Till now, we have discussed the basic concepts in finance. If you have not seen those posts. You can check them out here. In this post, we will discuss the hidden secrets of millionaire world to understand how millionaires differ from each other. First, let’s start by understanding who is a millionaire.
What is a millionaire?
Any person having more than 1 million USD in invested assets minus liabilities or earning more than 1 million USD in a financial year is considered to be a millionaire. Although the definition seems straightforward, it is not that simple. Even within the millionaire class, there are different types of millionaires, which can often determine a person’s freedom.
I bet you all would have thought that all the millionaires are equal. But it is not so, as we will seee next. There are different ranks of millionaire within the millionaire world. We will know how they differ and which is better.
Networth Millionaire
This is the most straightforward metric. In this, all your assets are included, such as Equity, Bonds, Real Estate, Cash, and Precious Metals (gold and silver). So what is the catch here? Here, all the assets are included, both liquid and illiquid. So if you remove the illiquid assets from the persons calculation they might not qualify as a millionaire.
Some of the Pros of being a Networth millionaire:
- Financial Security: You’re less vulnerable to economic shocks, job loss, or unexpected expenses.
- Freedom of Choice: You can choose how to spend your time—whether that’s traveling, pursuing hobbies, or starting a business.
- Better Access to Opportunities: From exclusive investments to elite education and healthcare, wealth opens doors.
- Generational Impact: You can support family, fund education, or leave a legacy through philanthropy.
- Peace of Mind: Knowing you’re financially stable can reduce stress and improve overall well-being.
Some Cons of being a Networth millionaire:
- Lifestyle Inflation: It’s easy to overspend or feel pressure to “keep up” with other wealthy peers.
- Privacy Concerns: Wealth can attract unwanted attention, from scammers to media scrutiny.
- Relationship Strains: Friends or family may treat you differently, or expect financial help.
- Fear of Loss: The more you have, the more you may worry about losing it—especially in volatile markets.
- Diminished Satisfaction: Once basic needs are met, more money doesn’t always mean more happiness.
Most of the millionaires around the world fall in this category as a major portion of their investements are in illiquid assets. These can be your average everyday people who have accumulated wealth over time through putting a large chunk of their money in illiquid assets.
The Paycheck/ Revenue Millionaire
This is a person who earns one million or more in a year through his paycheck or business. Being a paycheck millionaire (earning over $1M annually through salary or business revenue) is a different beast from simply having a $1M net worth. It’s more about cash flow than accumulated assets.
Some Pros of being a Paycheck millionaire:
- High Liquidity: You have consistent access to large sums of money, making it easier to invest, spend, or pivot quickly.
- Accelerated Wealth Building: With disciplined saving and investing, you can compound wealth faster than net worth millionaires who rely on asset appreciation.
- Greater Influence and Access: High earners often gain access to elite networks, business opportunities, and premium services.
- Career or Business Validation: Earning $1M+ annually often reflects success in a competitive field—whether as a top executive, entrepreneur, or creator.
- Flexibility to Reinvent: With strong revenue, you can fund new ventures, take sabbaticals, or transition careers without financial strain.
Some Cons of being a Paycheck millionaire:
- High Tax Burden: Income taxes can take a significant bite, especially in high-tax jurisdictions.
- Lifestyle Pressure: The temptation to overspend or maintain a high-status lifestyle can erode long-term wealth.
- Burnout Risk: Many high earners work intense hours or face constant pressure to perform.
- Income Volatility: Entrepreneurs and freelancers may face feast-or-famine cycles, making budgeting tricky.
- Less Passive Security: Unlike net worth millionaires who may live off investments, paycheck millionaires often need to keep earning to maintain their lifestyle.
Since this is status based on income it attracts a large amount of tax and is taxed higher as compared to someone earning the same amount through assets. These people are very few in number. These are typically C-suite people and top level executives or business owners.
The Liquid Asset Millionaire
This is the most interesting type of millionaire. This person has net investable liquid assets worth 1 million or more. Being a liquid net worth millionaire—someone whose wealth is mostly in cash or assets that can quickly be converted to cash—is a unique financial position with distinct advantages and challenges.
Some Pros of being a Liquid Asset/ Networth Millionaire:
- High Flexibility: Liquid assets like cash, stocks, or money market funds can be deployed instantly for investments, emergencies, or opportunities.
- Strong Financial Resilience: Easier to weather economic downturns, job loss, or unexpected expenses without selling illiquid assets like real estate.
- Quick Decision-Making: You can act fast on time-sensitive deals, like buying undervalued assets or funding a startup.
- Lower Risk of Forced Sales: No need to offload property or long-term holdings during cash crunches.
- Better Negotiating Power: Sellers and investors often favor buyers with liquid capital, especially in competitive markets.
Some Cons of being a Liquid Asset/Networth Millionaire:
- Lower Returns: Cash and liquid assets typically yield less than long-term investments like real estate or private equity.
- Inflation Erosion: High cash holdings lose purchasing power over time unless actively managed.
- Temptation to Overspend: Easy access to money can lead to impulsive purchases or poor financial discipline.
- Tax Exposure: Frequent trading or high-interest income may trigger larger tax liabilities.
- Underutilized Capital: Without strategic deployment, liquid wealth may sit idle instead of compounding effectively.
These people are also very few in number as very people can accumulate liquid assets due to their obligations and circumstances.
The Deca Millionaire
People having more than 10 million USD in investable assets are referred to as decamillionaires. Being a decamillionaire—someone with a net worth of at least $10 million—places you in a rare financial tier with unique advantages and challenges.
Some Pros of being a Deca Millionaire:
- True Financial Independence: You can live comfortably without relying on active income, thanks to diversified investments and passive cash flow.
- Access to Elite Opportunities: From exclusive investment vehicles (like private equity or hedge funds) to luxury travel and education, your wealth opens doors.
- Generational Wealth Planning: You can fund trusts, endowments, or legacy projects that benefit your family or community for decades.
- Philanthropic Impact: With substantial resources, you can support causes you care about in meaningful ways—whether through foundations or direct giving.
- Freedom to Pursue Passions: Whether it’s art, travel, startups, or research, you can explore interests without financial constraints.
Some Cons of being a Deca Millionaire:
- Complex Wealth Management: Managing $10M+ requires professional help—estate planning, tax optimization, legal structures, and risk mitigation.
- Privacy and Security Risks: Wealth attracts attention, making you a target for scams, lawsuits, or unwanted publicity.
- Social Isolation or Pressure: Friends and family dynamics may shift, and expectations for financial support or lifestyle conformity can increase.
- Fear of Loss or Legacy Failure: The stakes are higher—poor decisions can erode wealth, and legacy planning becomes emotionally and strategically complex.
- Lifestyle Inflation: With more money comes the temptation to overspend or chase status, which can undermine long-term goals.
These people are very few in number.
The Centimillionaire
People having more than 100 million USD in investable assets are referred to as centimillionaires. Being a centimillionaire—someone with a net worth of at least $100 million—is a rare financial status that comes with immense power, but also unique challenges.
Some Pros of being a Centimillionaire:
- Global Financial Freedom: You can live anywhere, invest anywhere, and operate across borders with ease.
- Access to Ultra-Exclusive Investments: Think private equity, venture capital, art funds, and direct stakes in companies.
- Legacy and Impact: You can shape institutions, fund major philanthropic efforts, and influence policy or culture.
- Multi-Generational Wealth Planning: With proper structures (trusts, family offices), you can secure your family’s future for generations.
- Second Citizenship and Mobility: Many centimillionaires invest in citizenship-by-investment programs to gain global mobility and tax advantages.
Some Cons of being a Centimillionaire:
- Complex Wealth Management: Requires a team—lawyers, tax advisors, investment managers, and security experts.
- Visibility and Vulnerability: You become a public figure in financial circles, which can attract scrutiny, envy, or threats.
- Isolation and Trust Issues: Relationships may be strained by money—whether from expectations, jealousy, or fear of exploitation.
- Succession and Legacy Stress: Planning for heirs, governance, and values transfer becomes emotionally and legally complex.
- Regulatory and Tax Exposure: Your wealth spans jurisdictions, making compliance and optimization a constant challenge.
Refer to the image below to understand the positioning of the different millionaire class in the millionaire wealth pyramid.
This is all for this post. Hope you got to learn something new from this post. Don’t forget to follow my Facebook and Instagram pages for regular updates. See you all in the next post. Till then, keep learning.