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June 18, 2013

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1. Retirement assets of 401k,roll over IRA and Roth IRA
2. Wifes Pension MIP and 403B
3. Personal Residence
4. Mutual funds of stocks
5. Mutual funds of bonds
6. College savings plan
7. Cash

retirement assets 65%
cash assets and index funds 20%
house equity 15%

I was surprised at the still relatively high share of personal residence - either most of them are still close to the $2M mark, or they live in expensive real estate areas, or there is lifestyle inflation after all, despite Dr Stanley's findings

1. Retirement accounts
2. Wife's retirement accounts
3. House equity
4. Investment property equity
5. Cash

Cash-poor after purchase of new property, planning to move to taxable investments next.

@Ivy,

These are people who have died so most of them are going to be older and retired. Most likely they have their house fully paid for.

If they have a 300K house and are worth 3 million that's 10% in personal residence. While it may look surprising at first, it makes sense when you consider the demographic.

There really aren't that many people worth $50 million. Most millionaires are small millionaires.

1. Investment property equity
2. Private notes/mortgages
3. Equity in personal residence (bought low fixer-upper at the bottom of market (late '09) and now worth double what we paid based on recent sales in neighborhood)
4. Retirement accounts
5. Cash value of whole life insurance
6. Taxable brokerage accounts
7. Cash
8. Miscellaneous: 529 plan, HSA

1. Personal Residence
2. Investment Property
3. Retirement Accounts
4. Cash

I need more time to build wealth. :)

I found the "Closely held stocks" weird. Had to look up what it actually meant. Is this just basically small businesses? It seems surprisingly high. I guess that means a large percentage of millionaires own their own business?

Also, it's a little confusing to have categories like stocks and retirement accounts because they are usually both stocks. Anyway, here is mine:

1. Stocks
2. Real estate
3. Cash

My stocks are mostly in a retirement account btw.

60% my ad my wife's retirement funds (401k and IRAs)
31% home equity
7% college 529s
3% mutual funds, money markets, cash

(ossessions including cars, jewelry, collectibles not tabulated)

Hah! That last line should be "possessions," not to be confused with obsessions!

Ha! I had read it as obsessions and thought to myself, "ah, well at least he's honest!"

The IRS has the source data here :
http://www.irs.gov/uac/SOI-Tax-Stats-Estate-Tax-Statistics-Filing-Year-Table-1

It LOOKs to me like the numbers in question are gross assets before any liabilities /deductions. The IRS data has all the assets in columns and then has deductions in other columns. Mortgages / debts is one of the deductions. So I think all these % numbers are just the assets not accounting for debts/ mortgages. In other words if an estate with $2M has 10% in housing and thats a $200k house then that does not mean its free and clear but instead may have a mortgage on it.

Apex is right.

Looking at '09 data: About 2/3 of the estates are in the $2-5M range. So its skewed that direction. FOr estates $2-3.5M the personal residence averages 11% of assets. For the largest estates of $20M and up the personal residence is just 2.7%.

@Jim,

You always find interesting data like that. Thanks for posting that link. Looks like the debt for all millionaire estate sizes holds constant at about 3-4% so it turns out to be minimal. If it was significant it could have really skewed the numbers.

My numbers would be drastically skewed because of how much real estate debt I have. My real estate assets actually exceed 100% of my net worth due to debt that I carry on them and make up about 60% of my assets even though they only make up 25% of my net worth when you consider net equity position after debt. So debt can make a big difference in how one's percentages are categorized. I expect all three of those percentages to go up in the next few years as I acquire more real estate with more debt.

Based on millionaires over 2 million, it looks like the percentages work out like this:

$2-5 million: 75%
$5-10 million: 16%
$10-20 million: 6%
Over $20 million: 3%

Given that only 1.8 million people in the U.S. out of over 300 million are worth more than $2 million to begin with:

http://money.cnn.com/2012/03/02/news/economy/wealth_in_America/index.htm

that makes those over $20 million to be quite an exclusive club.

When you say closely held stock, what are you referring to? Sorry everyone, young trader here, just haven't heard "closely held" stock before?

Are they like private deals or something?

And Apex's stat on 1.8 million people out of 300 million was almost hard to believe even after reading the cnn article. Not to be pessimistic but 1.8 even seems like a high figure for the country.

1-publicly traded (never had 401k option, so most savings went here until started business)
2-retirement accts (Sep-ira now allowing this to grow quickly)
3-personal residence (paid for)
4-529s (3 kids)
5-business's cash flow account (maybe thats a 'closely held stock?' i don't know either...)
6-cash

ALL

"Closely held stock" is simply stock (or other membership interest) in a corporation that is NOT publically traded.

@TB,

Are you saying 1.8 million out of 300 million people who are worth $2 million seems high or low?

We should keep in mind that we are looking at estate tax filings here only. So this is just people who have passed away. That would be skewed towards older age people. The asset mix of older people will differ than the asset mix for the entire population. I don't know how different it would be but I'm sure its not the same.

"Closely held stock" in this case probably refers to (a) family-run corporations (b) various types of partnerships or (c) private equity investments (possibly).

Investors have very limited protections in closely-held corporations, so these are not investments one should be buying into from the outside based on dreams of striking it rich.

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