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In Boston, Nearly 1 in 20 Households are Millionaires
The Boston Globe ^ | January 1, 2006 | Sasha Talcott

Posted on 01/01/2006 4:29:56 PM PST by HostileTerritory

The number of millionaires living in the Boston area, already one of the wealthiest regions in the United States, will surge 50 percent over the next five years, according to data from two wealth management companies that have studied the issue.

For a city that as recently as 30 years ago struggled with a decaying urban core, the expected influx is one more sign of its dramatic turnaround. By 2009, the number of millionaire households in the region is expected to increase to 88,000, up from 58,000 in 2004.

The projected growth rate parallels the national average. But because Boston starts out with a higher percentage of millionaires in its population -- nearly one in 20 households, more than New York, Chicago, and Los Angeles -- and because the overall population is barely growing, demographic specialists expect more impact here.

The wealth surge will shape the future of the region and the quality of life in Boston, both for future millionaires and those who are nowhere close. Already, businesses catering to the wealthy are flocking to the city: Steakhouse Smith & Wollensky, where the average evening diner spends $72, opened in the Back Bay in 2004. Financial services companies Northern Trust and Bank of New York recently set up new offices here to serve the wealthy, while Bank of America Corp. moved its global wealth and investment management division to Boston.

(Excerpt) Read more at boston.com ...


TOPICS: Culture/Society; US: Massachusetts
KEYWORDS: boston; census; economy; massachusetts; millionaire; millionaires
A counterpart to the recent articles about Massachusetts' declining population. The economy here is booming, and upper middle class people are doing better than ever. However, middle class families and working class families can't afford homes, and many of them are leaving for the South or West while we draw in childless educated "Cheers" fans from all over the country and immigrants.
1 posted on 01/01/2006 4:29:58 PM PST by HostileTerritory
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To: HostileTerritory

How do they hide it?


2 posted on 01/01/2006 4:31:04 PM PST by boomop1
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To: HostileTerritory

That explains a lot...the white liberal guilt must be off the charts in Boston...


3 posted on 01/01/2006 4:34:27 PM PST by KingKenrod
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To: KingKenrod

Indeed it is. Some of the zip codes mentioned in this article have very high Democrat voting tendencies, particularly for federal office... although it should be said that a few other well-off suburbs are about the only part of the state that vote regularly Republican, along with Springfield's suburbs and a few towns in the middle of the state.


4 posted on 01/01/2006 4:35:52 PM PST by HostileTerritory
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To: HostileTerritory
The Kerrys and the Kennedys... The people's millionaires
5 posted on 01/01/2006 4:36:11 PM PST by Liberty Valance ("Can't hide Freedom's song." ~ Starwise)
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To: HostileTerritory

When the average house costs $500,000, you will get a large portion of that million just by hanging on to your house and riding the equity wave.


6 posted on 01/01/2006 4:36:48 PM PST by keithtoo (Leftists/Democrats - Traitors, Haters and Vacillators)
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To: KingKenrod

Pull-up-the-ladderers.


7 posted on 01/01/2006 4:39:08 PM PST by vbmoneyspender
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To: keithtoo
When the average house costs $500,000, you will get a large portion of that million just by hanging on to your house and riding the equity wave.

My thought exactly. These are "net worth" millionaire households, right? So that means that the FMV of your residence is counted--a value that is theoretical. IF there is a residential RE bubble, and IF it bursts, I suspect the number of "millionaires" will drop precipitously.

8 posted on 01/01/2006 4:40:31 PM PST by mondonico (Peace through Superior Firepower)
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To: HostileTerritory
while Bank of America Corp. moved its global wealth and investment management division to Boston

They bought Bank Boston or whatever BayBank turned into. They are definitely catering to the old wealthy geezers in the suburbs. You know, the people who whine about spending $20 a presription but have $500k in savings and owe nothing on their million dollar house. Like to have their egos stroked so BoA has greeters trained to remember names.

9 posted on 01/01/2006 4:41:43 PM PST by palmer (Money problems do not come from a lack of money, but from living an excessive, unrealistic lifestyle)
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To: HostileTerritory
However, middle class families and working class families can't afford homes, and many of them are leaving for the South or West while we draw in childless educated "Cheers" fans from all over the country and immigrants.

Another thing that happens is that house you bought a few years ago for $150,000 on Boston's south shore will now sell for $300,000 plus.

Retired people will sell, pay off the small mortgage(if they even have one) and head south or west with a bundle of cash to the warmer weather and much cheaper housing. And have plenty of money left over to put in the bank or other use.

You don't gain anything by selling and then buying locally since you will pay through the nose for another house in the same town. - Tom

10 posted on 01/01/2006 4:46:13 PM PST by Capt. Tom (Don't confuse the Bushies with the dumb Republicans - Capt. Tom)
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To: mondonico; keithtoo
Certainly that's a factor, but I'm intrigued by the predictions of numbers increasing a lot over the next five years. House prices have stopped rising in Boston and no one expects them to go up like they have been, so this prediction doesn't count on people becoming millionaires from equity. I think that the increased equity means people who owned their homes have more disposable income and can borrow cheaply against their equity. And for as much as housing has inflated, not many homes are actually worth $1 million; it's more likely to see small capes going for $449k and plain colonials asking $750k.

Anecdotally, it sure seems like there are more people making good money in town and the carriage trade is opening its doors to serve them.
11 posted on 01/01/2006 4:46:39 PM PST by HostileTerritory
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To: Capt. Tom

Yes, I'm lucky I bought before the boom began but I'm also paralyzed because trading up means a much bigger mortgage.


12 posted on 01/01/2006 4:47:25 PM PST by HostileTerritory
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To: mondonico
So that means that the FMV of your residence is counted--a value that is theoretical. IF there is a residential RE bubble, and IF it bursts, I suspect the number of "millionaires" will drop precipitously.

First of all,the assumption that the typical house in the areas mentioned is $500K is incorrect.Anything bigger than a gargle in any of these towns will go for a million or more.

As for the real estate bubble,Boston is seen as one of the most overheated,overvalued markets in the country.Add to that the fact that Greater Boston represents at least 66% of the states population and that Massachusetts is one of three states that is *losing* population and I think it's safe to say that in a few years there'll be far fewer millionaires in the Boston area.

13 posted on 01/01/2006 4:51:12 PM PST by Gay State Conservative
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To: HostileTerritory

Whew, Kerry just made it in considering he's part of a millionaire's household.


14 posted on 01/01/2006 4:53:01 PM PST by mtbopfuyn (Legality does not dictate morality... Lavin)
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To: HostileTerritory
I bought my house outside of Hartford CT in 1983, paid it off in 1999 and now it's worth about 6 or 7 times what I bought it for. In a few years, I hope to sell it and buy two condos, one up north of here and one in the southwest.

If one figures housing equity as part of a retirement plan, make sure it's the housing portion of the retirement plan so that as the market rises or falls your investment and future purchase plan will rise or fall together.

15 posted on 01/01/2006 4:58:17 PM PST by muir_redwoods (Free Sirhan Sirhan, after all, the bastard who killed Mary Jo Kopechne is walking around free)
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To: HostileTerritory
And for as much as housing has inflated, not many homes are actually worth $1 million; it's more likely to see small capes going for $449k and plain colonials asking $750k.

Where are you located if I may ask? In the towns/areas specifically mentioned on the map that goes with this piece, colonials start at a million.For example,the house in which I grew up (in Waban) is now assessed by the City of Newton for 1.1 million,which means that it could sell for at least 1.3 This house,while nice and located in a very nice neighborhood,is anything but luxurious!

My Dad paid $34K for that house in the late 50's.

16 posted on 01/01/2006 5:00:27 PM PST by Gay State Conservative
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To: HostileTerritory

One in twenty in Boston are millionaires...and 19 out of those twenty are democrats.


17 posted on 01/01/2006 5:05:07 PM PST by Supernatural (All the truth in the world adds up to one big lie! bob dylan)
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To: HostileTerritory
Inflated housing costs and increased equity is likely where these notions come from.

In Massachusetts property taxes are restricted to 2.5% increases each year. The way the tax man has around that is too increase the values, and constantly reassess property.

There are houses in sections of Boston assessed at close to a million dollars, and you'd have to pay me ten times that to ever even consider moving back into that city where I was raised. On the other hand, some folks actually do like it there.
18 posted on 01/01/2006 5:11:18 PM PST by Radix (Senator Kennedy actually criticized the President for acting as if he is above the Law!)
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To: Radix
In Massachusetts property taxes are restricted to 2.5% increases each year. The way the tax man has around that is too increase the values, and constantly reassess property.

The valuation is supposed to approximate market value, and with the hot RE market of the last few years, the tax man has done exactly that. The other way, practiced in a number of the well-off suburbs, is to pass over-rides for the "emergency" budget items that seem to crop up more often than not. They usually pass: "Its for the schools -- its for the children and it keeps our property values up." Maybe so, but more efficient use of funds doesn't seem to ever be the preferred solution.

19 posted on 01/01/2006 5:23:43 PM PST by Pearls Before Swine (Is /sarc really needed?)
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To: Pearls Before Swine
pass over-rides for the "emergency" budget items that seem to crop up more often than not.

With the state's population on the decline, there are less people to pay taxes. The natural trend will be for taxes to continue to escalate, compounding and increasing the exodus.

20 posted on 01/01/2006 5:29:54 PM PST by Go Gordon (I don't know what your problem is, but I bet its hard to pronounce)
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To: HostileTerritory

This makes me feel so much better that I contributed my part of the 14 Billion for the Big Dig so these poor people can make their way around town.


21 posted on 01/01/2006 5:40:13 PM PST by digger48
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To: HostileTerritory

Wow! If I move to Boston I will have a 1 in 20 chance in being a millionaire. I like those odds. Boston here I come.


22 posted on 01/01/2006 5:42:05 PM PST by BipolarBob (Yes I backed over the vampire, but I swear I looked in my rearview mirror.)
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To: Gay State Conservative

I live in Somerville, but I wasn't referring to my town, I was thinking of some of the older suburbs like Burlington and Sharon and Norwell. My numbers may well be off, because I'm not in the suburban market, but wouldn't you agree that Newton tends to the other extreme because it's so close to the city, is on the T, and has so many neighborhoods of unique houses?


23 posted on 01/01/2006 7:16:06 PM PST by HostileTerritory
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To: Go Gordon

You know, I don't think the state's adult population is on the decline--but I can easily believe the population of young people is. We all pay lower taxes here because we have fewer children to educate. College kids, 20 somethings, and DINKs are a net plus for the government even if you can't build a society out of them.


24 posted on 01/01/2006 7:17:53 PM PST by HostileTerritory
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To: HostileTerritory
We all pay lower taxes here because we have fewer children to educate.

Schools are one thing (although reduced class sizes may not mean less schools, teachers, principals etc), but the cost of police departments, fire departments, highways and other infrastructures are quazi-fixed costs where the less people contributing means the contribution is larger.

25 posted on 01/01/2006 7:31:53 PM PST by Go Gordon (I don't know what your problem is, but I bet its hard to pronounce)
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To: HostileTerritory

Someone suggested we redefine "millionaire" to mean someone who makes a million dollars a year, because with so many home equity millionaires around these days the term doesn't mean much. You can be one and still have trouble paying the property tax bills.


26 posted on 01/01/2006 7:34:34 PM PST by Mr. Jeeves ("When government does too much, nobody else does much of anything." -- Mark Steyn)
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To: HostileTerritory

As of 20 years ago or so, Newton, Mass. had the 3rd highest per capita income in the USA! I wish I could back that up with a link, but it is just from memory that I know this.

That would be behind Beverly Hills, Ca. and Greenwhich, Ct. at the time. Things have changed for sure, but Newton is defintely high income, and is not part of the city of Boston.


27 posted on 01/01/2006 8:01:16 PM PST by Radix (Senator Kennedy actually criticized the President for acting as if he is above the Law!)
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To: Go Gordon

Yes, but a town with 1000 adults and 300 children vs. one with 1000 adults and 1500 children will have the same number of taxpayers. Fewer parents with children, replaced by people without kids, means that our tax base is sound.


28 posted on 01/01/2006 8:14:51 PM PST by HostileTerritory
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To: palmer

Bank of America was forced to move its wealth management group to Boston. BoA made some promises to the governor of MA. They didn't follow through. The governor got upset and put the squeeze on the bank. Reluctantly the bank move wealth management to Boston. How long it stays there...who knows?


29 posted on 01/01/2006 8:25:23 PM PST by ladyjane
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To: HostileTerritory
Fewer parents with children, replaced by people without kids, means that our tax base is sound.
30 posted on 01/01/2006 8:34:53 PM PST by Go Gordon (I don't know what your problem is, but I bet its hard to pronounce)
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To: HostileTerritory

New meaning to limosine liberal. No wonder the keep voting in fats and the liar. They are one of them.


31 posted on 01/01/2006 9:47:10 PM PST by vpintheak (Liberal = The antithesis of Freedom and Patriotism)
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To: boomop1; HostileTerritory

<< How do they hide it? >>

In its source.

The big dig.

They hide it there.

[And in the scores of lesser such feral-gummint rob-Westerners-to enrichen East-Coast-establishment-liberals scams]


32 posted on 01/01/2006 10:22:45 PM PST by Brian Allen (How arrogant are we to believe our career political-power-lusting lumpen somehow superior to theirs?)
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To: HostileTerritory; Capt. Tom

<< Yes, I'm lucky I bought before the boom began but I'm also paralyzed because trading up means a much bigger mortgage. >>

Nope.

Moving up means moving to New Mexico, Colorado, Wyoming or Montana.


33 posted on 01/01/2006 10:27:59 PM PST by Brian Allen (How arrogant are we to believe our career political-power-lusting lumpen somehow superior to theirs?)
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To: HostileTerritory
but wouldn't you agree that Newton tends to the other extreme because it's so close to the city, is on the T, and has so many neighborhoods of unique houses?

Yes,the towns/areas that were specifically highlighted on the map that accompanied this piece (Waban,Chestnut Hill, Dover,Carlisle,Weston,etc) are unlike any other parts of the state,with the possible exception of Martha's Vineyard, in regards to real estate prices/values.

On the other hand,the figurers you've quoted are probably pretty (if not very) accurate when applied to the towns that you've mentioned.

34 posted on 01/02/2006 5:57:39 AM PST by Gay State Conservative
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To: HostileTerritory

Per usual the Boston Globe reporters are misinterpreting the data. They interchange the terms numbers with rates.

You can have the percentage of millionaires go up while the actual number of millionaires goes down or stays the same.

Example: Twenty percent of the population are millionaires. The poor people leave the state because they can no longer afford to live there. The percentage of millionaires goes up even though there is no increase in the number of millionaires.


That is exactly what is happening in MA.


35 posted on 01/02/2006 7:40:06 AM PST by ladyjane
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To: ladyjane

The population of Massachusetts is decreasing by a fraction of a percent a year. Until two years ago, it was growing at a fraction of a percent. Not only that, but the article says that the number of millionaires will increase by a large amount in absolute terms, not just a percentage.


36 posted on 01/02/2006 8:18:48 AM PST by HostileTerritory
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To: HostileTerritory

Yes, I read the article. They interchange rates and numbers, then they base their projections on national averages.

As I said, you can still get a higher percentage of millionaires and have fewer of them.

That probably won't happen. People with money will be able to stay. People who lost their jobs in the tech crash, if they haven't already moved, they will probably have to.

Totally ignored in this article is the huge number of illegals who have moved to MA. They're the ones who are mowing the lawns in Weston and doing the dishes at Mistral.


37 posted on 01/02/2006 9:07:35 AM PST by ladyjane
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