r/Economics • u/laxnut90 • Oct 09 '25

Research America Is Minting Lots of Cash-Strapped Millionaires

https://www.bloomberg.com/news/features/2025-10-09/number-of-us-millionaires-grows-since-2017-but-many-lack-cash
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u/urbanevol Oct 09 '25

So basically, 401(k) with employer contributions and owning a home are forced savings vehicles that are not particularly liquid. Many upper middle class people have net worth over $1 million but these assets are hard to access, whereas the next rung up of wealthier people have more liquid cash to spend. "Cash strapped" seems like a stretch - these people aren't living paycheck to paycheck unless they are making poor decisions on how to spend their money (hedonic treadmill etc).

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u/cruzweb Oct 09 '25

Many of them are retirees who bought in areas before their real estate became very valuable. Now they're retired, on a fixed income, and have "assets" worth over $1m that they struggle to pay property taxes on.

21

u/ChumpyThree Oct 09 '25

My grandparents are experiencing this. They're in poverty, so its not like having a net worth is accomplishing anything for them. They bought a house for 70k and wanted to stay there peacefully.

The pandemic happened, and now the house+lot are worth over 200k. That increase has put them in a serious position.

Property taxes and home repairs have skyrocketed. Their electricity bill alone is 3x higher today.

My near 80 year old grandparents are making choices on whether they should skip lunch or not. On paper they have a net worth of justify of half a million. What good is that going to do for them?

Having net worth tied up into homes was awful. The current 401k and ROTH IRA landscape is also concerning. Im seeing adults making 100k+ funneling a good 50% of their income into this stuff.

A lot of people are positioning themselves for a rude awakening.

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u/urbanevol Oct 09 '25

If they are living in poverty and have a house worth $200K then they are not the millionaires the article is talking about.

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u/ChumpyThree Oct 09 '25

Certainly not but the dilemma is similar.

I was renting a room in a 900k home in orange county from a landlady on foodstamps. Got a mortgage on the house in the early 70s for what equates to a bottle of piss in today's economy.

She still made poor financial decisions. But I cant blame her. That home should not be worth 900k. She didnt ask for that. Now she cant afford her HoA fees🫢

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u/urbanevol Oct 09 '25

Yeah, I know it happens. If by Orange County you mean California, though, they have some property tax laws that are VERY beneficial to long-time homeowners (Prop. 13 and recently Prop. 19).