You Could Be a Millionaire and Not Realize It—Here's How to Find Out

There's more than one type of millionaire—and you just might be one of them.

According to Credit Suisse, at the end of 2020, "the global number of millionaires expanded by 5.2 million to reach 56.1 million." While this report was encouraging news for the global economy, it also reported that an adult now "needs more than $1 million to belong to the global top 1 percent."

What Makes You a Millionaire, Anyway?

Hitting that coveted seven-figure mark has long been the definition of wealth, but rising inflation and job insecurity seem to keep pushing the goal post further away. As a result, people have gotten equally as creative about defining wealth—and what it means to be a millionaire—more broadly.

Yes, most people who are trying to achieve wealth still want to attain seven figures. But they know that that first million has to lead rather quickly to many more if you're aiming for long-lasting wealth. Financial coaches Anna N'Jie-Konte and Gary Stewart say that anyone aspiring to the millionaire moniker needs to first define for themselves what kind of millionaire they want to be—and only then chase that aspirational goal.

Ahead, these wealth coaches explain the difference between being a cash-flow, net-worth, or asset-value millionaire, and why it is possible that you could be a millionaire today and not even know it.

There are three primary definitions of a "millionaire."

"The most basic definition of a millionaire is somebody who has $1 million," explains Gary Stewart, a financial coach and CPA based in Alexandria, Va. But he says that definition can be misleading when comparing net-worth millionaires, asset-value millionaires, and cash-flow millionaires.

"For example, a cash-flow millionaire is someone who owns assets that pay out (or cash flow) $1,000,000 in a year. An asset millionaire is someone who, if they had to sell everything and pay off any liabilities, would have $1,000,000 left over. A net-worth millionaire is someone who has a net worth of at least $1,000,000. Net worth is a fancy way to say 'what you own minus what you owe.' If that amount ends up being $1,000,000+, you're a net-worth millionaire."

These definitions have distinct differences that affect real wealth calculations. Stewart says net-worth millionaires focus most on real wealth, while a cash-flow millionaire typically would "require a ton of money invested, royalties, profits from a business, or income from real estate. Very few people will become cash-flow millionaires because it takes a lot of work to build a business or portfolio of that magnitude," he explains.

Instead, most Americans are asset millionaires, who own a home that is worth a significant amount of money. Also, they may add retirement and investment accounts together to reach the $1,000,000 threshold. Thus, while it is possible to be a millionaire in all categories, most people would be one kind of millionaire, but not another.

Asset millionaires are rarely ever cash-flow millionaires, since their wealth is held in non-liquid assets. Similarly, net-worth millionaires may never become asset millionaires. Therefore, it is possible to be a millionaire and not realize it, especially if the value of your home or stocks rise without your even knowing it.

Liquidity is why you might not feel like a millionaire, even when you are.

Anna N'Jie-Konte, MBA, CFP, is a Puerto Rican, Gambian-American entrepreneur who spent nearly a decade working in wealth management, advising ultra-high-net-worth families ($5 million+ net worth) how to grow and secure their wealth for generations to come. She says that, similar to reaching a six-figure salary, reaching millionaire status is equally as arbitrary.

"It is not a benchmark of financial success that truly determines whether someone is doing well or not," she explains. Feeling like a million is enough to live well depends much more on a person's lifestyle and financial goals.

N'Jie-Konte argues that financial flexibility and liquidity are a huge part of the feeling of financial security. "These are two of the most under-discussed topics in personal finance—to everyone's detriment," she notes.

"Two people can have the same $1 million net worth, however, one will be much more financially nimble or able to meet life's challenges than the other," N'Jie-Konte explains. "For example, if one person has $1 million in equity in their home and holds a negligible cash or investment portfolio, then it will be quite difficult to access cash for whatever need may arise. Conversely, someone with $400,000 in home equity, $200,000 in a brokerage account, $50,000 in savings, and $350,000 in their 401(k) will have much more flexibility to meet whatever need or opportunity arises."

Being nimble often gives people a sense of comfort—which varies, of course, depending on their life stage, number of dependents, and the financial stability of loved ones. This is why it is possible to be a millionaire but still feel cash-strapped. In fact, many high-net-worth individuals live paycheck-to-paycheck because of their spending habits, debt, and external responsibilities. And the rising costs associated with inflation are another factor that can reduce spending power.

Defining your millionaire roadmap is easier than you think.

Stewart says that people can look like a million bucks, but still be one step away from losing it all. To seek lasting wealth, he says that ordinary people should chart a roadmap to obtain $1 million+ in assets and zero debt.

"To secure your funds and your financial future, it is crucial to have a rainy day fund for emergencies (because life happens), avoid personal debt like the plague (debt steals your income), and continue to invest in good growth investments," he advises.

"Do not strive for perfection," N'Jie-Konte counsels. "Trajectory (moving in the right direction) is much more important than perfection. There is so much shame around personal finance that stops people from making real progress."

In particular, she says that once you've made a choice to prioritize the type of millionaire that you want to be, it is important not to watch the clock. "Humans are inherently impatient and seek instant gratification," N'Jie-Konte continues. "Building substantial wealth sustainably requires time, consistency, and effort. It will happen slower than you would like at first and, after a while, it accumulates quicker than you could have ever imagined."

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  1. Credit Suisse, The Global Wealth Report 2021. Accessed May 8, 2022.

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