World’s new millionaires getting pinched in 2022
High inflation over the past several months means that $1 million now has the same purchasing power as $1.148 million as of August 2022.
Two-and-a-half million people in the United States became millionaires last year, but thanks to rising prices, that may not mean as much as it used to.
Worldwide, 5.2 million people became millionaires in 2021, according to the Global Wealth Report 2022, an annual release published by Credit Suisse. Including those 5.2 million, 2.5 million of whom are in the U.S., the total number of millionaires globally increased to 62.5 million at the end of 2021.
The total amount of global wealth tallied nearly $464 trillion, which was an almost 10% increase over the prior year, the report says.
While the report shows an overall uptick in household wealth and the number of millionaires around the world, it’s important to note that the data is from 2021 — a year during which the stock markets were riding high and asset values (such as homes) were still at or near record highs.
Conversely, 2022 has not been nearly as kind, as rising interest rates, among other things, have caused the markets to dip into correction and bear-market territories.
All told, the current economy could have knocked some borderline millionaires’ fortunes back into six-figure territory so far this year.
And there’s still inflation to add into the equation, which is running at or near 40-year highs, and which is kneecapping the spending power of Americans from all income levels.
Even for someone who had coffers totaling $1 million in January 2020, high inflation over the past several months means that $1 million now has the same purchasing power as $1.148 million as of August 2022. So even millionaires are feeling the heat.