Best and Worst States at Minting Millionaires Since the Financial Crisis
The 10-year bull market in stocks and longest economic expansion in U.S.
The 10-year bull market in stocks and longest economic expansion in U.S. history have minted many a millionaire since the darkest days of the Great Recession.
A decade ago, less than 1 in 20, or 4.9%, of all U.S. households were considered to be millionaires, according to Phoenix Marketing International, which tracks the affluent market. That means they held at least $1 million in investable assets, such as cash, stocks, bonds and funds, among other types of investments. Real estate such as the family home, employer-sponsored retirement plans and business partnerships don’t count.
Cut to today, and 6.2% of all U.S. households are millionaires. In raw numbers, the nation’s ranks of millionaires grew by more than 2 million over the past 10 years.
Naturally, the gains haven’t been distributed evenly. Although every state and the District of Columbia has more millionaire households today than it did in 2008, some areas of the country are gaining millionaires as a percentage of total households at a much faster clip than others.
Kiplinger.com annually ranks all 50 states plus Washington, D.C., by their respective concentrations of millionaires. In the most recent tally, New Jersey leapfrogged long-time leader Maryland for the top spot. Nearly 9% of New Jersey households are millionaires vs. 8.9% for Maryland, which led the country in millionaires as a percentage of households from 2011 through 2017 before slipping to fourth place.
That got us thinking: How have state millionaire concentrations shifted since the financial crisis? Here, we look at the five best states that have risen through the millionaire rankings since the Great Recession … and the five that have experienced the biggest dropoffs.
Data provided by Phoenix Marketing International, U.S. Census Bureau and St. Louis Federal Reserve. Ranking changes based on data between 2008 and 2018.
Best States, #5: Washington, D.C.
- Millionaires ranking 2018: 2
- Millionaires ranking 2008: 8
- Change: +6
The first state on this list is ... not a state. Washington, D.C., jumped six spots over the past decade when it comes to millionaires in its midst. Today, 8.9% of the capital’s households are millionaires vs. just 5.7% a decade ago. The increase in millionaire households propelled D.C. to the region with the second-highest concentration of millionaires in the U.S., up from eighth. (In fact, for most of the past decade, D.C. actually ranked 10th in millionaires.)
Washington has long been a magnet for the highly educated seeking high-powered jobs. PMI’s Thompson attributes the big leap D.C. has taken recently to several factors, “including increased property prices and movement of skilled workers to the area.”
The downside is that you need a hefty paycheck to live there. Rents and mortgages are more than double the national average, making the nation’s capital one of the most expensive cities in the U.S.
Best States, #4: Washington State
- Millionaires ranking 2018: 11
- Millionaires ranking 2008: 18
- Change: +7
Washington State has slowly climbed up the state millionaire rankings over the past few years, helped by Seattle’s booming economy and real estate market. Although they have cooled off lately, Seattle home prices have risen more than 40% since 2008. The metro area’s total gross domestic product expanded by nearly 50% over the same time frame. And by population growth, Seattle has been America’s fastest-growing city this decade.
Washington is among the best states as far as big corporate presence is concerned. Mega-companies Amazon.com (AMZN) and Microsoft (MSFT) are headquartered in the state, which helps explain a good chunk of the Seattle area’s growth in wealth. Starbucks (SBUX), Costco (COST) and Boeing (BA), the last of which operates two enormous manufacturing facilities in Washington, also add dynamism to the region’s economy.
Meanwhile, tiny Oak Harbor, Washington, has one of the highest concentrations of millionaires of any small town in America.
Best States, #3: Utah
- Millionaires ranking 2018: 18
- Millionaires ranking 2008: 26
- Change: +8
Utah has climbed from the middle of the pack to a top 20 state for millionaires per capita. Almost 6.4% of Utah’s households have more than $1 million in investable assets – a figure that’s been driven mightily by Summit Park.
From skiing to luxury shopping to world famous film festivals, the Summit Park micro area has everything a millionaire could ask for and more. Park City, which is part of the micro area, hosts Robert Redford’s Sundance Film Festival and also boasts several world-class ski resorts. No wonder this part of the Beehive State has one of the highest concentrations of millionaire of any small town in the U.S.
Frito-Lay, which is owned by PepsiCo (PEP); Autoliv (ALV); and L3 Communications, a subsidiary of CenturyLink (CTL) are just three of Utah’s more notable large employers helping to drive the state’s economy.
Best States, #2: Texas
- Millionaires ranking 2018: 19
- Millionaires ranking 2008: 30
- Change: +11
Texas has zoomed up the millionaire ranking over the past decade, jumping 11 places to No. 19 from an also-ran No. 30. Some of that’s due to Austin’s fortunes. The state capital has been the fastest-growing big metropolitan area in the U.S. for eight years running.
Amazon.com, Apple (AAPL) and Facebook (FB) are just a smattering of high-paying tech companies with offices in the Austin area. At the other end of the population spectrum, the Lone Star State boasts two of the smallest towns with the most millionaires in the U.S.: Andrews and Fredericksburg.
Fredericksburg is attractive to millionaires for much the same reason as Summit Park, Utah. Situated in glorious Texas Hill Country, Fredericksburg offers a combination of outdoor activities and fine dining, concerts and art shows. Andrews sits smack dab in the state’s oil-rich Permian Basin, where explosive growth in shale oil production has minted many a millionaire in the past decade.
Best States, #1: North Dakota
- Millionaires ranking 2018: 21
- Millionaires ranking 2008: 46
- Change: +25
Speaking of the oil patch, no state has benefitted more in the millionaire rankings thanks to shale than North Dakota.
The explosion in shale oil drilling has lifted the state by 25 spots in the national millionaire rankings over the past decade. Indeed, small towns such as Dickinson and Williston, located in the oil-rich Bakken Formation, have some of the highest concentrations of millionaires in the U.S. Last year, as oil prices reached multiyear highs for several months, North Dakota enjoyed record-breaking oil production – and it’s back to reaching new heights this year.
Before the Great Recession, 3.9%, or 10,148 of all North Dakota households, were millionaires. Today that figure stands at 5.9%, or 19,248 millionaire households. Put another way, the ranks of North Dakota’s millionaires grew by 90% since 2008.
Worst States, #5: Hawaii
- Millionaires ranking 2018: 6
- Millionaires ranking 2008: 1
- Change: -5
Don’t feel too bad for Hawaii. The Pacific paradise still punches well above its weight when it comes to millionaires living in its midst. The Kapaa micropolitan area, which includes the entirety of Kauai, Hawaii’s fourth-largest island, has one of the highest concentrations of millionaires in the country.
Honolulu likewise has a large concentration of millionaires, drawn by Hawaii’s pristine beaches, lush forests, soaring mountains and incomparable ocean views. That said, Hawaii has been leapfrogged by a number of states in the millionaire’s rankings over the years. It held the No. 1 spot for four years, from 2008 through 2011, before being overtaken by Maryland. It has drifted a bit lower ever since.
It’s not so much that Hawaii has lost its appeal for millionaires; the continuing popularity of Kapaa and Honolulu with the wealthy is proof enough. It’s more that cities such as greater Washington, D.C., the New York metro area and Greater Boston have added millionaires at a faster pace.
Worst States, #4: Alabama
- Millionaires ranking 2018: 40
- Millionaires ranking 2008: 46
- Change: -6
Alabama has never really been considered among the best states for high millionaire concentrations, and that’s truer now than ever. The Yellowhammer State fell six positions in the millionaires list from 2008 to 2018. Ranked in 46th place, Alabama beats only Idaho, Kentucky, Arkansas, West Virginia and Mississippi for its concentration of millionaires. North Dakota, Tennessee and Oklahoma are just three of the states that have lapped Alabama in the millionaire race over the past decade.
Alabama has lagged the rest of the country in terms of economic growth since the Great Recession. The state’s gross domestic product grew 28% from 2008 to 2018. That sounds good, until you realize the U.S. economy expanded 38% over the same time span.
Worst States, #3: Florida
- Millionaires ranking 2018: 25
- Millionaires ranking 2008: 13
- Change: -12
When the housing bubble burst, few states took a bigger beating than Florida. That helps explain why the Sunshine State fell 12 spots on the rich list since 2008, to 25th place from a lofty 13th place years ago.
The hangover from the housing crisis weighed on Florida’s economy for years. GDP expanded just 14% from 2008 to 2018. Florida is the third-most populous state. Yet only 5.5%, or 454,878 households out of 8,314,234, qualify as millionaires.
That said, there are several pockets of wealth. Key West is a small town that boasts one of the highest concentration of millionaires in the U.S. The Villages – billed as America’s premier active adult retirement community located in sunny central Florida – also has a high concentration of millionaires.
Worst States, #2: New Mexico
- Millionaires ranking 2018: 45
- Millionaires ranking 2008: 32
- Change: -13
Los Alamos sounds like an unlikely place to find a lot of millionaires, but we’re talking about the concentration of millionaire households, not the total number of millionaires. And on that relative basis, Los Alamos really stands out.
The tiny town about 35 miles northwest of Santa Fe is home to a government nuclear weapons laboratory and a number of chemists, engineers and physicists. It’s a small area with a small population but a large percentage of highly educated and highly trained engineers and scientists.
But the ranks of millionaires thins out once you get past Los Alamos. With only 4.6% of its total households claiming millionaire status, New Mexico dropped 13 places in the rich-people rankings since the Great Recession.
Worst States, #1: Nevada
- Millionaires ranking 2018: 35
- Millionaires ranking 2008: 17
- Change: -18
No state fell farther on the list of states with the highest concentration of millionaire households than Nevada. The Silver State tumbled 18 places since 2008, to 35th from 17th. It currently claims 56,748 millionaire households out of 1,115,122 total households – a bit more than 1 in 20.
Gardnerville Ranchos remains a favorite hiding place for millionaires because of its proximity to Lake Tahoe, which has long been a getaway for the rich and famous. With everything from ski resorts to beaches, the Lake Tahoe area offers year-round activities for well-heeled tourists and full-time residents alike. At the same time, Henderson and Las Vegas are two of the fastest-growing cities in the U.S., according to the U.S. Census Bureau.
But Nevada as a whole hasn’t kept up pace with the rest of the country when it comes to having millionaires among its ranks. That’s in part because the state’s economy grew 28% from 2008 to 2018 – much slower than the national growth rate.