world. If I wait til im 65, with normal market conditions (rule of 72), ill hit around 4M. Even if its "a lot different," I am sure ill be okay. My mortgage will also be paid off by then, so ill just have taxes to pay, or we can sell and move somewhere cheaper. Currently we are in a HCOL city. Plus we have a ton of family who are doing even better than we are. Lots of contingencies.
rrsafety@reddit
I’m a “millionaire” but it’s all house and retirement. So it’s not what it’s all cracked up to be.
AlarmedWillow4515@reddit
Yep. We're millionaires now after saving for thirty years, and we live a modest lifestyle. The biggest difference is that we don't stress if there's a sudden unexpected repair or medical expense.
Christymapper71@reddit (OP)
Agreed. We inherited the home from my in-laws. Huntington Beach, CA. Taxes are low due to CA Prop 13 (home originally purchased in 1975) so it’s cheap living. We have no debt though so the home adds to our net worth. We don’t feel wealthy of course since it’s Southern California.
wiserTyou@reddit
It it's really bothering you I'll take it. Depending on how many people inherited it you're probably not a millionaire. But there's nothing wrong with a little easy living, anyone who says otherwise is just jealous. There's a chance I'll be near 1m in assets when I inherit my parents house, but I'm really not looking forward to it.
Christymapper71@reddit (OP)
My thinking as well.
Chuckles52@reddit
The rule everywhere is $1 million or more when you add assets and debts together (debts are negative) If you have debts of $600,000 then no. But millionaires are common in America. Not a big deal anymore.
HoweHaTrick@reddit
No.
youtheotube2@reddit
If the definition of net worth was based on the amount of cash you have in the bank there wouldn’t be a single billionaire in the world, and there would be very few millionaires
No-Handle-66@reddit
Yes. Net worth includes the value of real estate, cars, cash, investments, and retirement accounts, minus any debt.
West-Improvement2449@reddit
It depends on when you bought the house. Like is it worth 1.5 now. Or did you pay 1.5 million. Michael Jordan happy house he paid 29 million for and it sat unsold for 12 years before he finally sold it for 9.5 million he lost money
D3moknight@reddit
Yes.
zusia@reddit
Oh boy, I’m a millionaire. Whoopee.
MattieShoes@reddit
No. Net worth is assets minus liabilities, so it would require also having no more than 0.5M in liabilities.
Christymapper71@reddit (OP)
I don’t. No debt
MattieShoes@reddit
Then yes, millionaire. But it's still theoretically possible to own a 1.5M dollar home outright and not be a millionaire. Though it'd be tough to accrue 500k of debt with no mortgage.
art-apprici8or@reddit
You get to count the portion of the house that you (not the bank) actually own. 1.5M house that is half payed off, then you can add .75M to your net woryh.
ALoungerAtTheClubs@reddit
Google says net worth of a million or more.
railworx@reddit
Net = gross - debt
ALoungerAtTheClubs@reddit
Yes, so if they own a $1.5 million outright, as in the question, they're a millionaire unless they have other debt.
StOnEy333@reddit
It hunk the confusion lies in what exactly people consider “owning” a home. Lots of people say they’re home owners, when really they’re home buyers. After 30 years of payments, they’ll be owners.
But as you said, as the question states, if you own the million dollar home, they’re millionaires.
TheDuckFarm@reddit
That’s not how it works. Buying a house is not a rent to own or in RE “contract for deed” situation. Even if you own money on the home, you own it.
A mortgage doesn’t mean the bank owns it. It means the owner has hypothecated the property as collateral to the bank.
jek39@reddit
are you a "millionaire" if you bought a million dollar house but your mortgage balance is 900k?
DimbyTime@reddit
No, because all of your debt, including mortgage deb, is subtracted from your gross assets to calculate your net worth
TheDuckFarm@reddit
No, you're are a one-hundred-thousand-aire.
ALoungerAtTheClubs@reddit
Yes, "outright" does a lot of heavy lifting here.
venturashe@reddit
Property tax annually?
Biterbutterbutt@reddit
What do property taxes have to do with anything? If you outright own a 1.5M home your property taxes are at most around 15k per year. That doesn’t make you not a millionaire.
Christymapper71@reddit (OP)
Pretty low. Prop 13 in California and home was bought in 1975. Inherited via a trust
ALoungerAtTheClubs@reddit
Unless they're in arrears they'd still have a net worth of over $1 million.
Christymapper71@reddit (OP)
No other debt
Utterlybored@reddit
Yes, but it doesn’t mean you’re rich.
Previous-Space-7056@reddit
Age matters. 1m at 20 is rich. 1m at 60 years old isnt
Many-Rub-6151@reddit
1m at any age isn’t rich. Just because you have a million at 20 doesn’t mean you can retire.
BrandonKD@reddit
You could easily retire on 1mil. You just have to move to a location that is affordable
Many-Rub-6151@reddit
That doesn’t make you rich tho.
BrandonKD@reddit
The statement was, you can't retire. You very much can
Many-Rub-6151@reddit
Yeah in a shit part of the country, counting your pennies. That isn’t rich. I meant a good retirement, not a limited one.
BrandonKD@reddit
Moving the goal post now? Even if all you did was put it in a CD or a bond or some shit, that's 50k a year. Index funds average 10 percent, even though it's been like 20% the last several years. That's 100k a year
Have you never traveled? You can get a nice ocean view apartment in the good neighborhoods all over latin America or Asia etc for like 1k a month. You can easily retire on a million invested. It just can't be in like San Diego.
Many-Rub-6151@reddit
I’ve been in Vina Del Mar since October lol. This thread was speaking on living in the US plus you’re being overly optimistic on your calculations. Obviously 1 million is different in a foreign country🤦♂️
BrandonKD@reddit
Your statement was you can't retire on one million. You can.
Prowindowlicker@reddit
If you have 1 million at 20 and invest it for 40 years with no extra contributions at a rate of 6%, you’d have about $10 million.
So ya you’d be rich. If you added an extra $100k every year you’d have $25 million.
papercranium@reddit
1m at 20 means you'll never have to save an additional dime for retirement. Just invest it and work enough to pay your basic bills day to day and retire early. I'd call that rich.
Prowindowlicker@reddit
This. Especially if you take that 1 million and invest it within 40 years you’d have over 10 million.
Individual-Schemes@reddit
LA and SF, that's a regular sized one bedroom condo or townhouse.
spintool1995@reddit
When I was a kid in the 80s we might say, "Joe is rich, but he's no millionaire." Now people can say, "Joe is a millionaire, but he's not right."
Yourlilemogirl@reddit
Asset rich, cash poor
rhino369@reddit
A million isn’t even asset rich. That’s like a modest retirement that is going to heavily lean on social security.
Remote_Ocelot9600@reddit
That is most wealthy people. Mr beast barely keeps money in his bank account. Nobody I know who are wealthy (myself included) keep more than a months bills in liquid.
Christymapper71@reddit (OP)
Agreed!
Different_Cherry8326@reddit
Technically, yes.
But being a millionaire is now basically meaningless. The term was first popularized I believe in the 1920s when having $1 million was equivalent to having $20 million today (roughly, just off the top of my head).
Today, nearly anyone who is middle-aged and owns a home and has a retirement account is a millionaire.
Sooner70@reddit
Yup. I am a millionaire. That said.... I work a nomral 9 to 5. I bought a home during the housing crisis (cheap real estate!), and have put money into a 401K every paycheck since age 25. I have done literally nothing else.
Individual-Area7121@reddit
Yeah I’m not far off at 40 and I’m not even close being “wealthy”. We aren’t poor but we certainly don’t have a lot of extra cash to throw around.
revolutionoverdue@reddit
Maybe. It depends on their other liabilities and assets.
Special-Estimate-165@reddit
If you own it, i.e. the mortgage is paid off and its not technically owned by the bank, ir if you have a low enough mortgage left that your equity plus other assets exceed 1 million then you are by definition a millionaire.
TManaF2@reddit
"Owning" a home doesn't mean you actually own the home: there is usually a mortgage, and you have less than $1 million equity in the home. I used to think of a millionaire as someone who has more than $1 million in liquid or semi-liquid assets; now, I think of a millionaire as someone who earns more than $1 million/year
YourGuyK@reddit
Yes, but it really doesnt matter. People have been using "millionaire" to refer to the rich for 300 years. It really doesnt mean the same thing as it did in the 19th or even early 20th century anymore. Today we use billionaire the way they used millionaire back in the day.
freecain@reddit
It depends on what formula you use; some don't count your house, since it's not a liquid asset. Others count a portion. Some count the amount you could borrow against.
There is no "millionaire" defined group, but rather a threshold you are measuring people against for a defined reason. So why do you care? That will help figure out how to determine what should be counted.
mcaffrey@reddit
Yes, but millionaire is just upper middle class these days. Upper class is going to be a net worth of more like ten million.
Wagner228@reddit
What’s your made up interpretation of upper class?
Doctor_Juris@reddit
If it’s defined as top 1%, you need about $13.7M in net worth to be in that category.
Wagner228@reddit
Source for that definition? I’ve always seen upper income as 2X Median (Pew Research) and upper class starting at 95th percentile, or \~$3M. Age is also a significant factor. $3M at 30 may be solid upper. $3M at 65 is middle class retirement savings.
99th percentile is drastically different.
Doctor_Juris@reddit
As far as I’m aware there is not a single authoritative definition of “upper class.” Which is why I said IF it’s defined as the top 1% in this context, this poster would be correct.
Wagner228@reddit
So, as I asked, what was their made up definition? They’re defining it as 1%. You stated it was defined as 1%. That’s a number pulled out of your asses that isn’t supported by any commonly accepted source or statistic.
Doctor_Juris@reddit
I love the smell of pedantry in the morning. 😂
Wagner228@reddit
Sounds like a compliment. Too many dip shits portraying garage opinions as fact.
mcaffrey@reddit
Yeah, I was going for top 1%. That is where I feel like a person doesn’t have to work anymore.
But I agree that there is no specific definition; I was giving my opinion.
Christymapper71@reddit (OP)
Agreed!
-dag-@reddit
No
AutomaticRepeat2922@reddit
When you buy a house you typically use a mortgage. If you owe $1.2M on a $1.5M house, your net worth is $300k so not a millionaire
imuniqueaf@reddit
Owning a home outright in my opinion is baller as fuck.
Christymapper71@reddit (OP)
It was inherited. No credit deserved
Past_Worker_8262@reddit
No. Just makes you in debt with assets totaling as such.
Christymapper71@reddit (OP)
100% equity. No other debt.
Responsible-Bend-183@reddit
Yes technically. Equity would count. But there are a lot of Millionaires in the sense of having liquid cash in excess of $1 million too. This is what a lot of Americans wish they had.
RichPokeScalper@reddit
Of course. If you have your wealth in cash you will soon have none. The smart move is to take your liquid cash and park it somewhere else anyway.
EmploymentEmpty5871@reddit
I guess if your net worth is over a million, unless you mean cash on hand.
slatchaw@reddit
That house could be 650k in a month so it best to have the mil in cash, gold or something stable
pinniped90@reddit
Yes? I would assume such a person doesn't have $500,000 in other debts and zero other assets ...
blunttrauma99@reddit
Bernie Sanders thinks so, and you should be taxed appropriately.
Odd-Condition-4773@reddit
If you flat out own the house (no mortgage) then technically you have $1.5M in assets, BUT at the same time you could have debts and less in cash savings.
Houses around DC could easily be around $1.5M dollars, but that doesn’t mean they’re millionaires. It could be a dual income household that were in a good position to get a mortgage.
GlobalTapeHead@reddit
Only if the equity in the 1.5 million home + your cash and investments - other debts = $1 million. Net worth has a universal definition, despite everyone wanting to come up with their own definitions.
ChapterOk4000@reddit
If it does it means nothing. In my condo community, our 3 bedrooms go for 1.3 million. Nobody would say the people in this community are anything except middle class.
WesternWind73@reddit
Yes, just like it does everywhere else.
phydaux4242@reddit
This is a perfect example of “The Millionaire Next Door.” It’s actually not hard for a working class family to have a net worth over $1MM. All it takes is a little know-how and a LOT of self discipline.
RealFlatworm-@reddit
I'm a millionaire with no know-how and no self discipline
TweeksTurbos@reddit
Not if the bank owns it
RealFlatworm-@reddit
Did you read the title
AnybodySeeMyKeys@reddit
If your wealth is tied up in a house, it's house poor. I define millionaire as investable and liquid assets.
Christymapper71@reddit (OP)
How is that different than wealth tied up in stocks? Both are speculative and could crash
AnybodySeeMyKeys@reddit
Because you can literally log into your Fidelity or Vanguard account, sell everything within minutes, and the money shows up in your bank account. And, at any given moment, you know what your stocks are worth.
For you to pull the wealth out of your home, you have to go through a six- or eight-week process of marketing, negotiating, and closing. Even then, until you arrive at an agreed-upon sales price, you don't know what cash you could get from the sale. Lots and lots of people have had an exaggerated notion of the equity in their homes, only to be sorely disappointed when actual offers are made.
CharlesAvlnchGreen@reddit
Because you can live without a stock portfolio. You cannot without a domicile. OK, technically you could sleep on the streets but most people do require a place to call home and store their possessions.
thabonch@reddit
Yes. A millionaire is someone with at least $1 million in net worth.
mantisboxer@reddit
If your assets minus your liabilities are over $1M then you are a millionaire. That doesn't mean the assets are liquid, and you might still not cash flow
Loud_Inspector_9782@reddit
As long as you owe less than $500,000 on it.
Angelcstay@reddit
Net worth is the total value of your assets (what you own) minus your liabilities (what you owe).
So if you own a 1.5 million dollar house outright (which i am assuming mortgage paid) -Yes
If you still own the bank then, Market Value - Remaining Mortgage.
r2k398@reddit
Yes. If we are going to credit people with the billions they hold in unrealized stock we should count a home into net worth.
gummibearhawk@reddit
If you actually own it, yes. If you have a mortgage on it, no.
Poltergoose1416@reddit
A millionaire is someone who's net worth is 1 million plus dollars
gpburdell404@reddit
Yes but a million dollar house is vastly different than having a million dollars in liquid investments. I prefer to be the latter and in the US only 1-2% of individuals reach that.
chodan9@reddit
It’s termed net worth millionaire, different from a liquid millionaire
Adventurous-Depth984@reddit
As long as you don’t have more than 500,001 in liabilities, yes.
phydaux4242@reddit
Outright? Yes. If you have a greater than one million dollar net worth, then you are a millionaire.
rawbface@reddit
Yes definitely. It's based on net worth.
ManInACube@reddit
Millionaire doesn’t mean what it used to. On Giligan’s island it was a guy walking around with sacks of money owning companies and all the jewelry in the world. Now it’s anyone who inherited their parents house and has a solid 401k account.
0le_Hickory@reddit
Yes. But there is also liquid networth and then you wouldn’t count it.
Wafflebot17@reddit
It makes you a millionaire everywhere. Millionaire is $1m networth, what you own minus what you owe. 1.5m in one asset with no debt puts you over that threshold.
It does give less financial security then a million spread out between a house and assets producing cash flow but it’s still a millionaire.
w3woody@reddit
Yes, but we also talk about net worth not counting one’s home for investment purposes.
tracygee@reddit
No.
Owning a PAID FOR $1.5 million home does, however.
TheLizardKing89@reddit
Unless you have debts of greater than 500k, yeah. Net worth is assets (like the value of a house) minus liabilities (like a loan).
Auntie-Mam69@reddit
No.
Many-Rub-6151@reddit
Why wouldn’t it lol. You must be a kid asking this after watching a few videos on tiktok about people arguing what “net worth” means
CharlesAvlnchGreen@reddit
They say you're not supposed to include your residence as part of your net worth. In my area (Seattle), it's pretty common to own a house + furniture worth a total of $1M. However, the idea of "being a millionaire" as code for "rich" also feels outdated.
blkhatwhtdog@reddit
The concept of 'millionaire' these days isn't tied to a specific amount, but the ability to escape most consequences. back in the 80s I read an article about F U money. the amount needed to say F**k You to the world. which was 50m. They pointed to a texas oil mogul who hired hit men to kill his wife, undercover cops who arrested him. He hired a top notch lawyer, Racehorse Haynes, who got teams of psychologists to work up profiles of the entire jury pool to pick the most malible, gulible idiots. and it worked, he got off, now this guy then hired some more hit men to kill the prosecutor and this time the undercover cops got him on tape giving instructions, and later looking at photos of the supposed victim in the trunk of his car covered in 'blood' and chortling about it. once again the lawyer did his thing and got him off. it cost some 50m
these days the old fashioned label of millionaire is now Billionair. I mean 100 years ago you had Rockefeller, and Carnegie etc. who maybe had a quarter billion total. Today we're looking at a likely Trillionaire.
the typical 'millionaire' in the US these days has a total 100m, owns a auto dealership, a plumbing supply wholesale distribution center, apartments.
CarolinCLH@reddit
A 1.4 million dollar home is a 60 year old tract home in an ordinary suburban neighborhood. If you lived there long enough, you paid it off. Technically a millionaire, but not actually rich.
Chuck10@reddit
Depends on if your net worth is over a million.
Silvanus350@reddit
Yes. That’s… literally the definition of
stabbingrabbit@reddit
Thats the problem with the "rich" . Most are not cash rich but rich in stuff like stocks and real estate.
Usagi_Shinobi@reddit
Technically, yes, realistically, no. Having a million liquid makes you a functional millionaire.
TheKiddIncident@reddit
Yep. By definition.
S5Cook@reddit
That's why in modern America. You can be a millionaire. And still be scrounging for ramen and peanut butter.
But don't worry friends, If Cheeto musili gets ahold of The Fed, We will all be millionaires and no one will have food.
So very, very tired of winning.
LetterheadClassic306@reddit
technically net worth includes home equity so yeah you’d be a millionaire on paper. but most people mean liquid cash when they say millionaire. bankers look at your assets not just cash. i’d call you a millionaire either way but you can’t spend your house easily. it’s one of those debates with no hard answer.
onlyreason4u@reddit
No it doesn't. Having assets - liabilities equal something $1m or more does. It doesn't matter if it's realized or not. Equity in a house is an asset.
So you could be a millionaire with $1.5m im equity in a house, but only if:
Most likely you are but you don't have a lot of liquidity at that point. Real financial freedom starts around $5m in liquid assets. At that point you can live a very comfortable life, not have to work, and keep growing your net worth.
Penguin_Life_Now@reddit
It depends, to be an "Accredited Investor" you must have a net worth of at least $1 million excluding the value of your residence.
Christymapper71@reddit (OP)
That’s weird. I mean stocks are just as much a speculative, unrealized gain type asset as real estate. Must mean liquid assets.
Penguin_Life_Now@reddit
Look it up for yourself, search accredited investor requirements, its either average income of $200,000 per year for the last 2 years, or net worth of $1 million not counting value of primary residence.
Solcat91342@reddit
Yeah, but you can’t eat drywall
No-Assistance476@reddit
Yes. Retirement accounts also help make most "millionaires".
Odd_Mathematician654@reddit
You can't use house as only asset to determine worth. You could have a 1.5m house that still has a 1.3M mortgage. Or you could fully own the house but have $5M in debt.
Ippus_21@reddit
Yeah, "millionaire" is a slightly arbitrary label, but if you own the property outright, it's clearly part of your net worth, which would definitely put you in millionaire territory based on your assets.
Besides which, if you own such a home outright, you quite likely have enough other income/cash/assets to put you well into that classification anyway.
If you, say... just inherited the house from a richer relative and can't even afford the taxes and upkeep on a place like that, well then you'll have to sell it off. And you'll STILL be a millionaire, because you'll have liquidated it to something above a million in cash.
Christymapper71@reddit (OP)
Inherited but under trust in California. Prop 13 keeps our taxes low. Lucky, huh?
Curmudgy@reddit
Which is why Prop 2.5 in MA is superior. It limits the town’s revenue, which limits the average tax rate, but doesn’t lock in valuations that only change on sale.
spintool1995@reddit
Yes, you inherited over a million dollars from your millionaire parents, so as long as you hold onto it, you're a millionaire.
wekilledbambi03@reddit
Assets - Debt = Net Worth
Assets can be cash, houses, cars, stocks, pokemon cards, etc. Anything that has value and you own.
Housing going up so quickly in the last 5 years has made a lot of people accidental millionaires. There are 24 million adults in the US that are technically millionaires. 10% of Americans are millionaires. I myself fall into the category. But I sure as hell don't feel like one. Our house (bought in cash) and retirement accounts add up. But we only ever have a few thousand in actual cash available if we had a sudden emergency.
mtcwby@reddit
On paper but to realize it you'd have to sell. While I count properties as part of my net worth, I use conservative numbers on them and don't bother to update them. A millionaire isn't that big of hurdle anymore if you've worked 20 years and contributed to retirement accounts.
nebraskajone@reddit
Net worth of your assets minus liability so not enough information
Christymapper71@reddit (OP)
No other debt.
Ricelyfe@reddit
technically yes but depending what on where you are, it’s not that uncommon and not nearly as impressive as decades ago. As a californian, you should know having a paid off house brings you half way there if not all the way across the line in this state. Doesn’t mean they aren’t barely making ends meet day to day.
Trinx_@reddit
Yes. My millionaire sister shops at goodwill and saves takeout containers. She just has a normal decent home in one of Chicago's decent neighborhoods. That goes for close to $1M. I'm a quarter millionaire with my 1br condo.
TeamTurnus@reddit
Definitionally yes, millionare doesnt refer to exclusively cash or equivalent.
Alarmed_Drop7162@reddit
Housepoor
Christymapper71@reddit (OP)
100% equity. No other debt. Low taxes due to Prop 13 in Calif. So nope
Alarmed_Drop7162@reddit
“I should have bought that 2 bedroom in Fairbanks ranch when I was in kindergarten. “
wrigh516@reddit
Maybe. Only if your debts are $1M less than your assets. Millionaire status is measured by net worth, not cash in the bank. Only a billionaire or an idiot would have that kind of cash not invested in something.
Christymapper71@reddit (OP)
100% equity. No other debt.
tsukiii@reddit
Technically yes, but I personally own a 900k+ home and its not as exciting as I was promised lol
Christymapper71@reddit (OP)
Agreed
Building_a_life@reddit
Yes. But most homeowners are paying down 30-year mortgages. Only their equity counts, and that is usually less than the full value of the house.
Christymapper71@reddit (OP)
100% equity. No other debt
Rattlingplates@reddit
Well yeah if your assets total over a million then you’re a millionaire.
NevadaCFI@reddit
What if your liabilities are also over a million?
Rattlingplates@reddit
Then you’re a millionaire with liabilities
spintool1995@reddit
So if I take out a million dollar loan, I'm an instant millionaire?
Rattlingplates@reddit
The question is if you own a 1.5 million dollar home outright aka paid for not debt
spintool1995@reddit
It's net worth. Assets minus debt.
Rattlingplates@reddit
The questions is owning a home outright no debt but sure if you owe 19 million yeah
Active_Scallion_5322@reddit
Welcome to the wealth tax
venturashe@reddit
Probably not. At least in my opinion, you still owe property taxes annually.
Christymapper71@reddit (OP)
They are really low. Prop 13 in Calig
canisdirusarctos@reddit
It costs you to keep it and costs you more in taxes for having more “value”, so it isn’t really an asset, it’s a consumable good that happens to generally serve as a hedge against inflation. If it was a productive asset, like a rental property, sure. Would become grey if it was under 10-20% of someone’s readily liquidated assets.
Other financial assets, like stocks and bonds, make sense as part of one’s net worth.
Christymapper71@reddit (OP)
That makes sense.
CubicleHermit@reddit
There's "literally" and yeah it does, and then there's that a million ain't nearly what it used to be; per Google "There are approximately 24 million millionaires in the United States, which accounts for nearly 10% of the U.S. adult population."
$1M today would be $609k in 2006, $336k in 1986, and $97k in 1966
(and for shits, $55k in both 1946 and 1926 and actually lower in 1936 because the depression.)
Christymapper71@reddit (OP)
Interesting
Megalocerus@reddit
24 million American households have 1 million or more in net worth; that falls to 6 to 7 million if personal residence is excluded.
Christymapper71@reddit (OP)
Interesting
nwbrown@reddit
Assuming you own 2/3rds of it or at least enough to get your net work over $1 million, yes.
sgtm7@reddit
Assets minus liabilities is your net worth. If you have a 1 million dollar asset with no debts, then yes, you have a million dollar net worth. A millionaire.
If you have a 1 million dollar asset, but have 2 million dollars in debt, then you are 1 million in the hole. So not a millionaire.
OrthodoxAnarchoMom@reddit
Assuming you have no debts yes.
Appropriate-Food1757@reddit
Yes unless you weirdly have a shit ton other debt to offset it.
Assets - liabilities > 1M
humble-meercat@reddit
If you’re in Arkansas or Missippi maybe… if you’re in Manhattan or San Francisco that could be a grubby little roach infested studio apartment.
Location matters a LOT on this one.
Also is it financed or owned outright?
Owned outright is a real asset, finances is just debt.
Christymapper71@reddit (OP)
100% equity in home. No other debt. Southern Calif.
_Barbaric_yawp@reddit
It’s net worth, so owning a 1.5 million dollar home does not make you a millionaire unless you owe less than 500k to the bank. But millionaire is no longer an impressive designation. In 1900, it was elite. Now, it’s most middle class at retirement.
Christymapper71@reddit (OP)
100% equity in the home.
AdelleDeWitt@reddit
No. All houses cost well over million dollars where I live but I don't know anyone that I would call a millionaire.
Christymapper71@reddit (OP)
Agreed!
Bonch_and_Clyde@reddit
This is like asking does 1 = 1. Yes, if you are worth over a million dollars then you are worth over a million dollars, not just in the US but also everywhere. Numbers work the same in the US as the rest of the universe.
Christymapper71@reddit (OP)
I meant more in the sense of how people use the word, hence the quotes.
turdferguson3891@reddit
Yes. On paper anyway. It's not liquid, though. The market could always crash. Honestly "millionaire" doesn't even mean much with inflation anymore. There are thoroughly average people reaching retirement who are millionaires because of their home equity and a retirement account but they aren't dancing around in a top hat and monocle. It's a lot of money still if you had it in liquid form, but for it to be your net worth at an older age doesn't even mean so much now. Not saying it's nothing but it's not what it was decades ago. It's just like a "six figure salary" meaning a lot. It doesn't mean shit in some high COL areas.
Christymapper71@reddit (OP)
Agreed
OkayDay21@reddit
I guess technically. I have a few cousins who own million dollar homes on the Jersey shore outright but they are pretty broke. Their parents bought them or built them for cheap 50-60-70 years ago and they’ve just stayed in the family and appreciated in value. I don’t think they’re what most people think of when they’re talking about millionaires though.
Christymapper71@reddit (OP)
That would be me sorta. Although not broke. Do ok for SoCal
Ok_Competition_669@reddit
Technically yes, but, in California, due to how property taxes work, many retired people live in 1.5 mil houses that were bought for a dozen of oysters in the 60-s. Their net worth outside the primary residence may be very limited.
Christymapper71@reddit (OP)
Yup. Prop 13.
AdelleDeWitt@reddit
Yeah. Judging by the houses that sold in my neighborhood my house is probably worth 1.8 but the houses were all bought for between 20,000 and 30,000. No single person around here would consider themselves a millionaire.
Christymapper71@reddit (OP)
That’s my thinking too
Ok_Dog_4059@reddit
Most billionaires couldn't get access to 1 billion on a moments notice. All their value is in selling stocks and businesses.
So yes someone with a million dollar home paid for is technically a millionaire. We really probably don't register like that because we don't have millions in assets or cash. Many people with million dollar homes probably don't seem all that rich in some places.
12B88M@reddit
Seriously?
Being a millionaire means you have $1 million in net worth.
Owning a home with no mortgage on it worth $1.5 million definitely puts your net worth at least $500K over that threshold.
JohnMarstonSucks@reddit
It's like the billionaires out there. It's unlikely that any of them actually have a billion dollars as a liquid assetIt would be tied up in businesses and investments. It would be kind of dumb to just have a billion dollars in banks when it could be making you considerably more money elsewhere.
Franc-o-American@reddit
Outright, yes. Financed, no.
tee142002@reddit
Financed and owe <$500k, yes.
Living_Fig_6386@reddit
“Millionaire” is typically used to mean having a net worth of $1 million or more. Net worth is assets minus liabilities. If you had a $1.5 million dollar home, it does not necessarily follow that you are a millionaire; you could have a mortgage and owe more than $500K so your net worth could be less than $1 million.
atkinsonda1@reddit
Yes
blipsman@reddit
I guess? Although many consider $1m in liquid assets like stock and bonds.
SnooSquirrels4991@reddit
yes having a million cash is not nearly as common
chicagoliz@reddit
Technically, yes. Because you have over a million dollars. Is just that being a millionaire doesn’t mean what it used to in a practical sense.
Interesting-Run-6866@reddit
It makes you a "millionaire" anywhere based on how assets are defined in a basic economics class.
WheelChairDrizzy69@reddit
Absolutely. Most Americans who first become a millionaire do so in their 401k which is the same principle
No-Carry4971@reddit
Yes. If you own a $1.5M asset, you are a millionaire.
ladybugseattle@reddit
In some circles it refers to annual income more than $1million.
dangerousdave2244@reddit
No, absolutely not
Salty_Dog2917@reddit
Yes it does. If the person has 1.5 million dollars worth of paid off assets, he/she is a millionaire.
PoopsieDoodler@reddit
No.