As it turns out, the current numbers are far better. Today, there are 9.2 million households worth more than $1 million, not including the value of their primary residence. The net worth is almost double their estimate. However, the numbers of new millionaires grew by 21% in 2004, 11% in 2005, 8% in 2006 and 2% in 2007. Can you see a trend here?

In fact, this year it may even reverse. If you go to the Federal Reserve data, you find that US national net worth has dropped by over $2 trillion in the 2 quarters ended last March (the latest data). Given the continued drop in home prices and the stock market, it’s likely those losses will mount.

Now, it’s not all bad news. We still have total assets of $70 trillion against liabilities of $14.5 trillion. Much of that wealth, however, is concentrated in the hands of the wealthy, and the real imbalance is in lower-income households. Meanwhile, cash savings are rising at a healthy pace, for a change.

The Wealth of Nations

Let’s review a few factors that I think will make it harder to become a millionaire over the next decade than it has been in the past.

From 1981 to 2006, our national wealth in the form of houses, stocks, real estate, bonds, businesses -- everything -- grew from $10 trillion to $57 trillion. Over long periods of time, national wealth (or, more accurately, the prices we put on our assets) is by definition a mean-reversion machine. Over 40 or 50 years, national wealth has to revert to the growth in nominal GDP. That's just the way economics -- and the math -- work out.

Basically, just as trees cannot grow to the sky, total corporate profits cannot grow faster than the overall economy over long periods of time - and neither can national wealth.

Think of Japan: At one point, in 1989, relatively small areas of Tokyo were worth more than the entire state of California. Then the bubble burst, and Japanese national wealth decreased to less than its GDP (currently, it's in line with long-term nominal GDP growth).

In the US, long-term nominal-GDP growth is about 5.5%. We've actually grown by 7.2% for the last 25 years. To revert to the mean suggests that over the next 15 years or more, we're going to see nominal wealth grow between 2.5% and 3%. That's a major headwind - dislocation from the experience we've had.

Investors have been expecting to get the past 25 years to repeat themselves. The laws of economics suggest that can’t be the case. We've seen monster growth in equities in terms of total market cap, even given the flat growth of the last 10 years. We all know about the housing market - particularly in light of the recent bailouts of Fannie Mae (FNM) and Freddie Mac (FRE).