According to the 2023 Modern Wealth Survey, recently released by Charles Schwab, a nationally representative sample of Americans was asked to estimate the average net worth needed to be considered wealthy.
The results revealed that, to be considered wealthy in the United States, it is necessary to possess at least $2.2 million.
Despite the large sum required, a surprising 48% of respondents said they actually feel rich today, even with an average net worth of $560,000, which is well below the ideal in the survey.
These results contradict the common narrative that young people face financial hardship.
In fact, feeling rich was more common among Millennials and Generation Z, with 57% and 46% respectively reporting this feeling, compared to just 41% of Gen Xers and 40% of Baby Boomers.
After all, what does it mean to be rich in the United States?
In cities with a higher cost of living, rising housing prices and inflation have greatly affected the cost of living, requiring a larger amount of money to feel financially secure.
Moreover, the purchasing power of a six-figure salary can vary greatly depending on the region of the country, due to differences in costs and living standards.
On the other hand, defining a single measure of wealth becomes difficult due to the complexities of individual circumstances, such as family size, home ownership, and debt obligations.
These diverse factors highlight the importance of considering personal context when assessing an individual’s financial health, as the meaning of wealth can vary widely based on these unique circumstances.
Feelings of wealth among people are also shaped by the influences of their social circles. Nearly half of the survey participants revealed that being able to live a similar lifestyle to their friends is what makes them feel rich.
Moreover, more than a third of those who use social media say they compare their own lifestyles to what is being shared online by their family and friends. This dynamic is especially noticeable among millennials and Gen Z.
For many Americans, the concept of wealth goes beyond just net worth.
According to the survey, nearly two-thirds of the respondents said that having healthy relationships with loved ones is a more accurate description of wealth than simply having a large amount of money.
Moreover, 70% of the survey respondents highlighted that true wealth lies in not worrying about money, rather than having a large bank account.
These views emphasize the importance of emotional well-being and financial security as key components of true wealth.
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