How much money would you need to have before you’d feel “wealthy”? That was the topic of a recent survey of high net worth investors by Fidelity Investments, and the results were quite interesting.
The survey was based on 1,000 millionaire households, where “millionaires” were defined as having a minimum of $1M in net investable assets, excluding retirement accounts and real estate. Despite the $1M cutoff, the average net worth (again, in terms of investable assets) of those who were surveyed was actually $3.5M.
Overall, 42% of respondents reported that they didn’t feel wealthy despite having $1M+ in their savings account, investment portfolio, etc. When asked how much it would take for them to feel wealthy, the average response was $7.5M.
Yes, you read that right – 7.5 million dollars.
Assuming a safe withdrawal rate of 4% per year, that $7.5M portfolio would generate $300,000 in annual income. And that’s ignoring retirements savings as well as real estate values!
While I realize that a million dollars ain’t what it used to be, that number seems rather high to me. When I asked my wife how much she’d need to feel “wealthy,” she said somewhere between $1M-$2M, and that would include the value of our house as well as our retirement accounts. Interestingly, when I asked our 9 year old son how much money he thinks it takes to be rich, he thought for a moment and then replied $1.5M – I guess the acorn doesn’t fall far from the tree. 🙂
What about you?
How much in the way of “net investable assets” (i.e., money in the bank, stock market, etc.) would it take for you feel wealthy? Would a million dollars do it? More? Less? Please share your thoughts in the comments.