U.S. Millionaires and Billionaires: You Might Not Believe the Wealth

The millionaire next door is a lot more common than you might think.

For decades, the term "millionaire" has been one of the most common ways to describe a wealthy individual. It doesn't mean nearly as much as it once did, thanks to inflation. But it's still widely used and is normally a sign that a person is doing pretty well with personal finance. And then there are billionaires, who unarguably have more money than any human being could ever need.

Just how many people have reached these major financial milestones? We have the answer, thanks to the latest USA Wealth Report from Henley & Partners.

How many millionaires and billionaires live in the United States?

There's a staggering amount of wealth and high-net-worth individuals in the United States. It's home to $65.4 trillion in private wealth, by far the largest wealth market in the world. For comparison's sake, second-place China has $21.7 trillion. Here's how many people the United States has in each major wealth classification:

• 5.3 million millionaires with a net worth of at least $1 million
• 9,630 centi-millionaires with a net worth of at least $100 million
• 770 billionaires with a net worth of at least $1 billion

The numbers reflect how rare each respective level of wealth is. Being a millionaire is still a major achievement, but it's not too uncommon. The U.S. Census Bureau reports that there are 258.3 million adults in the United States. Based on that, millionaires make up about 2% of the adult population.

Centi-millionaires and billionaires, on the other hand, only make up small fractions of a percent. So, the average person will run into about two millionaires for every 100 U.S. adults they meet, but they could go their entire life without meeting a centi-millionaire or billionaire.

As far as averages go, the average wealth of a person living in the United States is $198,000. Keep in mind that outliers with ultra-high net worths surely bring that average up quite a bit. Despite the amount of wealth in the United States, it doesn't have the wealthiest average citizen. It ranks fifth there, behind Monaco, Switzerland, Luxembourg, and Australia.

How to build wealth and become a millionaire

Now that you know the numbers on how many high-net-worth U.S. adults there are, let's look at how you can join their ranks.

Specifically, we'll go over how to become a millionaire, because that's an achievable goal. If you manage money well, you can build a $1 million net worth. It's becoming a centi-millionaire that's likely going to be unrealistic, and billionaire status is definitely out of reach for most people not named Bezos or Rihanna.

The path to becoming a millionaire is fairly straightforward. Here's what you need to do to get there:

• Find a stable source of income. It certainly helps to have a high income, as well, but this isn't required.
• Have manageable fixed costs (essential expenses). Ideally, these shouldn't take up more than 50% to 60% of your income.
• Be careful about how much you spend. You can spend money on yourself, but watch out for big, unnecessary expenses.
• Invest your money. Aim to invest at least 10% of your income per month, and 20% is even better. Start by investing in retirement accounts, such as 401(k)s or individual retirement accounts (IRAs), because these have tax benefits. Many employers also offer a 401(k) match up to a certain amount.

As far as what you should invest in, having stocks in your portfolio is what's most important. The stock market has an average return of about 10% per year, so it's a reliable and effective way to build wealth. An easy way to invest in stocks is with an index fund that tracks either the total stock market or the S&P 500.

When you're young, most of your investment portfolio should be in stocks. You could put 90% of your portfolio in stocks and 10% in bonds, which provide fixed returns. Once you get closer to retirement, you can shift more money to bonds to preserve your wealth.

It might seem simple, but the reality is that building wealth isn't complicated. The hard part is staying disciplined by investing every month and not overspending. If you do that, you'll make it to a net worth of $1 million and beyond.