About 13,000 Millionaire Families in the Area

Claritas in the News

Mobile Press-Register
January 7, 2007
K.A. Turner

There has been a lot of talk in recent days about Alabama’s newest multimillionaire – the University of Alabama’s new football coach.

But the Mobile area already had its own set of millionaire families, about 13,000 of them, in fact.

New research by San Diego-based Claritas Inc. indicates that about one ievery 39 households in Mobile’s designated marketing area has $1 milplus in assets.

The ratio is better in New York (one in 29 households there), Los Angeles, Chicago and Philadelphia.

But it’s not as good in Birmingham, Huntsville or New Orleans. In each of those places, it takes at least 40 households, on average, to find that $1 million net worth.

Claritas is in the business of sorting information. It slices and dices demographic data for a variety of customers, and has especially close ties to the broadcast industry. That’s where the designated marketing area concept comes in.

Mobile’s DMA is the half-million or so households in coastal Alabama and the western Florida Panhandle within easy reach of television signals that originate in Mobile and Pensacola. It is the 59th-largest TV market in the country, as ranked by the Nielsen Media Research ratings.

Claritas’ measure of a household’s worth does not include the estimated value of a primary residence, said Stephen Moore, the company’s director of public relations. Instead, it tallies more liquid financial assets such as checking accounts, savings accounts, certificates of deposit, IRAs, mutual funds, retirement accounts, stocks, bonds and securities.

The company’s latest data has the Mobile-Pensacola DMA with 13,009 households in its million-plus category, 1,420 of them worth at least double that.

And it estimates that five years from now, the number of families worth at least $1 million will have grown by 48 percent to 19,313.

But by that time, what will being a millionaire really mean?

Consider this: A person winning $1 million in 1998 – the first year the TV show “Who Wants to Be a Millionaire” aired in Britain – would have needed to win $1,158,771 in 2005 to have the same buying power, according to a popular online inflation calculator. Spending $1 million in 2005 would have netted only what $870,000 could have bought five years earlier.

So perhaps achieving millionaire status doesn’t have quite the financial cachet it once did.

A good way to quantify the value of $1 million is to understand its earning power, suggests Keith Drago, first vice president wealth management in the Mobile office of Smith Barney, a division of Citigroup Global Capital Markets Inc.

These days, putting $1 million in “ultra safe” investments such as certificates of deposit would earn about 5 percent interest and produce annual income of about $50,000.

Five years ago, he said, the yield would likely have been a bit higher. “You actually made more money on your safe investments, and your cost of living would have been lower then, so you certainly netted more, on both sides, than you do now,” he said.

Still, Drago said he doesn’t expect TV to come out with a show that ups the ante on instant wealth anytime soon.

“I’ve never spoken with anyone who aspires to be a $10 millionaire,” he said.

Drago said he recently had a client ask not how to invest to make a million, but how many millions would need to be set aside just to ensure his current annual income.

“I do think young people still aspire to be millionaires,” he said. “But as we get older, we get a little more jaded. It becomes more about here’s a number, now what can I do with it.”

(Readers may write K.A. Turner at the Press-Register, P.O. Box 2488, Mobile, AL 36652-2488, call her at 219-5644 or e-mail kturner@press-register.com)

About Claritas

Since 1971, San Diego-based Claritas has been the pre-eminent source of accurate, up-to-date marketing information about people, households and businesses within any geographic area in the United States. Its target marketing services are aimed at reducing the cost of customer acquisition and growing customer value. Claritas offers industry-leading consumer segmentation systems, consulting services and software applications for site analysis, advertising sales and customer targeting. Claritas is a Nielsen company. The Nielsen Company is a world-leading information and media company that includes ACNielsen, Nielsen Media Research, Spectra Marketing Systems, and Scarborough Research, among others. To learn more about Claritas and Nielsen products and services visit their web sites at www.claritas.com and www.nielsen.com.