XPost: alt.economics, seattle.politics

from https://www.newtraderu.com/2023/10/31/the-actual-net-worth-to-be-considered-wealthy-not-what-you-think/


The Actual Net Worth To Be Considered Wealthy (Not What You Think)
By Steve Burns
The Actual Net Worth To Be Considered Wealthy (Not What You Think)

What does it take to be considered wealthy? Most people have a set
figure in mind that would define wealth in terms of net worth. However,
new insights reveal that the feeling of being wealthy happens at a much
lower number than the abstract amounts we tend to associate with wealth.

This eye-opening data comes from the latest Modern Wealth Survey by
Charles Schwab. The survey asked Americans two revealing questions –
what level of net worth do they think it takes to be considered wealthy,
and do they feel wealthy currently?

The findings uncovered a surprising disconnect between the net worth
people conceptually link to wealth and the net worth associated with
feeling wealthy. Factors like health, work fulfillment, relationships,
and financial security all contribute significantly to a sense of wealth.

This article will explore the Modern Wealth Survey results in depth,
examining the difference between abstract wealth versus feeling wealthy. You’ll learn about the outsized importance of non-financial factors for
a sense of wealth. Discover what steps you can take to feel wealthy long
before hitting the coveted millionaire net worth number. Let’s dive into
the surprising realities around what makes people feel genuinely rich.

The Net Worth Level That Is Considered Wealthy
The Modern Wealth Survey conducted by Charles Schwab asks Americans what
level of net worth they believe is required to be considered wealthy.
The latest results found that, on average, people think you need a net
worth of $2.2 million to be considered rich. This number has remained relatively consistent over recent years, according to the annual survey.
While $2.2 million represents the abstract number people associate with
wealth, more profound insights from the survey reveal feeling wealthy
happens at a much lower net worth.

Feeling Wealthy Happens At A Much Lower Net Worth
When survey respondents were asked if they feel wealthy currently, the
net worth of those who said yes was around $560,000 – far below the $2.2 million abstract number. This suggests that the feeling of being wealthy
is not solely tied to one’s net worth. Many other factors contribute to
a sense of wealth. The survey uncovered that good health, strong
relationships, a fulfilling job, and financial security are all critical components that make people feel they are wealthy at much more modest
net worth levels.

Health And Work-Life Balance Matter More Than You’d Think
In particular, good health topped the list of non-monetary factors that contribute to feeling wealthy. Having the ability to enjoy life without
health limitations is genuinely priceless. Work-life balance and a job
you find meaningful also ranked very highly in terms of influencing
day-to-day feelings of wealth. The survey shows that money alone does
not determine how wealthy or well-off someone feels.

Develop A Financial Plan To Feel Wealthy And Confident
An interesting finding from the Modern Wealth Survey is that 92% of
people with a detailed financial plan feel confident about reaching
their financial goals. Having a clear plan mapped out, with specific
targets and steps to get there, provides a significant sense of control
and security. Critical elements of a financial plan include budgeting, accounting for expenses, saving for goals, managing debt, and having
proper insurance. Financial peace can make people feel wealthy
regardless of income and net worth.

High-Interest Debt Can Prevent Feeling Wealthy
One area that can detrimentally impact feelings of wealth is
high-interest debt like credit cards. These not only create stress, but
high double-digit interest payments can make it very difficult to get
ahead financially. A financial plan should prioritize eliminating
high-interest debt to provide a feeling of control.

Insurance Coverage Is Vital For Protecting Your Finances
Most Americans are just one major medical event away from potential
bankruptcy without proper insurance. Comprehensive insurance coverage
provides financial security and peace of mind. Understanding what
policies you need, from health, disability, home, auto, and life
insurance, helps protect you from massive unexpected costs.

Make A Retirement Plan Based On Your Unique Vision
Retirement planning is also a key element of feeling financially stable.
You can determine your vision for retirement and calculate the savings
and income needed to make your goal. Retirement can mean different
lifestyles and costs for each person, so planning for it requires
identifying your personal goals.
An Estate Plan Ensures Your Assets Are Handled As You Wish
Finally, having legal documents like wills and trusts dictating how your
assets should be managed if something happens to you helps provide a
feeling of control over your financial legacy. Everyone’s estate
planning needs differ, but most people should at least have basic wills
stating their wishes.

Wealth Is More Than Just Dollars And Cents
As the Modern Wealth Survey demonstrates, feeling wealthy is more than
just accumulating millions in net worth. It also comes from living a
balanced, fulfilling life using money as a tool to enable good life
experiences and security. Don’t simply strive for an abstract net worth number, but instead, determine what makes you feel content on a
day-to-day basis.

Take A Holistic View Of What Makes You Feel Wealthy
True wealth is achieved when you feel confident in your financial
situation, experience joy in relationships, and have good health that
allows you to thrive. You have a purposeful job aligned with your
values. You can take a holistic assessment of all the elements
contributing to your feelings of wealth, not just your bank account balance.

Key Takeaways
The Modern Wealth Survey found people think you need a $2.2 million net
worth to be wealthy, but feeling wealthy happens around $560,000.
Health, work fulfillment, relationships, and financial security are
central to feeling wealthy.
Making a comprehensive financial plan gives confidence in reaching goals. High-interest debt creates stress and prevents building wealth.
Insurance protects against financial catastrophes from unexpected
medical costs.
Custom retirement planning lets you match lifestyle costs to your vision. Estate planning provides control over the handling of your assets.
Wealth is a holistic assessment of life balance, purpose, health, and
finances.
Conclusion
True wealth derives from flourishing in all areas – financial, physical, social, and emotional. While a high net worth provides financial
security, it does not neglect other vital components of a life
well-lived. Assess lifestyle, relationships, work, health, and your
larger purpose when evaluating what makes you feel genuinely wealthy.
The most fulfilling state of wealth comes from achieving balance and
confidence across money, health, community, and meaning.

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