Is Real Estate a Millionaire Investment?

This country has a lot of millionaire households. Just how many is a subject of dispute. The What's Offline column in The New York Times indicates one source of the uncertainty: real estate.

There are 9.3 million households in the United States — about one of every 12 — with a net worth of at least $1 million, writes Financial Planning magazine, citing figures compiled by the Phoenix Companies and TNS Financial Services.

Net worth here is defined oddly: It is the value of all assets a household owns, minus debts and the value of the primary residence. (But while the primary residence is not counted, a second home and other real estate is.)

Traditionally, when financial planners talk about high-net-worth individuals, they mean people with at least $1 million in assets to invest. The numbers here are impressive as well.

“Of the 114 million houses in the U.S., roughly 109 million, or 95 percent, have less than $1 million in investable assets,” writes Elizabeth O’Brien. But there are about five million households “with $1 million to $10 million to invest; 200,000 households with $10 million to $25 million to invest” and another 40,000 designated “ultra-high net worth,” who have more than $25 million in investable assets.

Is real estate a valid investment? Sure seemed like a great one a few years ago. Today you might get an argument.