Here's why Americans with $1 million don't think they’re wealthy
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Dylan Croll
Dylan Croll
Sat, November 18, 2023 at 4:40 AM PST·4 min read
Everybody sees millionaires as wealthy, except for millionaires
themselves, a new study suggests.

Only 8% of investors with $1 million consider themselves wealthy, a
recent report from Ameriprise Financial found. Instead, 60% categorized themselves as upper middle class, and a notable 31% considered
themselves middle class. The study revealed wealth is more than just
hitting a specific dollar number or lifestyle. Rather, it's a mindset
and a feeling of security.

"I think that people of wealth tend to be cautious and they tend to be
open minded, and they tend to be intentional," said Kimberly Maez, a
private wealth adviser at Ameriprise Financial. "Whereas it's not
necessarily some of the things we always think it is. It's a little bit
more behavioral mindset focused."

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The study surveyed over 3,000 Americans between the ages of 27 and 77,
roughly 600 of whom were millionaires and revealed insights in their
conception of wealth.

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May 6, 2023; Louisville, KY, USA; Derby hats were plentiful at Churchill
Downs on Kentucky Derby Day in Louisville, Ky. on May 6, 2023. Mandatory Credit: Jeff Faughender-USA TODAY Sports
Of the millionaires surveyed, 62% of them said their top financial
priority was "protecting accumulated wealth," 43% said "saving for
retirement," and 32% said "managing market volatility." Image shows
Kentucky Derby Day in Louisville, Ky., on May 6. (Jeff Faughender/USA
TODAY Sports) (USA Today Sports / reuters)
According to the study, 85% of millionaires believed that wealth meant
"a sense of financial security." Meanwhile, 66% thought of wealth as the ability to provide for themselves and their families, while 58%
associated it with the freedom to do what they wanted.

Maez noted that the rich’s conception of wealth was not necessarily
grounded in luxury.

"It's not like driving supercars necessarily," she said. "It's just
being more cautious and careful in trying to ensure that they are
protecting what they've got because people of wealth also have a little
bit of fear. They know how hard it's been to build it and they know it
can go away quickly."

Still, the study revealed a stark contrast between investors with more
than $1 million and those with less.

Of the millionaires surveyed, 62% of them said their top financial
priority was "protecting accumulated wealth," 43% said "saving for
retirement," and 32% said "managing market volatility."

Read more: Retirement planning: A step-by-step guide

Meanwhile, the study found that 49% of investors with less than $1
million in assets prioritized "saving for retirement," and 42% said
"managing day-to-day living expenses." The study also found that 35%
said "increasing income" and "paying down debt" were big priorities.

Travis Sholin, financial adviser at Keystone Financial Services, pointed
out that regardless of financial status, saving for retirement remains a priority for both the wealthy and the less so. He observed that "there
is an emotional scarcity mindset that is inherent in all people" and
that $1 million no longer has the same value due to inflation and rising
costs of living.

"Those who have accumulated more do not want to lose it, and those still accumulating are still concerned about the day-to-day expenses," he
said. "Both parties want security in their retirement. With increased
inflation and the cost of living, everyone is feeling the pinch right
now. Even the millionaires."

The study found that 49% of investors with less than $1 million in
assets prioritized "saving for retirement."
The study found that 49% of investors with less than $1 million in
assets prioritized "saving for retirement." (Nora Carol Photography via
Getty Images)
Maez said that the wealthy tend to be more risk-averse than they get
credit for. Consequently, they focus on protecting the wealth they have
rather than living extravagantly. She said many of her clients bargain
hunt when shopping and avoid unnecessary expenses.

"Some of the most wealthy people I work with are also some of the most
grounded people. So they don't, they're not caught up in a lot of things
that you can get caught up in."

In fact, only 13% pointed to “luck" as a top driver behind their ability
to amass more than $1 million. Instead, "financial planning and
investing" (80%), "making a good income" (71%), and "living within my
means" (69%) were the top reasons for their success.

Americans could learn from the longer-term millionaire mindset, Sholin said.

"Even for older people…educating themselves and their children and grandchildren about the importance of thinking long term with
investments and wealth," he said. "Because that's really what it comes
down to. If they can psychologically create that long-term mindset,
that's how families become successful."

Dylan Croll is a Yahoo Finance reporter.

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Mark A.
2 days ago
Whether it's 1 million, 2 million, 500 thousand, 50 thousand the mindset
of a person who strives for savings and investment is different from
others. These people know that inflation has eroded money's value. What
is more important to these people is how much they have saved and gained
from investments in relation to the incomes that permitted them to
acquire this wealth, regardless of the amount. "Millionaire next door"
types of people know that the road to financial success is a quiet,
anonymous, and disciplined pursuit. There is a risk-averse mindset, particularly about debt. There's a keen sense of debt level that leads
to asset liquidation in bad times. They don't have stories to tell of
their exploits on travels to faraway lands. They don't boast about the
$400 they spent on a dinner. Their cars, their homes, their attire is
modest. They don't debate cable -vs- streaming because they have always
used broadcast TV. They can walk away from any "deal" in the store. In
these days of inflation, expenses are cut and scrutinized even more.
They walk away from flash-in-the-pan investment gains in favor of what
wins over the long haul. Basically, it's a lot of the Dave Ramsey and
Warren Buffett type of stuff. These people know that 1 million is not
what it used to be. They also know that 1 million saved off of a job
that made the median income over years of work is a major
accomplishment--more so if it is done with minimal, controllable
debt--that few others will attain.

Pam & Chris
2 days ago
The problem is that a million dollars doesn't go as far as it did even
20 years ago. Growing up, (in the 70's & 80's) I thought having a
million dollars meant you were "rich". Middle class homes went for less
than 100K, you could fill a grocery cart for about $75 and gas was less
than a dollar. Today those homes go for 500K+, a cart of groceries can
cost up to $300.00+, and we all know about gas. A million dollars just
isn't worth what it used to be.

Somebody
2 days ago
I'll bet if they asked the lower end of their 3000 survey participants
what they would do if they had $1 million, they would all come up with
myriad ways to spend it. Which explains why they will never have $1
million.


Greg
2 days ago

These people have (at least) two problems:

1. thinking “being rich” means the money never runs out, no matter how
much they spend, and

2. not understanding that no matter how much you have/make, you can
always spend more. There is no limit to what people want.

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