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.