By Ryan Velez
If you were to ask someone if being a millionaire overnight would change their fortunes for the better, you would likely get a lot of agreement. However, Newsweek reports that a million dollars is no longer enough to keep people feeling that they have wealth, and there are a number of reasons why.
The story comes from research from bank Charles Schwab, concluding that the new benchmark for being wealthy is $2.4 million. The survey the bank put out, covering Americans aged 21 to 75, asked how much money it took to be considered wealthy, and $1 million was only enough to fall into the “financially comfortable” category. This $2.4 million is 30 times the $80,000 net worth your average American household has. Interestingly, while there are a record number of millionaires in the U.S., according to the Spectrum Group’s 2017 Market Insight report, this only makes up 10% of the country’s population.
So if millionaires are growing in number but are still a small marker, where is the money coming from? The answer is a shrinking middle class, but with fewer people having access to money, they are beginning to redefine what wealth truly means. 27% defined wealth in terms of cash, but 24% defined it through experiences, and 19% as peace of mind. In fact, when it comes to priorities, many say that they would prefer good health and gratitude over a lot of cash. It’s interesting to speculate whether or not people are reprioritizing due to the fact that they feel there is less access to wealth or another outside force.
“Wealth is often thought of as a lofty, unattainable number that doesn’t apply to most of us, but that’s an old-fashioned notion that needs to be retired,” Terri Kallsen, head of Schwab Investor Services, said in a statement released with the findings.
One of the potential outside forces could be generational. The study included attitudes to wealth among millennials. A third of them say that they have a written financial plan, in contrast to 18% of Baby Boomers. However, this doesn’t transfer to day-to-day spending. 60% of them say that don’t set a household budget or monthly savings goals. Considering the amounts of debt millennials are incurring from student loans, it is interesting to see how their preferences will alter various industries. These include the many retail businesses that are slowing operations, partly due to the millennial preference for shopping online.