Americans Think You Need $2.2 Million to Feel Wealthy. Are They Right?

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What might be considered wealthy for one person may not be the same for another. Read on to learn how Americans classify wealth. 

Money is an important aspect of our lives. From paying the bills to fulfilling our dreams, financial stability is essential. But how much money do we need to feel wealthy? According to a recent survey by Charles Schwab, Americans believe that it takes $2.2 million to be considered wealthy. But is this really the case?

Americans who feel wealthy have a much lower actual net worth

While the survey found that Americans believe you need a net worth of $2.2 million to “be wealthy,” the survey also found that those who feel wealthy (48%) are actually not worth as much. On average, they only have a net worth of $560,000.

This suggests that there is more to wealth than just having a high net worth. It is also about a sense of financial stability, satisfaction with one’s lifestyle, or other non-monetary factors. Wealth is also relative. For example, 47% of individuals surveyed stated that being able to afford a similar lifestyle to their friends is a key factor in feeling wealthy.

Interestingly, there are significant differences in these preferences among different generations: 61% of Gen Z and millennials place higher value in this factor, compared to only 31% of baby boomers.

Wealth is more than money

When asked to describe wealth in their own words, more Americans referenced well-being over money and assets. Americans generally chose non-financial assets when asked to choose which better describes wealth.

This shows that wealth is not just about having a lot of money, but it’s also about having a fulfilling personal life, not stressing over money, having enjoyable experiences, and maintaining a healthy work-life balance.

To feel wealthy, one may not necessarily need millions of dollars in a checking account. It is about having a sense of purpose and fulfillment in life. Wealth can come from pursuing a career that brings joy and satisfaction. It can also come from hobbies, passions, and relationships.

Time vs. money

If there’s one thing that Americans value above all else, it’s time. A whopping 61% of Americans believe that time is more important than money. This mindset is understandable when one considers that time is a finite resource.

Time is a precious commodity, and although you can always make more money, you can never get more time. So, it’s no surprise that the survey participants are willing to sacrifice financial gain for a little more freedom with their time. Baby boomers are more likely to say time (67%) is more valuable than money (33%).

Financial planning is key to meeting financial goals

The survey found that only about a third of Americans (35%) have a documented financial plan. Those who have financial plans are more likely to achieve their goals. In fact, a staggering 92% of people with a plan report feeling confident that they will reach their financial goals.

While creating a financial plan may seem daunting, it’s clear that the benefits are worth the effort. Taking control of your finances can lead to greater peace of mind and increased confidence in your ability to achieve long-term financial goals.

While it may seem counterintuitive, the top reason why most Americans don’t have a financial plan is because they believe they don’t have enough money to warrant creating one. However, in reality, the opposite is true. Without a clear financial plan, you may struggle to find ways to grow your wealth and increase your financial stability, leaving you stuck in a cycle of paycheck-to-paycheck living.

A financial plan provides the necessary roadmap to help you identify your goals, assess your current financial situation, prioritize budgeting, and make informed financial decisions. So, if you’re looking to increase your financial standing and build a secure financial future, the first step is creating a solid financial plan.

The perception of wealth is different for everyone. While Americans believe that $2.2 million is the magic number, the truth is that wealth is subjective and depends on several factors. It is about having financial security, freedom, and comfort, as well as pursuing a life that brings you joy and fulfillment. Take control of your finances by creating a financial plan, so you can achieve wealth in all aspects of your life.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool recommends Charles Schwab. The Motley Fool has a disclosure policy.

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