Here’s Why Being a Millionaire Doesn’t Mean You’re Rich

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If you grew up thinking a million dollars meant yachts, private islands and private jets, well, 2025 has other plans. These days, hitting millionaire status is still impressive — but it doesn’t automatically translate to feeling rich. 

According to the 2025 UBS Global Wealth Report, the U.S. saw the sharpest rise in millionaire numbers globally. Between rising costs, shifting lifestyles and a new definition of what “wealthy” even means, being a millionaire isn’t what it used to be. 

Here’s why the title doesn’t guarantee the life you might imagine.

When You’re Asset-Rich But Cash-Poor

For Michael Benoit, licensed insurance broker and founder of California Contractor Bond & Insurance Services, the concept of a “millionaire” being rich is dangerously outdated, especially in 2025.

“Every day I see owners of businesses who are millionaires on paper. They may have $2 million in assets, including their equipment and their primary residence,” he said.

Benoit explained the problem with this is that these assets are not liquid and are often encumbered by substantial debt. He noted, “They are asset-rich but cash-poor.”

How Your Age and Wealth Structure Shape True Millionaire Status

According to Joseph Favorito, certified financial planner and managing partner at Landmark Wealth Management, whether being a millionaire makes you rich or not depends on your age and the composition of the wealth and where it is held.  

As an example, if you’re 25 years old, and you have a million or more in liquid assets, he said you are well ahead of the average person your age and are very wealthy, relatively speaking.  

“That head start with compounding growth should allow you to live very comfortably throughout your life if you are still working and saving,” Favorito said.

However, if you are 65 years old and want to retire on $1 million in assets, he said that isn’t all that much unless you have other substantial income sources.  

“Financial planning studies show that you can safely spend 4% of your assets during retirement,” Favorito added.

That means a 65-year-old with $1 million in liquid assets can safely generate $40,000 per year increasing with inflation, which isn’t that much income.   

True Wealth Is Not Net Worth

“For me, true wealth is not net worth,” Benoit said. “True wealth means sufficient liquidity and resilience.” 

Meaning that to be “rich,” one must be able to absorb the shocks of financial consequences. So, if one has a million-dollar home, yet only $10,000 in savings, he said one is not rich. 

“You are but a major expense away, such as a lawsuit or medical emergency, from losing that asset,” according to Benoit.

He recommended people stop focusing on net worth and put their energies toward unencumbered assets. 

“Find out how long you can function without an income,” Benoit said. “This number is a much more realistic form of wealth than having a million-dollar valuation.”

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