An income above $650,000 per year is considered part of the top 1% of earners—but most Americans disagree with what it means to feel like a wealthy American.
Key Details
- Charles Schwab’s annual Modern Wealth Survey from August reports that Americans believe you need a net worth of $2.2 million to be considered wealthy.
- A recent U.S. Bank study finds that boomers and Gen Z disagree about the definition of wealth, with boomers simply wanting financial security and zoomers answering “having a better quality of life.”
- The Schwab study finds boomers who feel wealthy make at least $692,000, while Gen Z feels wealthy after earning $414,000.
- A recent survey of Americans making more than $175,000 a year—who earn more than 81.3% of households—found 25% of respondents self-identifying as poor, very poor, or barely scraping by.
Why It’s Important
Feeling wealthy for most Americans appears to be a state of mind rather than a specific set of brackets on a tax document. Wealth is often tied to feelings of financial security, how much they are spending, where they live, and how wealthy neighbors are. Feeling wealthy can often be correlated to an individual’s well-being, spending freedom, available free time, stress levels, personal achievement, philanthropic giving, or luxury lifestyle, GoBankingRates notes.
“I still worry about money,” Debra Corbin tells Bloomberg, who is a Florida retiree worth $1.3 million. “I think rich is subjective. When I’m in southern Illinois, where we’re from, I feel rich. When I’m in Naples, I feel blessed. Down here, it’s hard to feel rich because there are billionaires down here.”
As the Charles Schwab study notes, well-being is a more important measurement of wealth than anything else. Feeling wealthy is tied to a lack of stress over money. Money does not create emotional well-being, healthy relationships, or happiness, but happy people are likelier to report feeling wealthy.
Notable Quotes
“Being capable of paying for ongoing expenses, saving for retirement and emergencies, paying down debt, and having a bit more left over for an occasional ‘splurge,’ whatever it might be, is more likely to be aligned with being comfortable. Typically, people fantasize about the notion of getting ‘rich,’ but most aspire to get by or a bit better than that,” Bankrate analyst Mark Hamrick tells Fortune.
“One of the risks we run is thinking a certain amount of money is going to bring us happiness, bring us peace, improve our lives, improve our relationships. Unfortunately, some people will sacrifice what matters most to them ultimately, in their goal to achieve an arbitrary wealth number,” Colorado financial psychologist Brad Klontz tells CNBC.