Why America's Richest Millionaires Don't Consider Themselves ‘Wealthy’

They might belong to the two-comma club, but don’t call them “wealthy.”

Nearly two-thirds (64%) of U.S. millionaires don’t consider themselves to be "wealthy," according to a new report from insurance firm Northwestern Mutual. The share of millionaires shunning the term is down slightly from last year — the first time the firm asked the question — when 68% of millionaires said the same.

“A million dollars is undoubtedly a substantial sum, but money alone does not inherently create financial confidence,” Douglas Benson Jr., founder of Benson Wealth Management, says in an email.

Typically, when calculating net worth, people factor in retirement accounts and property. By that definition, about 24 million Americans are millionaires.

However, Northwestern Mutual defines “millionaire” not by net worth but by owning at least $1 million of investable assets, excluding retirement accounts and homes. Under this strict definition, far fewer qualify, but the exact number is difficult to pin down.

A separate wealth gauge by Capgemini reveals that about 7.9 million Americans own at least $1 million of investable assets. Only 3% of U.S. adults meet that definition, although this measure is also broader than Northwestern Mutual’s because it includes retirement accounts.

The millionaires included in Northwestern's study provide a glimpse of the nation's richest people who not only have net worths of $1 million — but have at least $1 million readily available in their financial accounts.

Why don’t America’s richest feel ‘wealthy’?

Money asked certified financial planners, or CFPs, who advise high-net-worth people whether the trend holds true for their clients — and why they might feel that way.

Eric Roberge, founder of the Boston wealth management firm Beyond Your Hammock, says one of his clients, who has over $3 million in investable assets, recently asked him: “Why do we feel so poor?”

According to Benson, whose Iowa-based firm is affiliated with Northwestern Mutual, there are several social and economic factors that come into play that keep millionaires from feeling wealthy, despite owning more assets than approximately 97% of U.S. adults.

On the economic side, recent bouts of inflation have eroded the buying power of $1 million. And in certain areas of the country with disproportionately high costs of living, $1 million “may not provide the expected financial comfort,” Benson says.

Still, even in New Mexico, “that trend absolutely rings true,” says Nathan Sebesta, owner of Access Wealth Strategies.

For many of his high-net-worth clients, the social factors are more heavily at play, as they often compare themselves to other people who are multimillionaires or even billionaires.

“Wealth has become a moving target,” he says.

Roberge explains that people often need to have more than the people around them to “feel wealthy.” But he says, as people accumulate vast sums of wealth, the people around them tend to change: different friends because your kids are now in private school, different neighbors because you live in an exclusive neighborhood and different colleagues because you landed an executive role at a major company.

“Now [you’re] surrounded by people who have even more than you — even though you're well-off, too,” he says. “It's a never-ending cycle, and the people who do not recognize this effect will always feel behind.”

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