Millionaires and Billionaires in this World
Have you ever wondered what makes a millionaire or a billionaire? Is it net worth, checking or savings balances, or credit? Is a millionaire in America still a millionaire in the UK? In this post we will explain exactly what a makes a person a millionaire or billionaire.
What is a Millionaire ?
A millionaire is a person who either has a million in their checking or savings account, or a person who owns a million dollars in assets. However, it is important to note that the two are distinguished by the terms 'true' and 'paper'. A true millionaire is a person who currently has a million dollars in cash (not credit). This person either earned a million dollars working or cashing in their assets or stocks. A paper millionaire is a person who currently holds over a million in assets, but hasn't cashed them in (liquidated them). Until the assets are liquidated and the person becomes a true millionaire, they run the risk of losing their assets or the value depreciating.
It's important to remember that a millionaire state side, isn't necessarily considered a millionaire in other countries. This is down to how the U.S. dollar is valued in other countries. In the UK for instance, the pound is worth more than the dollar, so a person with a million U.S. dollars may only have several hundred thousand pounds if the currency is converted.
What is a Billionaire ?
A billionaire is a person who literally has a bank account balance of one billion dollars. If this bank account reaches two billion or more, the person is considered a multi-billionaire. Anyone who owns one billion dollars in assets can still be called a billionaire, although, that person would not be classed as a true billionaire until they liquidate those assets.
It gets a little tricky when someone has a net worth of a billion dollars, but only has a few million in the bank. For the sake of accounting, this person would still be considered a billionaire. However, by definition, the person can be classed as a paper billionaire, or a multimillionaire with a billion in net worth.
As you can see, the only real way to determine if a person is a true millionaire or billionaire is to know whether the funds are in paper or cash. To date, their are currently 1,426 U.S. dollar billionaires, and about 10 million millionaires, according to Wikipedia.