Millionaire: is it still a relevant descriptor?

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Forums › Finance and wealth management › Millionaire: is it still a relevant descriptor?

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Batman

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#2735613 28-Jun-2021 09:04

A friend I know has over 20 houses. Quit uni and bought property. Should have listened to her.

Yes she owes the bank some money but I'd call her a millionare many times over.

Handsomedan

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#2735630 28-Jun-2021 10:07

Reading through this has made me think a little bit more broadly about what the terms Millionaire and Billionaire actually mean, or at least how they are being used.

Stop and think about what we mere mortals think a millionaire or billionaire is worth. Then think about what the media have stated about people that we know owe incredible sums of money and are effectively insolvent - yet are still referred to as billionaires or at the very least, millionaires.

It's like there's a selective set of terms for average people who have a million dollars worth of assets and then a completely different set for those that "own" vast swathes of property, businesses and flash cars, but owe massive amounts on all of that...the ability to repay is never in question - it's a massive income that services the level of debt, that presumably makes them millionaires or billionaires and therefore keeps them in the lifestyle. Some of them hit the wall and go bankrupt, but recover quickly (often at the expense of others less morally bankrupt), and they never really stop being referred to as M or B...

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Handsomedan

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#2735631 28-Jun-2021 10:08

Batman: A friend I know has over 20 houses. Quit uni and bought property. Should have listened to her.

Yes she owes the bank some money but I'd call her a millionare many times over.

I think there'd be some in this country who'd refer to your friend not as a savvy investor, but evil incarnate...for reference I am not one of them.

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Geektastic

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#2735920 28-Jun-2021 17:50

All good points. However I still don’t think that ‘millionaire’ as a term is especially helpful when a million doesn’t actually go that far. AMG sell a car that costs over $800,000 for example. A Tesla can cost a quarter of a million.

It still feels to me like the term is used literally but interpreted using an assumption about spending power that is about 30 years out of date.

The average person aged 65 who has lived in a reasonable location for 40 years is probably now a millionaire. Literally. But even in cash that only gives you $100,000/year for ten years.

I think $10 million is the new million. Maybe “decamillionnaire”?

On a side note, theoretically one day inflation will cause a loaf of bread to cost $1 million!

Batman

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#2735960 28-Jun-2021 19:02

Geektastic:

On a side note, theoretically one day inflation will cause a loaf of bread to cost $1 million!

Have you heard of Zimbabwe?

alexx

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#2735964 28-Jun-2021 19:22

It means you can pay off your student loan and live in a house that you mostly or fully own, but you might not be as wealthy as what some politicians call "ordinary kiwis".

#include <standard.disclaimer>

mattwnz

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#2736018 28-Jun-2021 19:50

Batman: A friend I know has over 20 houses. Quit uni and bought property. Should have listened to her.

Yes she owes the bank some money but I'd call her a millionare many times over.

But what are the quality of them like? eg are they rentals? So many rentals I have seen being listed are not great and I wouldn't want to live in them. Hopefully standards required continue to improve. I can see big costs coming to owners in the future as renters demand better living conditions. I can also see it becoming more commercialized, and mum and dad landlords being pushed out by the regulations. The government are starting to make things harder, with the healthier homes stuff (Doesn't go far enough IMO) and requiring investors buy new houses if they want to benefit from the kickbacks.

But my issue when looking to buy a rental myself, was how it could be treated, and whether they will look after it. That would be my concern with buying a new house. Buy doing the sums, buying new, I wouldn't be able to get enough rent in the area I am in, as house prices are too high to make renting them out worth it, especially longer term, where we don't know if we are going to end up with a glut of rentals.

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mattwnz

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#2736020 28-Jun-2021 19:56

Geektastic: All good points. However I still don’t think that ‘millionaire’ as a term is especially helpful when a million doesn’t actually go that far. AMG sell a car that costs over $800,000 for example. A Tesla can cost a quarter of a million.

It still feels to me like the term is used literally but interpreted using an assumption about spending power that is about 30 years out of date.

The average person aged 65 who has lived in a reasonable location for 40 years is probably now a millionaire. Literally. But even in cash that only gives you $100,000/year for ten years.

I think $10 million is the new million. Maybe “decamillionnaire”?

On a side note, theoretically one day inflation will cause a loaf of bread to cost $1 million!

There have always been expensive cars. I think cars are cheaper now than ever when taking in account inflation.

But they don't seem to be going up as much as houses. House price inflation is what is currently a major problem, as it also causes lots of knock on effects, and inflation around services and products associated with housing. Contractors can how for example earn more than experienced university educated people, and some of the hourly rates I have seen are very high. But wages in general are not increasing much.

Geektastic

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#2736345 29-Jun-2021 15:28

mattwnz:
Geektastic: All good points. However I still don’t think that ‘millionaire’ as a term is especially helpful when a million doesn’t actually go that far. AMG sell a car that costs over $800,000 for example. A Tesla can cost a quarter of a million.

It still feels to me like the term is used literally but interpreted using an assumption about spending power that is about 30 years out of date.

The average person aged 65 who has lived in a reasonable location for 40 years is probably now a millionaire. Literally. But even in cash that only gives you $100,000/year for ten years.

I think $10 million is the new million. Maybe “decamillionnaire”?

On a side note, theoretically one day inflation will cause a loaf of bread to cost $1 million!

There have always been expensive cars. I think cars are cheaper now than ever when taking in account inflation.

But they don't seem to be going up as much as houses. House price inflation is what is currently a major problem, as it also causes lots of knock on effects, and inflation around services and products associated with housing. Contractors can how for example earn more than experienced university educated people, and some of the hourly rates I have seen are very high. But wages in general are not increasing much.

It’s not really the car expense per se but the fact that you can spend almost a million dollars on one demonstrates that a million isn’t that vast a sum.

To return to my OP, a millionaire in the late 60’s would have struggled to spend 80% of his million on a car. A Shelby GT500 was just $8,000 in 1967 and a Rolls Royce was $19,000.

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