Here’s How Much Money Americans Think They Need to Be 'Wealthy’ Today
Who qualifies as rich today? The bar for being considered wealthy is shifting, as most people now believe that merely being a millionaire doesn't cut it.
An annual survey from Charles Schwab asks Americans how much net worth it takes to be wealthy. This year, the average answer was $2.5 million, up from $2.2 million in the last two iterations of the survey.
Older generations and residents of expensive cities like San Francisco had the highest thresholds for what net worth qualified as wealthy. Generally, the survey found significant variance in answers based on age and city of residence.
"'Wealth' means different things to different people," Rob Williams, managing director of financial planning at Charles Schwab, said in a release. But for many Americans, reaching "a certain dollar amount" is a key part of how they think about achieving wealth, he added.
The results of the Schwab survey suggest only a tiny portion of people are rich. If $2.5 million is what it takes to be wealthy, about 2% of Americans actually meet the criteria.
Americans are also somewhat pessimistic about their chances of becoming wealthy. About 10% say they’re wealthy now, and 21% say they’re on track to get there. "Younger Americans, including Millennials and Gen Z, are the most optimistic about being wealthy in their lifetimes (29%)," Schwab said in the release.
It takes a lot less wealth to be considered "financially comfortable," according to the survey. The average net worth people think it takes to be comfortable is $778,000, which is actually down from a peak last year of about $1 million.
Average net worth it takes to be wealthy, by generation
Here's how much money each generation says it takes to be wealthy:
- All Americans: $2.5 million
- Boomers: $2.8 million
- Gen X: $2.7 million
- Millennials: $2.2 million
- Gen Z: $1.2 million
Average net worth it takes to be 'wealthy' by location
Here's how much money residents of major cities say it takes to be wealthy:
- San Francisco: $4.4 million
- Southern California: $3.4 million
- New York: $2.9 million
- Washington, D.C.: $2.8 million
- Denver: $2.8 million
- Seattle: $2.8 million
- Boston: $2.7 million
- Atlanta: $2.4 million
- Chicago: $2.3 million
- Houston: $2.3 million
- Phoenix: $2.3 million
- Dallas: $2.2 million
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