ANCHOR: A new survey shows Americans mistakenly believe that 15 percent of US Households are millionaires, when in fact, just about one-third are worth more than a million dollars.
ANCHOR: Money and real estate expert Ilyce Glink is here with the details of the study and some suggestions on how you can reach millionaire status yourself. Welcome.
ILYCE: A new study from the Consumer Federation of America and Providian Financial shows that millionaires tend to be older, have graduate or professional degrees and earn more than $100,000 per year. All that isn’t so surprising, but what is interesting is that the average American is doing a pretty good job of building assets, even with incomes as low as $10,000 per year. Half of all American households headed by someone 45 years of older have more than $100,000 in assets, and 26 percent of families with incomes between $10,000 and $25,000 are worth at least $100,000 as well.
AGE EARNINGS MEDIAN NET ASSETS
65+ $10,000-$25,000 $106,400
65+ $25,000-$50,000 $215,300
ILYCE: For most Americans, home is where the cash is. If your net worth is $100,000 or more, you tend to have 43 percent of your assets in your home and just 17 percent I retirement accounts. On the show, I often talk about how you don’t need to earn much to end up with a whole lot of money in retirement, and this new study proves that to be true. For families who earn $50,000 a year or less, your best shot to becoming wealthy is to simply buy a house and start paying down the mortgage. Time helps, too.
NEW WORTH INCREASES WITH AGE
INCOME Under 35 65+
$10,000-$25,000 $3,010 $106,400
$25,000-$50,000 $14,560 $215,300
$50,000-$100,000 $59,220 $369,200
$100,000 $191,600 $1,249,100
ILYCE: How can you increase your net worth? Buy a house, pay or prepay the mortgage. Avoid tapping your home equity for anything, and pay off the house before you retire. Finally, fully fund your 401(k) or other retirement plan, especially if you have a company match.