Here's why Americans with $1 million don't think they’re wealthy (2024)

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."

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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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."

Here's why Americans with $1 million don't think they’re wealthy (2)

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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Here's why Americans with $1 million don't think they’re wealthy (2024)

FAQs

What percentage of Americans have a net worth of over $1000000? ›

Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.

What does the average American think is rich? ›

In the United States, the concept of being rich is often a subject of discussion, curiosity and, sometimes, aspiration. Charles Schwab's 2023 Modern Wealth Survey provides insights into this topic, revealing that the average American equates being wealthy with a net worth of approximately $2.2 million.

What salary is considered rich for a single person? ›

Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.

How much net worth is considered rich? ›

According to Schwab's 2023 Modern Wealth Survey, Americans perceive an average net worth of $2.2 million as wealthy​​​​. Knight Frank's research indicates that a net worth of $4.4 million is required to be in the top 1% in America, a figure much higher than in countries like Japan, the U.K. and Australia​​.

What is top 5% net worth in US? ›

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  • People with the top 1% of net worth in the U.S. in 2022 had $10,815,000 in net worth.
  • The top 2% had a net worth of $2,472,000.
  • The top 5% had $1,030,000.
  • The top 10% had $854,900.
  • The top 50% had $522,210.

How many people have $3,000,000 in savings in usa? ›

1,821,745 Households in the United States Have Investment Portfolios Worth $3,000,000 or More.

What salary is considered upper middle class? ›

Middle class: Those in the 40th to 60th percentile of household income, ranging from $55,001 to $89,744. Upper middle class: Households in the 60th to 80th percentile, with incomes between $89,745 and $149,131. Upper class: The top 20% of earners, with household incomes of $149,132 or more.

What yearly salary is considered middle class? ›

By the Census data, it means that if you earn between $50,000 and $150,000 a year, you are considered middle class. It's a pretty straightforward answer, but it isn't particularly helpful if you're trying to climb up out of a lower income bracket into the middle class.

What is considered wealthy in retirement? ›

$1 million, $5 million, $10 million

However, if you have $1m, are retired and are living an expensive lifestyle, you might go from wealthy to poor in a relatively short period of time. The Schwab survey found that overall, Americans say they need: $1.9 million to be wealthy in 2021 (down from $2.6 million in 2020)

How many rich people live paycheck to paycheck? ›

Among those earning $100,000 or more, the PYMNTS report revealed that only 45 percent reported the struggle of living paycheck to paycheck.

What is considered wealthy in 2024? ›

The report found that breaking into the world's top-one-percent club is getting more difficult every year. In the U.S. in 2023, individuals needed a net worth of $5.1 million to be considered in the richest echelons of society. By 2024 this figure rose to more than $5.8 million, an increase of approximately 14%.

Can you live comfortably on 200k a year? ›

It's not a great income (like the top 10% or higher), but it's also better than the median income. It is a good income. If you accept my definition, then a good household income would be $130,000 per year (in 2022) and a good individual income would be $82,000 per year (in 2022).

How can you tell if someone is rich? ›

6 Subtle Signs That Someone Is Wealthy
  1. They Have a Calm, Confident and In-Control Vibe. ...
  2. They're Resilient. ...
  3. They Have an Elegant but Understated Sense of Style. ...
  4. They're Well Connected. ...
  5. They're Financially Literate.
Nov 24, 2023

Is 1 million net worth considered rich? ›

$1 million

“It doesn't mean your life is easy or that you're Jeff Bezos or Bill Gates, but it does mean that you have a level of wealth that most people can only dream of attaining.” Vanguard, the investment management company, defines $1 million in investments as high net worth.

Does net worth include home? ›

Your net worth is what you own minus what you owe. It's the total value of all your assets—including your house, cars, investments and cash—minus your liabilities (things like credit card debt, student loans, and what you still owe on your mortgage).

How many people have a net worth over $1000000? ›

The number of adults with assets of more than $1 million fell from 62.9 million at the end of 2021 to 59.4 million at the end of 2022, according to the UBS's annual wealth report—and it's the sharpest fall since the 2008 financial crash.

What is the net worth of the top 0.1 percent? ›

As of the second quarter 2023, the average American household had wealth of $1.09 million. The average wealth of households in the top 1 percent was about $33.4 million. In the top 0.1 percent, the average household had wealth of more than $1.52 billion.

How many people have a net worth of $1000000? ›

Let's break it down with a cold splash of truth. There are about 22 million people in the US sitting on a net worth of over $1 million. That might seem like a hefty squad of millionaires to you, but let's put things into perspective. That's less than 7% of the U.S. adult population, my friend.

What is the net worth of the top 10 percent? ›

According to the October 2023 Survey Of Consumer Finances, a household net worth in the top 10 percent in 2022 was approximately $7.8 million. Consequently, a top 1% net worth would exceed $13 million.

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