(Bloomberg) — To be wealthy in America, you need at least $2.2 million.
That’s according to Charles Schwab’s 2023 Modern Wealth Survey released Tuesday, which asked a nationally representative sample of Americans to estimate the average net worth required to reach the ranks of the rich.
Despite that lofty sum, 48% of respondents said they already feel wealthy today, with an average net worth of just $560,000. And counter to the narrative that young people are struggling with money, feeling wealthy was most common among millennials and Gen Z, with 57% and 46% respectively reporting that they feel rich compared to just 41% of Gen X and 40% of baby boomers.
The counterintuitive findings demonstrate the difficulties in determining what wealth in America means. With housing prices skyrocketing and inflation pushing up the prices of everyday goods, it takes more money than ever to feel financially secure, especially in cities with a high cost of living. The purchasing power of a six-figure salary goes much further in certain areas of the country than others, while individual circumstances like household size, homeownership and debt can drastically affect feelings of financial health.
“There’s this paradox of people defining wealth differently for themselves versus others,” said Rob Williams, managing director of financial planning and wealth management at Charles Schwab. “When you ask someone for a dollar amount, they don’t put it in the context of the rest of their life and financial health.”
How wealthy people feel is also influenced by their peers. Almost half of survey respondents said being able to afford a similar lifestyle to their friends makes them feel rich, and more than a third of those who use social media say they compare their lifestyles to what their family and friends post online. That’s especially true for millennials and Gen Z.
Still, wealth goes beyond net worth for many Americans. Nearly two-thirds of survey respondents said that having healthy relationships with their loved ones describes wealth to them better than simply having a lot of money. And 70% said that wealth is more about not having to worry about money than having a large bank account.
To contact the author of this story:
Claire Ballentine in New York at [email protected]