Paper Millionaire is an individual who has achieved a high net worth as a result of the large total market value of the assets s/he owns. The paper millionaire's riches usually are not safe until these holdings are liquidated. It is important to note that paper millionaires are not the same as True Millionaires, which generally refers to people who have MORE THAN $1 Million in cash in the bank.
For example, consider a person who invested in real estate or marketable securities. Assuming that none of his assets is sold, s/he would have become a paper millionaire as recorded on paper, despite having very little cash in the bank.
However, once the market bubble burst, paper millionaires found themselves poor, owning only pieces of paper (i.e. land title or share certificates) that were no longer worth the millions of dollars at which the market had previously valued them.
Source: Investopedia
No comments:
Post a Comment