Two-Thirds Of Millionaires In America Don’t Think They’re Wealthy, According To Survey
Is wealth something that's even attainable anymore?
Hryshchyshen Serhii | Shutterstock In an economy that continues to struggle, more and more people are finding themselves in financial trouble. While it may surprise some, it turns out that even millionaires feel this financial strain.
A new survey shows that millionaires don’t actually consider themselves wealthy. But, if being a millionaire in America isn’t what it takes to be wealthy, then what is?
A survey shows that only one-third of millionaires think of themselves as wealthy.
Northwestern Mutual recently released its Planning and Progress Study 2024. The study covered a number of economic subjects, like how AI is affecting money, why Americans are in debt and how much money you really need to retire.
One category examined by the survey was that of “high net worth individuals.” Northwestern Mutual defined these people as those with a minimum of $1 million they could invest today.
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According to the survey, “Just one-third (32%) of American millionaires consider themselves ‘wealthy.’”
This will be surprising news for many. Who hasn’t, at some point, dreamed of knowing what it’s like to be a millionaire? Surely, that kind of money could fix almost any problem, right?
The real millionaires don’t think so. In Short News, who reported on the survey, said, “For the rest, wealth seems more subjective and influenced by personal circumstances, such as where they live and their family responsibilities.”
Northwestern Mutual pointed out that there was something that differentiated millionaires from others, even if it wasn’t thinking of themselves as wealthy.
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“Rather than feeling rich, American millionaires — those with at least $1 million in investable assets — are far more likely to exhibit feelings of financial clarity and preparedness than the general population,” they said.
Unsurprisingly, millionaires feel more prepared for retirement than others, both in the sense that they know how much money they will need and they believe they will have it.
$1 million certainly isn’t worth what it used to be.
Due to inflation, money is valued differently. Today, $1 million isn’t nearly as much as it once was. Per Investment News, “$1 million in 1960 — around the time when having $1 million took hold in the popular imagination as a symbol of ultimate wealth — had the buying power of approximately $8 million today.”
This could definitely be one reason why today’s millionaires don’t consider themselves to be as wealthy as previous generations have.
Investment News said that inflation has remained at around 2.75% for years. “If we use that inflation rate as a rough guide, the equivalent of $1 million in 2014 will be $5 million in 2074 (in 60 years),” they reported.
In other words, in 2074, it will take around $5 million to equal what was $1 million 60 years prior.
The cost of living could also be related to how millionaires see themselves.
Another factor at play in whether or not millionaires see themselves as wealthy could be extreme cost of living increases in the United States.
Cost of living, of course, varies by location. According to Forbes Advisor, Hawaii is the state with the highest cost of living — “an average annual expenditure of $55,491.”
CNBC Select said that it is typically appropriate to save 20% of each paycheck you earn. If you’re living in a state where you must spend over $55,000 a year to live but still want to save 20% of each of your paychecks, an ideal financial situation could turn into being a millionaire very easily.
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As Forbes Advisor also pointed out, a certain amount of money may mean different things in different places. $1 million may not be worth as much in Hawaii as it is in Mississippi, the state with the lowest cost of living.
Some may think it’s selfish to be a millionaire and not think of yourself as wealthy. However, when you consider what $1 million is in today’s economic context, it becomes more understandable.
Mary-Faith Martinez is a writer for YourTango who covers entertainment, news, and human interest topics.