Tuesday, January 29, 2008

Percentage of PA's Millionaires Rising ... Slowly

On January 9, 2008, annual survey results about American millionaires were announced by Phoenix Marketing International, in its Press Release entitled "New Jersey Has Highest Percentage of Millionaire Residents".

The Phoenix Affluent Marketing Service, a Phoenix Marketing International practice, announced today that New Jersey has become the state with the largest percent of millionaires to total households. Ranked second past two years, New Jersey vaulted past Hawaii, which fell to fourth in the 2007 rankings. Phoenix’s annual market sizing analysis and aggregate wealth rankings shows that New Jersey’s ratio of millionaires to total households rose to 7.12%, up from 6.5% in 2006.

Maryland is now in second place at 7.08%, up from 6.2% in 2006. Connecticut is third, with a ratio of 7.0%, up from 6.2% a year ago. Hawaii’s ratio of 6.7% was unchanged from a year ago.

Phoenix defines a millionaire household as one with $1 million or more in investable or liquid assets.

“Traditional East Coast concentrations of wealth have continued to outperform most of the rest of the country,” says David Thompson, Managing Director of the Phoenix Affluent Practice.

“This is a function of three factors: high levels of education; access to top paying jobs in finance and technology; and a stock market that has advanced over the past four years,” notes Thompson.

Rounding out the top ten for 2007: Massachusetts remains in fifth place; Virginia rose to sixth from seventh past Delaware, which fell one spot; Alaska leaped to eighth from fourteenth a year ago; ninth-place New Hampshire, was up from eleventh in 2006; and California came in tenth, down two spots from 2006.

The Press Release notes that complete states’ rankings for 2005 through 2007 are available online (in an Excel spreadsheet) by visiting the Phoenix site. * * *

According to these surveys, the percentage of Pennsylvanians who qualify as "millionaires" is slowly increasing, but, when compared with the other states, it remained consistently steady for all three years at No. 23.
Pennsylvania Total Households $1MM+ Ratio Millionaire to Total HH
2005 4,870,667 201,983 4.15%
2006 4,903,270 228,270 4.66%
2007 4,916,948 252,326 5.13%
The national average is increasing, too:
2005 4.30%
2006 4.80%
2007 5.25%
So, Pennsylvania remains under the national average. But are the real number of "millionaires" -- representative of high wealth -- effectively increasing, or is the bar constantly being lowered by inflation instead? See: PA EE&F Law Blog posting "Inflation, Indexing, and Millionaires" (08/31/07).

As indicated in the comparison of the ten largest states in population (see graphic above), Pennsylvania (the sixth largest state) is just above Texas and Ohio, but below the rest.

The survey does not reveal, but we might be able to determine from other statistical data, where in Pennsylvania more of those millionaires reside.

According to data posted on Wikipedia, Pennsylvania has only three of the 100 wealthiest counties in the entire country, measured by
per capita income. Those counties are:
  • Chester County (#34)
  • Montgomery County (#44)
  • Bucks County (#84)
Within all counties in the Commonwealth, wealth resides more in the sprawling, expanded suburbs than in the urban areas or in its inner-ring suburbs, according to a study by IssuesPA (an initiative of the Pennsylvania Economy League), entitled "Changing Patterns of Wealth in Pennsylvania's Communities" (April, 2004).

For more detail about wealth in Pennsylvania, measured not by assets (millionaires), but by income (earners), see the listing provided by
Wikipedia of all incorporated areas and census-designated places in Pennsylvania ranked from highest capita income to lowest per capita income.

One place really stands out, at the head of that list: Green Hills, Washington County, PA, which only has eighteen residents and seven households.

To them I would say, please don't move to New Jersey, or Maryland, or Delaware.

Update: 04/03/08:

Yahoo Finance posted an article published on March 20, 2008, in Barrons, entitled "
Are You Rich?", by Tom Sullivan, who asked: "How much of a nest egg do you need to join the true elite?"
Yes, it takes more than $10 million to be seen as rich these days. It takes more like $25 million.

Not only is that the minimum for the red-carpet treatment at a growing number of banks, it is also, in the view of many experts, the sum needed for a truly cushy retirement, one free of financial worry. * * *