Atlanta is also home to the fastest growing millionaire population in the United States. (home equity, accounting)

[Mishap]

Originally Posted by neil0311

Millionaire used to mean that someone's net worth is a million dollars or more.

Not sure why a home with a large amount of equity at current market value is being excluded, and an asset is an asset. They are inventing some kind of new class of asset called an "investable asset" and basing their determination off it alone.

I think it's b/c it's not really liquid as you will always have to find another place to live. Given the report is in the context of the Capgemini Wealth Management Consulting practice, I assume the goal is to advise banks/investment firms where to locate offices for growth. You can have $1M+ in home equity alone but I don't think any sane broker will write you a HELOC and let you roll that into a hedge fund or some other investments. My brother has written some home equity backed loans but generally they have several million with him already and aren't emptying their accounts completely to do some risky deals.

[Pappy&Me]

Originally Posted by FromGA

According to this recent article
JPMorgan chasing more Atlanta millionaires - Atlanta Business Chronicle

Metro Atlanta has 68,000 families with $1 million to $25 million in investable assets, according to data provided by JPMorgan Chase. There are 600 families topping $25 million

I bet most are lawyers and polititions . Lot of lawsuits and crime in Atlanta . But it's still my hometown and I'll always miss it .

[neil0311]

Originally Posted by Mishap

I think it's b/c it's not really liquid as you will always have to find another place to live. Given the report is in the context of the Capgemini Wealth Management Consulting practice, I assume the goal is to advise banks/investment firms where to locate offices for growth. You can have $1M+ in home equity alone but I don't think any sane broker will write you a HELOC and let you roll that into a hedge fund or some other investments. My brother has written some home equity backed loans but generally they have several million with him already and aren't emptying their accounts completely to do some risky deals.

So if I take a mortgage against my million dollars of equity, and then put the cash in a bank account or investment account, then I'm a "real" millionaire? I get the liquidity distinction, and a home isn't as liquid as cash, but it just seems like an unusual stat.

[FromGA]

Originally Posted by neil0311

So if I take a mortgage against my million dollars of equity, and then put the cash in a bank account or investment account, then I'm a "real" millionaire? I get the liquidity distinction, and a home isn't as liquid as cash, but it just seems like an unusual stat.

It may be that way (quantified in liquid assets) because these lists are made by people trying to find people (high net worth individuals) with money to invest. Can invest the cash, but not the untapped equity.

Dont agree with this way of looking at things. Just trying to rationalize...

[Mishap]

Originally Posted by FromGA

It may be that way (quantified in liquid assets) because these lists are made by people trying to find people (high net worth individuals) with money to invest. Can invest the cash, but not the untapped equity.

Dont agree with this way of looking at things. Just trying to rationalize...

I'm not saying those people aren't millionaires...they simply aren't the target demographic for brokerages. It likely follows the guidelines of SEC hedge fund investor qualifications where you must have $1M that can be invested as well as 200-300k annual income. Most people that have $1M total net worth likely have most of it tied up in their homes and wouldn't leverage their nest egg to bet on some crazy quant trading hedge fund that borrows 100:1 and bets on rainy days affecting the Disney World quarterly earnings.

Sure, managing some IRA's, 529's, etc are ok money but people in the hedge fund bracket have much more money and tend to be more active which leads to greater returns (for the broker at least).

[neil0311]

Originally Posted by Mishap

Most people that have $1M total net worth likely have most of it tied up in their homes and wouldn't leverage their nest egg to bet on some crazy quant trading hedge fund that borrows 100:1 and bets on rainy days affecting the Disney World quarterly earnings.

Regardless of assets, most SMART people wouldn't do that either.

[spacelord75]

Originally Posted by neil0311

So if I take a mortgage against my million dollars of equity, and then put the cash in a bank account or investment account, then I'm a "real" millionaire? I get the liquidity distinction, and a home isn't as liquid as cash, but it just seems like an unusual stat.

I don't think so...then you would have the additional liability on your books of the mortgage offsetting that cash.

[neil0311]

Originally Posted by spacelord75

I don't think so...then you would have the additional liability on your books of the mortgage offsetting that cash.

Wrong...I can still sell the house for $1 million (the value of the home secures and offsets the mortgage) PLUS I have the $1 million in cash. The equity doesn't disappear, but I've now made it liquid.

[Mishap]

Originally Posted by neil0311

Wrong...I can still sell the house for $1 million (the value of the home secures and offsets the mortgage) PLUS I have the $1 million in cash. The equity doesn't disappear, but I've now made it liquid.

There's a cost to that liquidity since you'd now have a mortgage on the house. If the house value falls, you've got negative equity you're responsible for. Because its not free and clear (like $1M sitting in a money market), they don't consider it free to invest since there's 5-10% note against that money. A bank would love to take your money...a $1M house to try to offload is a bit less of a draw.

My brother even writes equity backed mortgages/loans for his bigger clients. They may have $5M in equities somewhere but don't want to sell it to buy a house. He'll let them pledge their equities (w/ a certain threshold for a margin call) to get a mortgage on a house w/o bringing any money down. It also lets guys who need to hold stock to retain control lever up w/o loss of voting rights. It's pretty much how Larry Ellison (worth nearly $30B) racked up over $1B in debt bankrolling his lifestyle.

[spacelord75]

Originally Posted by neil0311

Wrong...I can still sell the house for $1 million (the value of the home secures and offsets the mortgage) PLUS I have the $1 million in cash. The equity doesn't disappear, but I've now made it liquid.

But if you are talking about "Net Worth" then the mortgage and the cash net against each other...so you're no richer, per se. Simple accounting: assets-liabilities=equity. Unless there was some part of hypothetical I skipped over...