You now need a net worth of $5.8 million to be among the richest 1% of Americans, report finds (2024)
With daily headlines about buying yachts, attempting space travel, and dodging taxes, billionaires like Jeff Bezos and Elon Musk have become synonymous with wealth—and wealth creation. But it takes far, far less to be counted among the richest of the rich in the U.S. In fact, a few million will do.
That’s according to the 18th edition of the Wealth Report from Douglas Elliman and real estate agency and consultancy group Knight Frank, which looks at wealth distribution around the globe and offers advice to high-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals, defined by the report as those with at least $1 million and $30 million, respectively.
To break into the hallowed 1%, an American needs $5.8 million, up from last year’s $5.1 million (inflation comes for us all). That places the U.S. fourth globally in terms of assets needed to break ahead of 99% of the population. It’s worth noting that other estimates put the average wealth of the 1% much higher, though it’s calculated differently.
The toughest country to join the ranks of the richest? Monaco, where it takes $12.9 million, or more than double what’s required in America. Luxembourg and Switzerland also outpace the U.S., with $10.83 million and $8.5 million needed, respectively, to crack the top 1%.
Each year, Knight Frank's report looks at where the world's richest live and how they spend and invest their money. It also provides insight from hundreds of wealth advisors and bankers on investment opportunities and challenges.
Last year, rising interest rates and other geopolitical factors led to the total wealth held by the richest households falling by 10%, Knight Frank found. That led to the number of global UHNW individuals shrinking by 4%.
But things are looking up this year for the 1% of the 1%. Portfolios have recovered, and the number of UHNW individuals globally rose 4.2%, to 626,619. The Middle East and the U.S. saw the biggest gains, primarily driven by the strong U.S. economy and recovering equity markets, the report notes.
And 2022 was something of an anomaly, as far as wealth trends are concerned: The decline came after a record year in 2021, when the population of the ultrawealthy grew by more than 9%, according to Knight Frank.
As they amass ever more money, the face of the world's wealthiest is also on the precipice of major change: The coming Great Wealth Transfer will see some $90 trillion in assets change hands over the next two decades in the U.S. alone, meaning affluent millennials will become "the richest generation in history."
Younger individuals, and more women, counting themselves among the wealthiest may create a "seismic shift" in how wealth is used. For example, far more younger affluents are worried about climate change, and view their wealth as a tool for change.
"Gen Z in particular are looking for ways to invest in alignment with their values," Mike Pickett, director of U.K. wealth management firm Cazenove Capital, says in the report. "It’s not just about financial returns, it’s about building cultural capital."
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Americans need a minimum net worth of $5.8 million to be in the top 1% of US wealth. Monaco has the highest net worth cutoff for the top 1% at nearly $12.9 million. The number of ultra-high net worth individuals globally is expected to surge by 28% by 2028.
In the U.S., it may take you $5.81 million to be in the top 1%, but it takes a minimum net worth of $30 million to be considered among the ultra-high net worth crowd. As of the end of 2023, this ultra-high net worth population is on the rise, reaching 626,000 globally, up from just over 600,000 a year earlier.
According to the latest findings from the 18th edition of the Wealth Report by Douglas Elliman and Knight Frank, a person needs $5.8 million to be considered in the wealthiest 1% — a figure that, while substantial, is a far cry from the billionaire benchmark. Don't Miss: Are you rich?
In the United States specifically, the forthcoming 2024 wealth report by Knight Frank reveals that individuals aiming to join the prestigious top 1% now need to possess a minimum net worth of $5.8 million. This marks a notable 12% increase from the previous year's requirement of $5.1 million.
The most recent data from the Fed's Survey of Consumer Finances took a snapshot of the American public at the end of 2022. At that point, a net worth of $3,795,000 was enough to put you in the top 5% of all American households.
The upper class starts with an average net worth of $793,120. That's for the top 80% to 90% of earners. The top 10% has much more -- an average net worth of $2.65 million. The upper-middle class has an average net worth of $300,800.
Some sources define the upper middle class as anyone making a lot of money but haven't crossed the threshold to become truly wealthy. These individuals often have a net worth of at least $500,000 to $2 million.
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
According to this year's report, Monaco leads with $12.9 million required to join the 1% club. Currently, more than 30% of Monaco's estimated 38,000 residents are millionaires. Luxembourg follows at $10.8 million, with Switzerland at $8.5 million securing the third position. The U.S. ranks fourth at $5.8 million.
According to Credit Suisse, individuals with more than $1 million in wealth sit in the top 1 percent bracket. The billionaire class is $2.6 trillion richer than before the pandemic, even if billionaire fortunes slightly fell in 2022 after their record-smashing peak in 2021.
According to Schwab's 2023 Modern Wealth Survey, Americans perceive an average net worth of $2.2 million as wealthy. Knight Frank's research indicates that a net worth of $4.4 million is required to be in the top 1% in America, a figure much higher than in countries like Japan, the U.K. and Australia.
Household wealth or net worth is the value of assets owned by every member of the household minus their debt. The terms are used interchangeably in this report. Assets include owned homes, vehicles, financial accounts, retirement accounts, stocks, bonds and mutual funds, and more.
To be considered very high net worth, one might need assets ranging from $5 million to $10 million, while an ultra-high net worth status could require $30 million or more. These figures underscore the subjective nature of financial classifications across different thresholds of wealth.
In the United States, the concept of being rich is often a subject of discussion, curiosity and, sometimes, aspiration. Charles Schwab's 2023 Modern Wealth Survey provides insights into this topic, revealing that the average American equates being wealthy with a net worth of approximately $2.2 million.
Specifically, those with over $1 million in retirement accounts are in the top 3% of retirees. The Employee Benefit Research Institute (EBRI) estimates that 3.2% of retirees have over $1 million, and a mere 0.1% have $5 million or more, based on data from the Federal Reserve Survey of Consumer Finances.
Top 2% wealth: The top 2% of Americans have a net worth of about $2.472 million, aligning closely with the surveyed perception of wealth. Top 5% wealth: The next tier, the top 5%, has a net worth of around $1.03 million. Top 10% wealth: The top 10% of the population has a net worth of approximately $854,900.
The 95th percentile, with a net worth of $3.2 million, is considered wealthy, facilitating estate planning and possibly owning multiple homes. The top 1%, or the 99th percentile, has a net worth of $16.7 million and represents the very wealthy, who enjoy considerable financial freedom and luxury.
You now need a net worth of at least $5.8 million in order to be part of that small but elite group, according to the upcoming 2024 wealth report from Knight Frank. That is a notable 12% increase from the $5.1 million needed just one year ago.
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