The average American needs a net worth of $2.2 million to be considered wealthy, according to a new study.
Key Details
- On Tuesday, Charles Schwab released the 2023 Modern Wealth Survey, which surveyed respondents to estimate the net worth required to be considered rich, Bloomberg reports.
- Another recent study from SmartAsset found that Americans need to gross $597,815 annually to be considered part of the top 1% of income earners, although other studies push that number above $900,000.
- According to the survey, 48% of the respondents already say they feel wealthy, with a net worth of $560,000.
- Millennials and Zoomer respondents spoke the most optimistically, respectively, saying that 57% and 46% of respondents feel wealthy compared to 40% of Baby Boomers and 41% of Gen X.
Why It’s Important
It has been said by author John Steinbeck that the ethos of American workers is that they act like “temporarily embarrassed millionaires.” This appears to be true even among the younger generations—where changing worth ethics and beliefs are playing out in the business world. Younger generations face one of the most difficult economic times in modern history, with a poor housing market, high inflation, high-interest rates, and a stifling job market.
However counterintuitive it may seem, many young people do not feel poor. Survey respondents say they can afford a similar lifestyle to their friends, colleagues, family, and social media acquaintances and do not find their lives dissimilar.
“There’s this paradox of people defining wealth differently for themselves versus others. When you ask someone for a dollar amount, they don’t put it in the context of the rest of their life and financial health,” Charles Schwab managing director Rob Williams tells Bloomberg.
There are still many outstanding questions in regard to how the Millennial and Zoomer generations are going to grapple with wealth and entrepreneurship. The passing of the baby boomer generation within the next several decades will facilitate one of the largest wealth transfers in human history. Still, many business owners are weary of passing their businesses down to the next generation. It remains unclear how these younger generations will react to large inheritances and responsibilities, given their negative reputation for laziness in the workplace and poor work ethics.
