The New Frontier of Wealth: A Refreshed Take on the Net Worth Requirement
Table of Contents
Defining Wealth
Who qualifies as rich today? The bar for being considered wealthy is shifting, as most people now believe that merely being a millionaire doesn’t cut it.
A Surprising Answer
An annual survey from Charles Schwab asks Americans how much net worth it takes to be wealthy. This year, the average answer was $2.5 million, up from $2.2 million in the last two iterations of the survey.
Varying Definitions
Older generations and residents of expensive cities like San Francisco had the highest thresholds for what net worth qualified as wealthy. Generally, the survey found significant variance in answers based on age and city of residence.
A Professional’s Perspective
“‘Wealth’ means different things to different people,” Rob Williams, managing director of financial planning at Charles Schwab, said in a release. But for many Americans, reaching “a certain dollar amount” is a key part of how they think about achieving wealth, he added.
A Tiny Fraction of Americans
The results of the Schwab survey suggest only a tiny portion of people are rich. If $2.5 million is what it takes to be wealthy, about 2% of Americans actually meet the criteria.
A Pessimistic View
Americans are also somewhat pessimistic about their chances of becoming wealthy. About 10% say they’re wealthy now, and 21% say they’re on track to get there. “Younger Americans, including Millennials and Gen Z, are the most optimistic about being wealthy in their lifetimes (29%),” Schwab said in the release.
A More Realistic Threshold
It takes a lot less wealth to be considered “financially comfortable,” according to the survey. The average net worth people think it takes to be comfortable is $778,000, which is actually down from a peak last year of about $1 million.
Breaking It Down by Generation
- All Americans: $2.5 million
- Boomers: $2.8 million
- Gen X: $2.7 million
- Millennials: $2.2 million
- Gen Z: $1.2 million
Breaking It Down by Location
- San Francisco: $4.4 million
- Southern California: $3.4 million
- New York: $2.9 million
- Washington, D.C.: $2.8 million
- Denver: $2.8 million
- Seattle: $2.8 million
- Boston: $2.7 million
- Atlanta: $2.4 million
- Chicago: $2.3 million
- Houston: $2.3 million
- Phoenix: $2.3 million
- Dallas: $2.2 million
