- - USA TODAY and Yahoo may earn commission from links in this article. Pricing and availability subject to change.Are you a 'hidden millionaire'? Here are 6 money mistakes to avoid.

Daniel de Visé, USA TODAYFebruary 5, 2026 at 5:03 AM

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If you have a seven-figure net worth but don’t really consider yourself wealthy, you may be part of a growing population of "hidden millionaires."

Vanguard applies the term to Americans who have quietly passed the million-dollar mark in recent years, primarily through saving for retirement and building home equity.

"Last year, we saw over 127,000 retail investors who became millionaires," said Andy Reed, head of investment behavior research at Vanguard. "Every day on our platforms, there are hundreds of users who are crossing the millionaire threshold."

The burgeoning population of hidden millionaires is cause for celebration. More Americans have seven-figure balances in 401(k) accounts, thanks to a surging stock market and rising retirement savings rates. Home equity, too, stands near a record high.

But Vanguard researchers see worrying signs in how hidden millionaires manage their money. Newly minted millionaires make costly errors, Vanguard reports, in handling investments, debts and financial plans.

The reason? Many hidden millionaires seem to live in denial about their wealth. They don’t consider themselves wealthy. They haven’t bothered with financial advisers. They have no estate plan.

"Roughly one in five millionaire investors don’t even consider themselves investors," Reed said, "let alone wealthy."

Here, then, are six common financial mistakes among hidden millionaires.

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One of the costliest errors hidden millionaires commit, Vanguard reports, is to keep retirement savings in cash.

"Cash drag" often arises when a retirement saver rolls over a workplace 401(k) account into an IRA, Reed said. After a rollover, the funds often remain in cash, or some cash-equivalent account, until the saver re-invests.

Keeping retirement funds in cash means you miss out on the investment returns from stocks, which typically average about 10% a year.

Why do investors hold savings in cash? Many say they didn’t realize their savings weren’t already invested, or thought the funds were invested automatically.

"For many investors, it stays in cash for months, maybe years," Reed said.

"Stock concentration" is an investment term for having too much of a portfolio tied up in a small number of stocks.Stock concentration

Another costly mistake among hidden millionaires is stock concentration: committing too large a share of investment dollars to individual stocks.

The classic example is employer stock. Your company gives you shares of its own stock as a 401(k) match. Twenty years later, a whopping share of your retirement savings sits in a single stock.

"It feels safe, because it’s familiar and you trust your company," Reed said. "But actually, it’s quite risky."

Retirement savers can also become over-invested in a favorite stock that has paid handsome returns over the years.

Michelle Crumm, a certified financial planner in Ann Arbor, Michigan, recalls a client who inherited $4 million in Microsoft stock from a parent.

"I’m saying, 'We need to sell all this stock,'" Crumm said. But the client refused, saying, "My dad bought it in the '70s."

"There’s such an emotional attachment to this stock," Crumm said. She finally persuaded the client to sell half.

With stock concentration, the risk is that you stake too much on the performance of a single company. Experts typically recommend holding no more than 10% of your investments in any one stock.

Some wealthy Americans have high-interest credit card debt that they could easily pay off, Vanguard reports.Bad debt management

If you have a seven-figure net worth, in theory, you shouldn’t be saddled with high-interest credit card debt.

But Vanguard research finds that many high-net-worth investors have card debt that they could easily pay off.

Let’s say you have $20,000 in cash in a brokerage account, earning 3% interest. You also have $20,000 in credit card debt, at 20% interest.

The debt is costing you a lot more than you’re earning in the brokerage account. Thus, it would make sense to use some or all of the cash to pay down the debt.

Other high-wealth households have a different problem: They are making overly aggressive payments on a low-interest mortgage, spending money they could have invested in stocks.

The same principle applies: The borrowing costs on a 4% mortgage are lower than the potential interest you’d earn by investing the money.

Poor estate planning

Because many hidden millionaires don’t see themselves as wealthy, they don’t bother to write estate plans.

"A lot of people say, 'Estate planning is for rich people. I’m not really rich,'" Reed said.

An estate plan covers medical and financial directives while you’re alive, as well as what happens to your assets after you die. Research by Trust & Will suggests that fewer than half of Americans have some kind of estate plan.

"Everyone needs an estate plan, even if it’s a basic will," said Spenser Liszt, a certified financial planner in Dallas.

Poor financial planning

By the same token, hidden millionaires might not see the point in consulting with a financial adviser.

But there’s a reason why high-wealth households hire financial planners. A pro can help you spot all of the problems mentioned above. They can help you invest your wealth and prepare for retirement.

Don’t want to spend money on an adviser?

"Try to find someone who will take a one-off look at your finances, and do that for a fixed fee," said Dan Caplinger, a contributing analyst and financial planning expert at The Motely Fool.

You never know: The meeting might spawn a long-term relationship.

Unnecessary frugality

And then, there's the financial lapse that Crumm, the Michigan CFP, calls "bag lady syndrome."

Some clients have millions of dollars saved, more than enough to retire. But they continue to work, and they’re reluctant to spend.

"They’re spending $50,000 a year," she said. They could easily spend $100,000 a year."

Liz Windisch, a certified financial planner in Denver, cites a related concern:

If a household has hundreds of thousands of dollars in home equity, the family should decide if they are going to tap the asset in retirement. That decision, in turn, could reduce their reliance on retirement savings.

"You may not need to have as much money in your retirement account, if you’re going to sell," she said.

This article originally appeared on USA TODAY: Newly minted millionaires make money mistakes. Here are 6 to avoid.

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