David Pitlyuk

Most of us have all heard this phrase before, right? Reuters reported on Tuesday that the number of households considered “ultra-rich” have boosted up 23%, and there are now over 1 million classified into this category.

What makes you “ultra-rich”?  You have to have a net worth of $5 million, not including your primary residence. Things you can look at are cash, stocks, cars, investment properties, valuables, etc.  The number of households classified in this category went from 930,000 in 2005 to over 1 million in 2006, but that’s not the crazy part.  Just 10 years ago in 1996, there were only 250,000 households that could be considered “ultra-rich” in the US.

So the important question to look at is what has been fueling the net worth growth of the US in the past 10 years?  A large part of that I’m sure has been the crazy spike in real estate value over the last 5 years.  Other factors that tie into economic growth are stock market gains and the market for private companies.  Let’s take Doubleclick for example.  The company was taken private by Hellman & Friedman and JMI Equity in 2005 for $1.1 billion.  2 years later in on April 13th, 2007, Google acquires Doubleclick for $3.1 billion cash.  2 years, $2 billion profit.

Another important thing to note is that “the wealthiest households are business owners”.  I’m not quite in that category just yet, but I’m working my way up there!