How Americans Define Wealth, Survey SaysSubmitted by Moneywatch Advisors on June 26th, 2023
Charles Schwab Co. released the results of their recent survey that sought to quantify how much Americans think it takes to be wealthy. While the numbers are certainly interesting, what I found fascinating and refreshing was that the survey indicated most people include non-financial factors when quantifying their own wealth. In other words, having a loving family, their health and good friends was important too, not just cash in the bank. Here are some key takeaways from the survey:
- 48% of those surveyed consider themselves wealthy;
- Their average net worth, their assets minus their debts, is $560,000;
- Those who consider themselves wealthy cited their own health and a loving family in their estimation of their own wealth;
- Incidentally, Vanguard found the average contribution to 401(k) plans in 2022 was 11.3% of their pay - including contributions from employers. This is an average so many are above or below that level but, in my opinion, that rate is below where most people need to be to reach their goals.
- How much do the respondents think it takes others to be wealthy in America? $2.2 Million was the average response. So, they believe they are wealthy at $560,000 but, for others, it takes 4 times that to be considered wealthy in America today. Interesting contrast. Why?
- Maybe people don’t have to “keep up with the Joneses” to consider themselves wealthy? How refreshing and healthy that would be if true;
- 70% said wealth is more about enjoying experiences than owning nice, expensive things;
- 70% said wealth means not having to stress about money. This one is near and dear to my heart. Having a financial plan helps people pursue this goal of financial independence;
- 69% cited a healthy work-life balance as more important than maximizing earnings. I wonder if this number is higher after Covid than before?
- 69% said it’s more important to be generous with loved ones now than to leave a large inheritance. This makes sense to me too – enjoy giving.
Overall, I am encouraged by the responses to this survey. Americans seem to be placing their priorities where I place mine and where I think they should be for most of us. What about you? What does wealth mean to you and how will you know when you get there?
Steve Byars, CFP®