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.
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.
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.
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.
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!
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.
To be only wealthy because you can do anything you want with no restrictions at all is just greedy.
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.
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.
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