A survey released today by TNS Financial Services ranked Los Angeles County, Calif., the wealthiest county in the United States, based on the number of millionaire households.
TNS’ annual survey of wealthy U.S. households is based on a representative national sample of more than 1,800 households with a net worth of $500,000 or more, excluding primary residence.
According to the survey, Los Angeles County has 262,800 millionaire households, which constitutes 23 percent of the state’s wealthiest households, the survey found. Cook County, Ill, came in second with 167,873 millionaire households, followed by Orange County, Calif. (113,299 households); Maricopa County, Ariz. (106,210 households); San Diego County, Calif. (100,030 households); Harris County, Texas (96,593 households); Nassau County, N.Y. (78,816 households); Santa Clara County, Calif. (75,371 households); Palm Beach County, Fla. (69,871 households); and Middlesex County, Mass. (67,552 households).
The number of U.S. millionaire households is on the rise, according to the survey, as the number of households with more than $1 million in net worth (excluding primary residence) rose in 2005 for the third consecutive year. This increase is due to long-term wealth accumulation, not new wealth creation or real estate investments (while real estate continues to be an investment portfolio staple, it is not the sole cause of wealth). Forty-six percent of millionaire households own investment real estate such as a second home, third home, rental properties and undeveloped land. Thirty-four percent have a first mortgage on these residences and 25 percent have second mortgages on these additional residences, the survey reported.
“With the increasing number of millionaire households comes an increasing confidence as over three-quarters of high-net worth households feel they will be financially prepared for retirement,” said Jeanette Luhr, manager of the research study. “These millionaire households understand that calculated risks are still a necessity within their portfolio design, however, over 50 percent have become much more conservative in their investment approach over the past year.”
The mean net worth (not including the primary residence) for these millioniare households is $2.16 million; mean investable assets are $1.44 million, the survey found. The median age for the head of the millionaire household is 58 years old, and almost 45 percent are retired.
Approximately 19 percent own or share ownership of a professional practice or privately held business, the survey found. Nearly 60 percent of millionaire households obtain investment advice from a professional advisor and more than 73 percent prefer to do business at a single institution that brings together targeted specialists and services. When asked to identify their single most important financial goal, the leading response was, “to assure a comfortable standard of living during retirement.”
Less important financial goals on the list include leaving an estate for heirs, protecting estate from taxes, minimizing income and capital gains taxes, improving household liquidity and charitable giving.
The mail-based survey includes additional interviews of households with $1 million or more in investable assets; Hispanics, African Americans and Asians; and the emerging affluent.