The number of Americans with more than $1 million in net worth, excluding their primary residence, rose for the third consecutive year in 20...

The number of Americans with more than $1 million in net worth, excluding their primary residence, rose for the third consecutive year in 2005 reaching record levels, according to TNS, the global research company. The TNS Affluent Market Research Program, an annual survey of wealthy US households, said the increase in US millionaires is pegged to long-term wealth accumulation, rather than new wealth creation. The mean net worth for these households was $2,167,167 and the mean investable assets were $1,442,841. The average age for the head of the millionaire household is 58 years old, and almost 45 per cent are retired. Nearly 60 per cent of millionaire households obtain investment advice from a professional advisor and over 73 per cent prefer to do business at a single institution that brings together targeted specialists and services. When asked to identify their single most important financial goal, the leading response was, “to assure a comfortable standard of living during retirement.” Less important financial goals on the list included leaving an estate for heirs, protecting estate from taxes, minimising income and capital gains taxes, improving household liquidity and charitable giving. Real estate holdings continued to be an investment portfolio staple, said the survey. Some 46 per cent of millionaire households own investment real estate such as a second home, third home, rental properties and undeveloped land. About 34 per cent hold a first mortgage on these residences and 25 per cent have second mortgages on additional residences. Seventy per cent of US millionaire households own investments in stocks and bonds, 68 per cent in mutual funds, and 58 per cent in individual retirement accounts. The number of millionaire families in the US rose to 7.1 million in 1999. The figure then dropped as a result of the crash in technology stocks to 5.5 million by 2002. There has been a steady increase since then to 6.2 million in 2003 and 8.2 million in 2004, said TNS. Jeanette Luhr, manager of the TNS study, said: “These millionaire households understand that calculated risks are still a necessity within their portfolio design, however, over 50 per cent have become much more conservative in their investment approach over the past year.” TNS also identified the ten counties across America with the highest number of millionaire residents. Top of the list was Los Angeles County with 262,800 millionaires representing some 23 per cent of the population. Cook County (Illinois), Orange County (California), Middlesex County (Massachusetts) and Palm Beach (Florida) all ranked in the top ten. The ranks of America’s super-wealthy are also swelling. According to Boston Consulting Group, in 2000 there were about 65,600 households across the world with more than $20 million of investable assets. Over the last six years that number soared to 116,400 households, with 48,500 of those in the US. Extremely high net worth families are typically first generation wealth and made up of a younger demographic, said BCG. They are willing to explore non-traditional asset classes and riskier alternatives. These include private equity, leveraged buyouts, venture capital, and certain types of higher beta hedge funds, such as distressed debt and event-driven strategies.