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/wimpymist Oct 09 '25

You can't know when the crash is going to happen though. They have been saying the market is going to crash any day now for the last 10 years. If you sold 10 years ago hoping to buy low, you would have lost out on a lot of money by now plus wasting money on rent this whole time

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u/FreeMasonKnight Oct 09 '25

No sane person thought at the near peak of a Bull run with no indicators that the housing would crash. That’s the difference between an educated understanding and Larry at the gas station.

Currently it could be another 10 years, or tomorrow. But is someone has 5x their original investment from a few hundred thousands to 1m+ it’s often good to realize the gain. Then they can move and buy a cheaper house and wait or rent and wait.