Number of millionaires per capita in North Dakota skyrock
By Patrick Springer / The Forum
FARGO - North Dakota has made impressive gains in climbing up the ladder of millionaires per capita.
A new report shows North Dakota jumped 14 slots – the biggest rise of any state – in the rankings for 2013 by Phoenix Marketing International.
The Flickertail State ranked 29th, a bit below the middle of the pack, in the ratio of millionaires to total households. That ratio, 4.59 percent, lags behind the national average, 5.16 percent.
The rankings measure investable wealth and glean information from the Federal Reserve, Census Bureau and Nielsen Co., a polling firm.
Next-door neighbor Minnesota ranked 14th, with a millionaire ratio of 5.56 percent.
Still, North Dakota’s rise in millionaires last year was meteoric, thanks largely to the booming Oil Patch.
“It’s a little rare to see a state jump like North Dakota did,” said David Thompson, managing director for Phoenix Marketing International.
“It’s not unexpected, given the economic boom you’re having out that way,” he added.
In 2007, before the oil boom really took off, North Dakota ranked 47th, and remained near the bottom until surging last year.
“There is no doubt that the increase in millionaires in North Dakota is a result of the western North Dakota energy production,” said Paul Meyers, a financial consultant and president of Legacy Wealth Management in Fargo.
In western North Dakota, monthly oil royalties ranging from $20,000 to $100,000 are not unusual, he said.
“When you have that kind of income, your net worth is going to grow, and you’re going to start making that millionaire’s list pretty fast,” Meyers added.
Despite the obvious gusher of money from the oil boom, other factors have helped drive up wealth in North Dakota.
The rise in farmland values is a big factor in North Dakota’s mushrooming wealth, Meyers said.
He noted that a 640-acre section of farmland worth $5,000 an acre is worth $3.2 million. “I think land values are a big part of it,” Meyers said, referring to wealth gains in the state.
North Dakota had a record 1,126 people who reported incomes of more than $1 million on their 2012 income tax returns, according to state Tax Department records.
Although the Tax Department does not track average incomes by county, a compilation of incomes by school district shows oil-producing areas have the highest average incomes.
Figures for 2011, the most recent comparisons available, show the average income for the Williston School District was $114,746, compared to $79,438 in Dickinson, $59,621 in Fargo and $56,292 in Grand Forks.
Although millionaires still make up a small part of the population, the rise in per capita income in North Dakota has been significant.
In 2012, North Dakota’s per capita income was $51,893, ranking it sixth in the nation, above the $42,693 level for the United States. In 2003, North Dakota’s per capita income, $27,161, ranked 38th, and lagged behind the $31,481 figure for the U.S.
North Dakota’s not the kind of place where people flaunt their wealth, with ostentatious displays of fashion unusual, Meyers said. In recent years, farmers have felt freer to buy expensive farm machinery, he said.
High-end marketers could take notice of North Dakota’s dramatic upswing in wealth, Thompson said. “These luxury marketers go where the money is,” he said.