Today's millionaires aren't feeling very wealthy

A survey finds that even those worth up to $4 million wish they had fewer financial constraints on their activities.

By Jason Notte Jul 24, 2013 7:13AM
CEO with money copyright Roy McMahon, CorbisWhat constitutes wealth in the U.S. these days? It depends on the context.


If you're talking about wealth in relation to the minimum wage, billionaire Charles Koch assures America that the path to riches requires a mere $34,000 a year. If we're discussing wealth in the Western, above-the-paupers sense, then even $4 million doesn't seem to cut it.


The UBS (UBS) Investor Watch asked 4,450 investors whether they consider themselves wealthy. According to CNBC, 60% of those worth $5 million or more said they are indeed wealthy, while only 28% of those worth between $1 million and $5 million said the same.


But what are these folks thinking when they hear the word "wealthy," and why aren't all the people envying those fat stacks of cash thinking the same?


Well, for one, the millionaires' goals are different. Only 10% told UBS that being wealthy means "never having to work again" -- that's just "rich." Only 16% think "surpassing a certain asset threshold" makes a person wealthy. It's gauche to count your money.


Nope, the broadest definition of wealth -- the one more than half of the survey's respondents embrace -- is "no financial constraints on activities." This is a group whose impulse buys include last-minute hikes in the Himalayas and the cute 40-acre property they saw while on holiday.


With this goal in mind, they're keeping 23% of their assets in cash, which is the highest level since 2010.


Those cash holdings alone would exceed the definition of "rich" that Americans gave in a late 2011 Gallup poll, which found a yearly income of $150,000 would be enough for most people to consider themselves rich. Those making less than $50,000 a year -- the Census Bureau's median annual household income -- would feel well off with $100,000 a year.


That's not an insignificant distinction, as the definition of wealth tends to vary widely by class. An Ipsos Mendelsohn poll taken last year asked Americans earning $100,000 or more annually to define who they felt was in the 1% targeted by Occupy Wall Street. On average, they cited people making at least $1.4 million a year. In contrast, the federal government says it takes only $325,000 a year to make that elusive 1%.


Last year, Fidelity surveyed 1,000 millionaires with an average worth of $3 million and asked them what it would take to make them wealthy. The answer? About $5 million in investable assets, which is down roughly a third from the $7.5 million they felt they needed a few years back.


Given that range of responses, there's only one consensus answer to the question of who qualifies as wealthy in America: anyone earning and putting away more than you are.


More on moneyNOW

276Comments
Jul 24, 2013 10:25AM
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If millionaires aren't feeling wealthy, just think how the "little people" are feeling.
Jul 24, 2013 8:34AM
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OK, first off, Charles Koch didn't say $34k made you rich, he merely pointed out that $34k in income puts you in the top 1% of income earners in the world.

And second, wealth is much harder to define than just assigning a dollar figure.  There are plenty of business owners, entreprenuers, traders, etc... who make millions of dollars a year, but many of them don't feel wealthy, maybe because they are still working 70+ hour weeks and can't remember the last time they took a real vacation where they didn't work at all for a week or more.  There are also plenty of people who make low 6 figures who think of themselves as wealthy, either because that's so much more than their parents made, or because they earn just enough to make the minimum monthly payment on a big house, nice cars and a bunch of toys and gadgets, to give the all-important impression to their friends and relatives that they are wealthy, even though their net assets are actually negative.

Some people define wealth as having enough money so that you can buy anything you want, whenever you want.  Obviously this can vary wildly depending on your lifestyle choices.  Having enough stashed away to be able to go out and buy a private island and a yacht whenever you want is a lot different than having enough to live an upper-middle class lifestyle in a nice house, with plenty of nice toys and cars and vacations.

In my mind, being wealthy means you have enough money stashed away in passive accounts that earns enough interest so that you don't ever really have to worry about running out.  It also means you have enough to where you don't have to spend another day in your life doing something you don't enjoy doing.  

Jul 24, 2013 10:45AM
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The real definition of "rich" is when your money earns more than you do.  You can have well over a million dollars net worth in all of your assets added up together, but when you have to work to pay the bills, you're not rich.

Jul 24, 2013 10:33AM
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...and we of the middle class should feel sorry for these "poor" millionaires...why?
Jul 24, 2013 1:15PM
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Cracking a million in cash and assets certainly doesn't make me feel wealthy. I still eat a can of soup for lunch that I don't stock up on until it is marked down. I live in a VERY modest home that I have remodeled myself over the years and I drive an 11 year old truck. I have worked hard all my life and saved at least 10%-15% of my paycheck for the last 30 years. (I don't touch that part and I live on what's left). I still worry about trying to retire and being able to afford good quality health care.

 

Now if I had everything back that I've paid in taxes.....then I would feel very wealthy!

Jul 24, 2013 7:45AM
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Fact is, some folks won't ever know how well off they are until they somehow find themselves poor or in the Grind of the current Middle-Class. Fact is, it's hard to feel wealthy if you are approaching retirement age and you know a serious illness can wipe out a few million. Fact is, depending on how you word a survey, you might sometimes get vague results which really doesn't reveal much about what you were asking. That seems to be the case here.
Jul 24, 2013 11:07AM
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All you have to do is live within your means.  
Jul 24, 2013 11:06AM
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Some of the most unhappy, bitter people out there are millionaires. Proof that money doesn't always make people happy. 
Jul 24, 2013 11:51AM
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The very term 'millionaire' shows just how antiquated our terminology is.

 

Back when it was first used over a century ago a million dollars was really something. Now it's the bare minimum that's needed to retire comfortably. We should start using a new inflation-adjusted term that doesn't lull people into a false sense of financial security once they hit a net worth of a million.

Jul 24, 2013 1:20PM
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I have a net worth near two mil...and it is not rich. Money is not worth what it used to be....Banks remind me of this every time I think I should get a new loan to buy a new property....and then I am treated as if I am unemployed...and questionable....Two mil is not an amount that lets you spend without thinking seriously about it...and many have discovered that if you dont really take care of your nest egg....that it can start disappearing very quickly....You must continue the policies and actions that got you there....no dumb mistakes. No showing off to impress people...
Jul 24, 2013 1:30PM
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"no financial constraints on activities."

Well, as you start to make more money, you start considering new "activities." It's a never ending cycle. Most people adjust their standard of living as they make more money. This kind of suffering is entirely self inflicted.
Jul 24, 2013 12:18PM
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Who cares if they feel rich or not, they still have a hell a lot more than I do...a lot more!
Jul 24, 2013 9:39AM
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If I was near retirement and only had a million dollars in the bank, I would be a little worried.  At 5% ROA that would only give me 50,000 to live off of.  With the additional medical costs of getting old, I would hope I would be in a better place.
Jul 24, 2013 11:13AM
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I think we would all be feeling a little better if our government hadn't ruined the value of the dollar and bankrupted the country. This feeling is only going to get worse until we the people take control of our government and boot out all of the corrupt POS like Obama and anybody who has been there for more than 2 terms. We need to shrink the size of the government until it doesn't cost more than it gets in revenue. That's why we need a Flat Tax and a Balanced Budget Amendment.
Jul 24, 2013 12:08PM
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Depends on the context and lifestyle. If someone gave me 1 million today, I'd be secure, but I'd still have to work. Even 2-3 million doesn't buy some of the trappings of the really rich lifestyle.
Jul 24, 2013 10:00AM
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I am in that income group and no way do I consider wealthy to be defined by "no financial constraints on activities.".   I consider myself wealthy and we are in the top 1/3 of the 1-5 million range.

To be only wealthy because you can do anything you want with no restrictions at all is just greedy.
Jul 24, 2013 3:03PM
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Money can disappear in an instant. I consider myself rich because I have loving family and friends. My

health is pretty good considering my age. I don't go to bed hungry. I don't over spend on material things.

I believe you are as happy in life as YOU decide to be. Remember life is short,dont waste it by worrying

about things you cant change.

Jul 24, 2013 1:55PM
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This is in line with other questions like, "what age is old?" The answer is almost always somewhere beyond where you are today.

 

That said, I think a lot of people are being overly critical here as per usual. These millionaires are not complaining or looking for sympathy. They simply answered questions in a survey. If a 50-year old says 70 is old, would you critize them for their opinion like you do a rich guy that thinks he isn't wealthy? I think 50 is old so for him to say 70 rather than "yes, I am old" seems self serving but I respect our different perspectives. I have cousins in high school and younger that think I am old. It is what it is.

 

Point is, they were asked a question and gave their opinion. You might disagree but don't exaggerate and crucify people for voicing an opinion when asked.

Jul 24, 2013 9:44AM
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and as in the case of Regal Man wealth can be just a figment of your imagination.
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