Americans say you need $2.2 million to be considered wealthy — yet, 48% of them say they feel wealthy despite having an average net worth of $560,000.
What seems like cloudy logic becomes clearer when you ask these folks to fully explain their concept of “wealth,” according to Charles Schwab’s seventh annual Modern Wealth Survey, which polled 1,200 people.
Although many of the respondents who describe themselves as wealthy fall far short of their own yardstick for financial wealth, they feel wealthy in areas they say are more important than money, such as health and family.
According to a summary of the Charles Schwab findings:
“[W]hen asked to characterize what it means to be wealthy in their own words, Americans mention their well-being (40%) more often than money (32%) and assets (26%).”
Upon being asked to describe what wealth means to them, more than 60% of respondents named one of the following non-monetary factors:
For example, upon being asked to choose between monetary and non-monetary definitions of wealth, respondents most commonly chose the following non-monetary definitions:
- Having a fulfilling personal life: 72% chose this definition of wealth over “working on my career”
- Enjoying experiences: 70% chose this over “owning many nice things”
- Not having to stress over money: 70% chose this over “having more money than most people I know”
- Having a healthy work-life balance: 69% chose this over “maximizing my earnings even if it impacts my work-life balance”
- Being generous with loved ones now: 67% chose this over “leaving an inheritance”
Baby boomers were especially likely to downplay financial wealth, with 79% saying that enjoying experiences defines wealth better than owning many nice things.
In the summary of the findings, Jonathan Craig, managing director and head of investor services at Charles Schwab, says this year’s survey appears to reveal a shift in attitude among Americans:
“Americans today aren’t as worried about keeping up with the Joneses, and more importantly, they understand that they can be happier with fulfilling experiences and relationships, even if they have less money than them.”