In 2024, Charles Schwab’s Modern Wealth Survey revealed that the bar for what Americans consider “wealthy” has risen.
According to the survey, the average American believes it now takes a net worth of $2.5 million to be considered wealthy in today’s economy. Last year and in 2022, it was $2.2 million. While this number represents a national average, the definition of wealth varies across generations and regions, offering a deeper insight into how different groups view financial success.
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Baby Boomers set the bar the highest when broken down by generation, with a $2.8 million net worth required to feel wealthy. Gen Xers come in just behind at $2.7 million and Millennials place the figure lower, around $2.2 million.
The surprising outlier is Gen Z, who believe that a net worth of just $1.2 million makes someone wealthy – almost half of what Millennials think. This generation’s lower threshold likely reflects their current economic realities. Housing costs have surged and wages haven’t kept up, making financial security harder to attain.
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According to a recent Acorn survey, nearly 30% of Gen Z fear homelessness, which shows just how tough things have become for this group. Even when it comes to feeling financially comfortable, Gen Z’s expectations are significantly lower. They believe a net worth of $406,000 would make them feel secure, over $300,000 less than Millennials’ benchmark of $725,000.
However, despite these challenges, younger Americans remain optimistic. Nearly 29% of Millennials and Gen Z feel confident about their chances of someday becoming wealthy. The rise of new ways to make money, such as investing through apps or creating content online, likely fuels their optimism.
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The survey found that having a financial plan is crucial for confidence in reaching financial goals across all generations.
Geography plays a big role in what people consider to be wealthy. Unsurprisingly, California leads the pack with the highest thresholds. San Francisco Bay Area residents believe it takes $4.4 million to be wealthy, while those in Southern California set the figure at $3.4 million. Other major cities also have high standards for wealth, with New Yorkers setting the bar at $2.9 million and residents of Washington, D.C., Denver and Seattle agreeing on $2.8 million.
Even though many Americans are hopeful about their financial future, the survey reveals that only 10% currently feel wealthy. About 21% believe they are on track to becoming wealthy someday, but less than one in five (18%) say they are truly on top of their finances.
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Most respondents acknowledged room for improvement, with 32% saying they’re making progress but aren’t quite there yet and another 34% admitting they need to make changes to feel more financially secure.
Grades are also part of the story. When asked how they rate themselves regarding personal finance, many Americans give themselves passing marks. About 63% feel good about how much they’ve saved and 67% are happy with their investments. However, those with a financial plan give themselves much higher grades. Among this group, 86% feel confident about their savings and investments and 88% believe they are well-prepared for retirement.
Ultimately, while people’s perceptions of wealth differ across generations and regions, one thing remains clear: having a financial plan makes people more confident and hopeful about their future.
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This article How Much Do You Really Need to Be Rich? Here’s The Magic Number People Now Say Is ‘Wealthy’ originally appeared on Benzinga.com
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