Wealth is in the eye of the beholder, and as inflation squeezes American families in a cost-of-living vise, the dollar number to be considered rich rises ever higher.
So how much money do you need to feel well off right now? New research from Charles Schwab has put an exact figure on it.
Schwab’s 2023 Modern Wealth Survey asked 1,000 Americans to estimate the average net worth required to reach the ranks of the rich and to be considered wealthy in America, and it turns out you need at least $2.2 million to your name.
But if that lofty figure has left you feeling deflated about your own net worth, don’t panic: That’s the estimate respondents gave for other people.
The research reveals that most people are satisfied with a significantly lower sum when reflecting on their own affluence.
In fact, 48% of respondents said they already feel wealthy today with an average net worth of just $560,000—about a quarter of what they think others need to be rich.
Gen Z and millennials feeling the wealth
Paradoxically, young people feel like the richest.
Despite being the generation to miss out on lower property prices, small student loans and high-end Champagne for as little as $13, feeling wealthy was most common among millennials, followed by Gen Z.
Around 57% and 46% of millennials and Gen Z respectively reported feeling rich, compared to just 41% of Gen X and 40% of baby boomers.
It could be because, as the research shows, many don’t measure their own wealth by how much money is lining their pocket.
For nearly two-thirds of Americans being able to enjoy healthy relationships with their loved ones better describes wealth than simply having a lot of money.
Meanwhile, for around 70% of those surveyed, wealth is about enjoying experiences and work-life balance, compared to just 38% of respondents who think it's about having a lot of money.
Sizing up your peers makes you feel poorer
Former U.S. President Theodore Roosevelt once said: "Comparison is the thief of joy". And Charles Schwab’s research backs that up.
Although young people are more likely to feel wealthy, they’re also more likely to feel poor in the aftermath of scrolling on social media and sizing up the lifestyle of their peers.
While only a third of boomers dictate their worth based on what their cohort is up to, 61% of Gen Z and millennial respondents said being able to afford a lifestyle comparable to their friends makes them feel rich.
Meanwhile, around half of millennials and Gen Z are guilty of comparing their lifestyle to what their family and friends post online, compared to just 13% of boomers.
