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By the standards of the 18th century, a millionaire was someone who had amassed an unimaginable amount of money. Through global warfare, credit catastrophes, and a dramatic concentration of wealth among a small percentage of people, the 20th century propelled mankind's contemporary obsession with the consumer comforts and luxury brands enjoyed by the rich and famous.
Let's say that John Doe has the following assets:. Let's also imagine that John Doe has the following liabilities:. According to the what you own minus what you owe formula for calculating net worth, John Doe is technically a millionaire.
Thus, John is technically a millionaire. Despite these numbers, an opposing school of thought rejects John's classification as a millionaire, claiming that the value of his home, car, and personal belongings such as his clothing, electronics, or antiques should not count.
This methodology for calculating John's millionaire status assumes that John would be unlikely or unable to liquidate all his assets for cash, even if he wanted to do so.
John needs the house he lives in, the car he drives, and the clothes he wears each day, and thus he cannot readily liquidate these assets. Furthermore, even if they went to market, his antiques may fetch unpredictable resale prices, and valuable artwork is difficult to sell quickly.
Certainly, he can have these assets appraised, and he can leverage them to finance a big purchase, but he doesn't have the liquid assets necessary to be called a millionaire by the contrarian definition.
Those who would argue John is not a millionaire might say only his liquid assets should be considered. These include his mutual funds, stock funds , and cash.
Some people would also count the value of his retirement account —others wouldn't, given that those assets are protected from bankruptcy filings.
Either way, John Doe is not a millionaire once those personal belongings are left out of the equation. Yet another school of thought would adjust the value of John's house, car, and personal possessions.
This kind of wealth analysis would calculate a basic housing allowance for John, and credit any spending beyond this number toward his net worth.
The difference between a multi-millionaire and millionaire comes down to the numbers. With a multi-millionaire, we're talking about someone who has several million units of currency after their net worth is considered.
There is no consensus as to whether or not John Doe is a millionaire, but one thing is certain: he doesn't have a huge amount of cash in the bank.
Most of his money is tied up in housing and investments, and this differentiates him from the super-rich. Just because he has earned the net worth and status of millionaire on paper doesn't mean he can spend as lavishly as an 18th century duke.
The Balance Investing. Full Bio Follow Linkedin. Individual whose net worth or wealth is equal to or exceeds one million units of currency.
For other uses, see Millionaire disambiguation. This section possibly contains original research.
Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research should be removed.
February Learn how and when to remove this template message. For the Lil Pump song, see Multi Millionaire song.
See also: List of countries by the number of millionaires. Main article: American upper class. How to marry a billionaire.
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