A million U.S. dollars certainly isn’t what it used to be. While the figure still does stand as an important milestone, it no longer implies fabulous wealth, with yachts, butlers, and quality healthcare. Thanks to inflation, “millionaire” now just means you’re doing OK.
In fact, many millionaires in extremely expensive locations – think San Francisco, New York, Vancouver – are treading water financially. If you think a million dollars will provide a long and luxurious retirement, think again. People still brag about achieving millionaire status, but their boasts fall a little flat. The exclusivity and affluence of the word are gone.
If a million dollars isn’t enough, what is? How much money do you need to be “rich”? Where can we draw the line between the bourgeoisie and the proles?
Many moons ago, PK from Don’t Quit Your Day Job tackled this exact question. He concluded a million wasn’t enough to be truly rich, but he wasn’t sure what should replace it. PK thought being a member of the 1% might work, but that would be a less elegant threshold because it would be a never-round and always-moving number. Plus, saying you’re part of the 1% sounds snobby, while millionaire was always like, “Oh my – I wasn’t even paying attention and look what threshold I just passed. Grab the bubbly.”
A particularly perspicacious person (j/k – it was me!) commented to PK’s post with a brilliant idea:
“I suggest Big Mac Millionaire – someone who can afford to buy one million Big Macs in their home currency / country. It’ll work as a global term, will automatically grow/adjust over time, and, in the spirit of the Economist’s Big Mac index, will attempt to adjust for PPP. Based on the latest from the Economist, it’d be $4,930,000, right in line with the PK low end.”
Big Mac Millionaire. If you can buy one million Big Macs where you live, you’re officially rich. According to the Economist, the U.S. Big Mac sits at $5.58 today, so the entry point for Americans is a net worth of USD 5,580,000. If you’re below that – even if you were thinkin’ pretty highly of yourself ‘cause you’re a millionaire – you are officially NOT rich.
Using the Big Mac for critical economic analysis already has a proud history. The Economist hamburgled the Big Mac for its own purposes decades ago:
“THE Big Mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their ‘correct’ level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.”
The Economist chose the Big Mac since it was one of the few goods that was sold almost everywhere in the world. While using a single sandwich is perhaps less graceful and precise than a basket of goods, there’s almost no way to get a single basket of goods that is common across all countries and economies. For simplicity and ubiquity, the Big Mac is hard to beat.
And that’s why I’ll use it as the newest and best measure of wealth. It’s been a long time since I’ve had an update to my glossary, so it’s headed in there right now.
Big Mac Millionaire (also “Mac Millionaire”) – a person with enough net worth to purchase one million Big Macs in their local economy. Used as a global measure to identify the rich. (less common) Someone who actually owns one million Big Macs.
I imagine there are a number of suddenly not rich people (fka “millionaires”) who now have a mountain to climb to get to USD 5.58 million (or, for my beloved Canadian readers, CAD 6.77 million). And that’s exactly the point – not everyone gets to be rich. Someone who is rich shouldn’t have money worries, and $5 million feels about right for that today.
One beauty of the definition is its instant adjustment for locale – not just across countries but within them. The Economist uses an average of four American cities to get the U.S. price of $5.58. I couldn’t find which cities those were (yeah, I actually researched that), but I know for certain that my local Big Mac doesn’t cost that much. Perhaps Mac Millionaire status isn’t so far away…
A quick jump to the Fast Food Menu Prices site (which is the dream of the internet, finally realized) shows I’m in luck. The Texas Big Mac only runs $4.39. I’m getting closer! And if I wanted to use some geoarbitrage, I don’t have to move to Ukraine. I can go to Mississippi, where $3.91 million makes you a Mac Millionaire (um, is Ukraine still an option?).
Inflation proof. Automatically adjusting. Relevant worldwide. A noble measure that returns “millionaire” to a standard of prestige and exclusivity. When you are a Mac Millionaire, you are now officially rich.
Are you a Mac Millionaire? Do you like Big Macs? I remember fondly the days of my youth, when Big Macs only cost $1 (referred to by economists as Big Mac / USD parity).