Is there such a thing as a cash poor millionaire?

Do cash poor millionaires exist? Maybe the terminology is a little subjective as vast differences exist between millionaires and high net worth individuals. I prefer the term high net worth individual as a millionaire is certainly a different proposition, homeowners with near million dollar debts are not as wealthy as many would think.

With real estate prices currently driving the nation along in terms of wealth, is this wealth really driving growth and jobs. The major east coast cities of Sydney, Melbourne and Brisbane have median house prices exceeding a million dollars more households are now entering million dollar status. This is net wealth, most households are highly leveraged carrying significant debt, gross assets are great but also carry significant risk especially with historically low interest rates eventually to rise.

Whilst a number of measurements exist, the definition of the high net worth individual generally denotes individuals with liquid assets exceeding one million United States dollars not including their primary residence. When families hold 10% - 30% equity in their house, that is plenty of debt to carry so while people might want to use the term millionaire, they are certainly not high net worth individuals or families.

Households are feeling mortgage stress with low wages growth, rising utilities, school fees, healthcare, groceries and probable soon to be rising interest rates. The reasons the Reserve Bank of Australia set interest rates is due to economic activity, lower rates are designed to stimulate economic activity whilst rising interest rates limit inflationary forces leading to severe downturns and recessions. We are a long way from that, but since these loans are long-term families are expected to feel greater stress throughout the full economic cycle.