Does being rich necessarily make you wealthy? The majority of Americans don't think so.
What To Know: According to Charles Schwab Corp's SCHW annual Modern Wealth Survey, there's a wealth paradox in America. That is, there's a stark contrast between how people define wealth for themselves and how they define it for others.
Schwab found that the average American believes it takes a net worth of $2.2 million to be considered wealthy, but about half of respondents who said they currently feel wealthy have an average net worth of about $560,000. That's because non-financial assets resonate more with people when asked how to define wealth.
"When asked to characterize what it means to be wealthy in their own words, Americans mention their well-being (40%) more often than money (32%) and assets (26%)," the survey states.
70% of Americans said wealth is more about enjoying experiences than about owning nice things. Seventy percent also said the purpose of building a high net worth is about not having to stress over money. Wealth is also more about having a healthy work-life balance and being healthy than it is about maximizing earnings potential and being successful.
"Americans today aren’t as worried about keeping up with the Joneses, and more importantly, they understand that they can be happier with fulfilling experiences and relationships, even if they have less money than them," said Jonathan Craig, managing director and head of investor services at Charles Schwab.
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The trends in the responses were even higher among older generations, while younger generations are more likely to let social media influence their assessments of wealth.
61% of Gen Z respondents said being able to afford a lifestyle similar to their friends makes them feel wealthy, while just 31% of baby boomers felt that way. Meanwhile, 54% of GenZ respondents compare themselves to others on social platforms, and that number steadily trends lower as you traverse generations.
"Social media can create new uncertainty and doubts for Americans when it comes to how wealthy they feel and resurface the tendency to compare themselves to their social circles," the survey states.
Photo: S K from Pixabay.
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