Different Definitions of Millionaire and Their Significance

There are two kinds of millionaires: the Obama 30% tax plan millionaire and the Millionaire Matchmaker millionaire.

Obama proposed a 30% minimum tax on all millionaires in his State of the Union.  This "impossible to pass" proposal would be a tax on those making a million or more a year in income, such as Mitt Romney.  These are Annual Income Millionaires.

An annual income millionaire definition is different from the Millionaire Matchmaker definition.  In order to be eligible for Millionaire Matchmaker, someone just has to have $1 million in net assets.  This means that a person's asset (minus) their liabilities has to be at least a million.  These are Net Worth Millionaires.  Assets include a person's home, any land they own, their 401(k) plan, etc.  Liabilities include debt, a mortgage, etc.

This difference is almost never explained to people and is very important to understand. You ought to be super rich if you are an Annual Income Millionaire.  If you are just a Net Worth Millionaire, you aren't that rich although you are about the top 5% of the population.  Much of the Upper Middle Class in America are Net Worth Millionaires.  My parents fit under this description and they still order off the dollar menu at McDonald's.