A 2023 study by Charles Schwab & Co. estimated that Americans need a net worth of $2.2 million to be considered wealthy.
But the survey revealed a wide gap between the perceived wealth needs and actual net worth of those who feel wealthy.
The survey asked 1,000 Americans to define wealth and how wealthy they currently feel. While 48% of respondents said they feel wealthy, the average net worth for this group was significantly lower, averaging about $560,000. This figure varied by generation, with millennials being the most likely to say they currently feel wealthy.
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The Charles Schwab survey results highlight how Americans define wealth beyond monetary metrics. When asked what being wealthy means to them, respondents often mentioned aspects related to happiness rather than a definition based on money or assets. For example, many people preferred having a fulfilling personal life, enjoying experiences, and maintaining a healthy work-life balance over having a lot of money.
The study explored the importance of time and money and found that 61% of respondents value time more than money. This trend was most pronounced among Baby Boomers, who at 67% value time more than money, compared to 59% of Gen Xers, 56% of Millennials, and 58% of Gen Zers.
Access to investment opportunities and financial information has never been easier. But with this abundance also comes a deluge of misinformation and complexity. Most people would benefit from clear, easy-to-understand educational tools and guidance to help them develop a plan to effectively build, maintain, and use their wealth.
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Only 35% of Americans have formally documented financial goals. This small group of planners feels more in control of their finances (70% say they feel this way) and expresses high confidence in achieving their financial goals, with 92% feeling optimistic.
Conversely, the majority of Americans do not have a formal financial plan, with 65% of respondents having no financial plan at all. Of those who have given some thought to financial planning, 40% acknowledge that they need to document their goals, indicating they recognize the importance but are slow to act. An additional 26% have not considered financial planning at all.
The survey also explored barriers to financial planning, with the biggest barriers cited being lack of funds (44% felt they did not have enough money to warrant a plan), the complexity of creating a plan (21%), lack of time (20%) and no major life events that prompted them to plan financially (18%).
The truth is, financial planning is for everyone, not just the wealthy. A financial advisor can help you sort through complex issues, save you time, and identify opportunities you might have missed. Even just one consultation can be a great starting point to get you on track toward your financial goals.
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This article, “What Makes You Feel Wealthy? Here's the Average Net Worth of People Who Consider Them 'Wealthy'” originally appeared on Benzinga.com.
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