The 2017 Stock-Market Rally Minted 700,000 New American Millionaires

Last year, North America lost its status as the region with the highest number of millionaires and billionaires to the Asia-Pacific region - largely due to the rapidly rising inequality in nominally communist China.

HNW

...But even though China is rapidly catching up to the US in terms of the number of ultra-wealthy individuals (not to mention the exasperating breadth of wealth inequality), strong stock-market performance and rising real-estate valuations caused the ranks of American millionaires to expand by a solid 700,000, according to data from the Spectrum Group, via CNBC.

According to Spectrum, the US now has more than 11 million millionaire households, up more than 6% from 2016. The number of new millionaires and the total population of millionaires set records. By Spectrum's definition, millionaire households are those with at least $1 million in investible assets - not including their primary residence.

Of the factors that contributed to this rise, soaring equity values had perhaps the biggest impact. Excluding dividends, the S&P 500 climbed 19% last year.

"It was the equity markets that really pulled these folks up," said George Walper, president of Spectrem Group. "This is the group that has the most equity holdings, so the biggest change is at the high end."

Meanwhile, members of the American working class, who have little or no money invested in the equity market and often rent instead of owning their own homes, found it harder than ever before to support their families and pay their bills without going deeper into debt...

In an interesting twist, the impact of bitcoin's torrid rally (and subsequent crash) was conspicuously absent from the Spectrum Group report.

Working Class

Of course, this is hardly a new trend. To wit: the number of millionaire households has nearly doubled. In 2009, there were just under 6 million millionaire households. It's grown every year since, and is now well past the precrisis level of 9 million millionaires.

As the old saying goes, "it takes money to make money." That's especially true for America's high net worth individuals. Because as Spectrum points out, the richer the individual, the more wealth they saw created this year.

The number of households worth $5 million to $25 million grew by 84,000, to 1.35 million households. The number of households worth more than $25 million jumped by 10 percent, increasing by 16,000 to a total of 172,000.

And barring an all-out stock-market collapse - which, if you listen to Bill Gross, Scott Minerd and handful of other investing luminaries is entirely within the realm of possibility - the wealthiest Americans are bound to see their wealth multiply again in 2018.

"I think people are pretty optimistic," he said. "But a lot has to do with whether the Democrats take the House and whether we see changes in the tax law. But right now I could see a similar increase next year."

In addition to their investment returns, the rich also stand to benefit from a Trump tax reform package that, by many estimates, allots more than 80% of its returns to the top 1%...

Meanwhile, working and middle class Americans are being forced to accept an ever-shrinking piece of the pie...