Understanding Wealth in 2023
In a year marked by economic shifts and uncertainties, Americans grapple with redefining what it means to be wealthy. Five key figures provide insight into the evolving perception of wealth in the United States.
1. The Millionaire’s Benchmark: $2.6 Million
The benchmark for wealth in 2023 America sets the net worth of the median American family in the top 10% of income at $2.6 million. This figure signifies the attainment of wealth, as stated by Cristian deRitis, Deputy Chief Economist at Moody’s Analytics. While the economy experienced substantial growth between 2019 and 2022, inflation and rising interest rates have cast a shadow over the celebration. Economic expert Robert Brokamp points out the market’s challenges.
2. Aspiring Wealth: $483,000
A survey by Bankrate, conducted in June 2023, reveals that Americans believe they would need to earn $483,000 annually to be considered rich. A staggering six times the average salary of full-time workers in 2021. As inflation and rising interest rates persist, 72% of Americans express financial insecurity. However, experts stress that wealth transcends income, considering assets and debts.
3. Rethinking Wealth: $2.2 Million
According to the Charles Schwab Modern Wealth Survey, the perception of wealth in 2023 has shifted, now requiring $2.2 million. In 2020, this figure was higher, reflecting a change in perspectives about financial well-being. Rob Williams, Managing Director at Schwab, highlights the emotional aspects of feeling wealthy, emphasizing it’s more about what wealth means rather than the exact figure.
4. The Reality of Feeling Wealthy: $560,000
Despite aspirations of $2.2 million, the average net worth at which Americans feel wealthy is $560,000, as per the Schwab survey. Nearly half of Americans experience a sense of wealth, underscoring the gap between aspiration and reality. This underscores that feeling wealthy encompasses more than just financial assets. It includes well-being, health, and quality time with loved ones.
5. The Magic Number: $1 Million
While the term “millionaire” has evolved, it remains a symbolic milestone. Matt Schulz, Chief Credit Analyst at LendingTree, acknowledges that $1 million signifies a level of wealth most can only dream of. Vanguard defines $1 million in investments as high net worth. However, experts emphasize that wealth extends beyond numbers. Financial security hinges on the ability to meet financial goals and withstand financial shocks.
In summary, wealth in 2023 America isn’t solely determined by figures. It encompasses emotional and tangible aspects, including well-being, financial security, and the freedom to pursue personal goals and passions.