The number of American millionaires has declined. This is bad news and not just for the ex-millionaires. More than the meaningless nominal wealth of the “super rich”, or the gap between rich and poor, the number of people with net worth of a million dollars is a reliable indicator of the health of the wealth-generating classes. If there are fewer successful entrepreneurs, there is a disproportionate weakening in the potential of the US economy as a whole – and as we have said before, although other economies are still growing, America still matters more than the figures alone might suggest.
To be “a millionaire” – whether in dollars, pounds, or, for the moment at least, euros – is the benchmark of success for most aspiring entrepreneurs. Contrary to media image, academic research confirms that the vast majority of us are not motivated by an active desire to join the “super rich”. Rising on artificial lists of the supposedly wealthy matters less than security, comfort, and the feeling of personal achievement, and for the vast majority the title of “millionaire” is the most convenient shorthand for having attained these things.
The beautiful Welsh actress Catherine Zeta-Jones was criticised for saying a million pounds was not a lot of money, but she was right –and not just because beautiful Welsh women are always right, whatever they say. A million is not really a lot of money these days. It was before the inflation of the 1970s. To be a genuine millionaire in those days was to be seriously wealthy, to enjoy a lifestyle inaccessible to the bulk of the population.
Today a million might stretch to a nice family house in one of the better suburbs of a provincial city, some antique furniture to put in it, perhaps a holiday home or a city pied-à-terre if bought when the market was low, and a new car or, if one has the eye for such things, perhaps a classic car with a special number plate. A second million, if invested conservatively, should yield enough to maintain all that and perhaps take a couple of really good holidays every year – a comfortable lifestyle, but hardly extravagant. In an age of ever-more necessary and ever-increasing health insurance, and school and university fees, a single million may not be enough to bring up a family.
Yet the very fact that millionaire-status is now attainable to so many, given a bit of effort, a bit of savvy, and, most crucially, a bit of the ball bouncing the right way, that makes it all the more important as the benchmark of business success. Being brutally honest, the “super rich” will always look after themselves and the government will always look after the poor – so long as they have votes – but it is the people in the middle, the entrepreneurs, the millionaires, the aspiring millionaires, the would-be millionaires, and the wannabe millionaires, who determine the success or failure of a nation’s economy. If they are hurting, then everybody hurts.