A new study by Edelman Financial Engines found that Americans in 2023 need more than a million dollars to feel wealthy.
According to the report, 67 percent of Americans need more than $1 million to feel wealthy versus 57 percent who said the same thing last year.
Edelman found that Americans in their 40s need much more to feel wealthy ($2.69 million) when compared to someone in their 70s who said they needed just $500,000 to feel wealthy. On average, Americans said they needed $1.73 million to feel wealthy.
Edelman conducted an online survey of 2,022 Americans who were at least 30 years old in August and September. More than half of the respondents were between the ages of 45-70 and had household assets between $500,000 and $3 million.
Despite that, very few Americans surveyed said they considered themselves wealthy. According to the report, 14 percent of respondents said they were wealthy, up slightly from the 12 percent in 2022.
Edelman puts this change in sentiment towards wealth in large part due to inflation and market volatility.
“Our research shows how the market volatility over the past two years has taken a financial and emotional toll on individuals and families regardless of wealth,” said Kelly O’Donnell, chief client officer at Edelman Financial Engines, in a statement. “We’re seeing how it impacts the big financial moments in life, like deciding when to purchase a home or how to retire, as well as our everyday moments, like buying groceries for our families and filling up the car.”
Over the past few years, rising inflation has negatively affected everything from investor confidence to RIAs’ organic growth rates and it remains a top concern for Americans.
According to the report, 84 percent of Americans said inflation was the top concern. Additionally, money was the leading cause of stress.
Despite that, recession fears fell slightly from last year from 86 percent in 2022 to 78 percent in 2023.
Concerns around the political climate as the U.S. goes into a presidential election year was the number one worry for affluent individuals, and nearly half of affluent consumers said that politics was their biggest source of stress.
Credit card debt rose to its highest level this year, according to the report, with credit debt surpassing the $1.08 trillion mark. About 40 percent of Americans across all wealth brackets and 32 percent of the affluent said that credit card debt is the biggest obstacle to their ability to build wealth. Thirty-three percent said they were uncomfortable with the amount of debt they accumulated this year, and 24 percent of affluent said they felt emotionally burdened with what they put on credit.
Edelman found that working with a financial advisor helped alleviate financial stress, with 76 percent of those with a financial advisor stating they felt less stress about finances because of the help they get.
“No matter how you feel or where you are in your wealth-building journey, a trusted advisor can help navigate a broad range of ‘life and money’ issues,” said O’Donnell. “Insights from research like this deepens our understanding of the challenges Americans face and helps us guide our clients on their own path to everyday wealth.”
