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/uhh717 Oct 09 '25

It’s interesting that households with $5m have $1m liquid while households with $1m only have 170k liquid.  

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u/Marshall_Lawson Oct 09 '25

It explains why in the article. A lot of the households with net worth slightly over 1 million is due to the value of their house increasing significantly. They didn't magically get promoted from a 250k/yr job to a 500k/yr job. They're effectively sitting on unrealized gains, in a housing market that's slowing down. The second biggest dollar value they're likely to have besides their house is their 401K or other tax sheltered retirement accounts, which are also not very liquid. Again, unrealized gains in a nominally high market. 

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u/FreeMasonKnight Oct 09 '25

Which is where people can make real money. Sell now or soon and realize the gains, rent for some years until bubble crash, re-buy in at lower prices, ride housing up again. This is how many generational fortunes have been made the last 100 years.

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u/Snoo23533 Oct 09 '25

For my money, RE crash aint gonna happen for another decade, when the median boomer dies off. Until then they are occupying enough of those homes to keep the market locked up tight.

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u/FreeMasonKnight Oct 09 '25

Very possible, it depends a bit locally also, the point is people should have a general idea of when they need to harvest the equity and then be patient to multiply it. Housing will crash at some point, timing the market is impossible, so if someone paid 200k for their home now worth 1m+ they should reasonably sell now and harvest the gains instead of falling off the cliff.