Answer: Americans say it takes over $2 million dollars to be rich
Back in the day, making a million dollars meant you were set. This was a nice, round, seven-figure number that brought with it a certain social status – you were a “millionaire”. While a million dollars is still a ton of money, apparently it doesn’t hold the same weight anymore. In Charles Schwab’s annual Modern Wealth Survey, Americans said it took about $2.27 million dollars to be considered “rich”. This was notable not only because of the inflationary increase but also from a self-perception standpoint. Moreover, there seems to be a disconnect. Right now 60% of the respondents said that they are optimistic that they will someday be wealthy, or that they already have this level of wealth. Here’s the thing – Charles Schwab noted that this is “more than 20 times the actual median net worth of U.S. households.”
While this was an eye-catching statistic, Charles Schwab actually began the presentation with another equally interesting observation, which was that Americans pay more attention to how their friends spend than how they save. For example, more than a third of Americans say their spending habits have been influenced by friends’ social media feeds and confess they spend more money than they can afford due to “FOMO,” or the fear of missing out. Not only this, but 60% of Americans wonder how their friends can afford expensive experiences posted on social media. The major takeaway from this section was that overall, social media has a mostly negative influence on money management, and it makes sense. It’s not glamorous to post a picture of yourself going to the bank to deposit a portion of your paycheck into your savings account or making a wise investment. People post pictures of the money they spend on nonessential goods and services like brunch and vacations.
What’s interesting is that despite social spending, Americans consider themselves savers. To the point above there’s a disconnect between perception and reality, however. While 59% of people consider themselves savers, putting money away is still something Americans struggle with. Close to 60% live paycheck to paycheck, 44% usually carry a credit card balance or struggle to keep up with bills/payments, only 38% have built up an emergency fund, and only 28% of Americans have a written financial plan. Being “wealthy” has more to do than simply earning over $2.27 million dollars. Some of the richest people in the world are the least happy. With that said, it never hurts to take care of your finances and think seriously about investing and saving.