The latest Charles Schwab Modern Wealth Survey offers fascinating insights into how Americans view and define wealth in 2023. The survey, conducted online in March 2023 among 1,000 U.S. adults aged 21-75, reveals an intriguing “wealth paradox” among Americans.
The Wealth Paradox
While Americans on average say they need a net worth of $2.2 million to be considered “wealthy,” the survey found that those who actually feel wealthy have a much lower average net worth of just $560,000. This suggests a significant disconnect between perceptions of wealth and the financial realities.
Interestingly, Millennials are the most likely generation to feel wealthy, with 57% reporting they feel very or somewhat wealthy, despite having an average net worth of just $ 410,000 among those who feel wealthy.
Defining Wealth Beyond Finances
When asked to define wealth in their own words, more Americans referenced well-being, health, and relationships over pure financial measures like money and assets. This suggests the modern view of wealth is evolving beyond just numbers and material possessions.
In fact, when given a choice, the majority of Americans indicated that non-financial factors like having a fulfilling personal life, low financial stress, and work-life balance are more important to them than having a higher salary or more money than their peers.
Barriers to Financial Planning
The survey also explored why many Americans lack a formal, documented financial plan. The top reasons cited were not having enough money to need a plan (44%), the perceived complexity of creating a plan (21%), and not having time to develop one (20%).
Interestingly, those who do have a financial plan feel more in control of their finances, and 92% are confident they’ll reach their financial goals.
The Role of Social Media
Social media appears to play a complex role in how Americans perceive and compare their own wealth. Over a third (37%) of respondents agree that being able to afford a similar lifestyle as their friends makes them feel wealthy. And many, especially younger generations, admit to comparing their finances and lifestyle to what they see on social media.
In fact, over half of Gen Z and Millennials say they find their views of wealth are influenced by what people post on social media, and nearly half make financial decisions based on what they see their peers and influencers share.
Overall, the Charles Schwab Modern Wealth Survey paints a nuanced picture of how Americans define, perceive, and approach wealth in 2023. As the definition of wealth evolves, understanding these shifting attitudes and barriers will be crucial for financial advisors, policymakers, and individuals seeking to build long-term financial security.
Link to the Document (PDF): Schwab Modern Wealth Survey 2023 findings
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