By Matt Turner
June 15, 2023
Do you feel wealthy?
That's one of the questions Schwab asked 1,000 Americans recently, with 48% saying they felt very or somewhat wealthy.
- A new survey found perceptions of wealth were shaped by being able to afford a certain lifestyle.
- Younger generations said being able to afford their friends' lifestyle made them feel wealthy.
- The survey also found that for many, wealth resides in relationships and experiences.
One of the fascinating things about wealth is it's often in the eye of the beholder, and the survey identified several trends in how these perceptions of wealth are formed. For example:
- Sixty-one percent of Gen Z respondents and millennial respondents said "being able to afford a similar lifestyle as my friends makes me feel wealthy." For boomers, this was just 31%.
- Similarly, 54% of Gen Zers said they compared their lifestyle with their friends' and family's on social media. This dropped to 13% for boomers.
- More than half of Gen Zers (53%) and millennials (51%) said their views of wealth were influenced by what people post on social media.
- Forty-six percent of Gen Zers said they felt somewhat or very wealthy, with this number rising to 57% for millennials.
"Whether it's the fear of missing out or the desire to keep up, there are many factors that can make you feel pressured to spend money on things that may not have long-term value," Rob Williams, a managing director of financial planning and wealth management at Charles Schwab, said in a statement announcing the survey results.
While it might be tempting to suggest, based on these survey results, that Gen Zers and millennials are focused on keeping up with the Joneses, the truth is more nuanced.
Millennials and Gen Zers face pretty specific financial challenges, particularly around housing and student debt. Younger American have good reason to feel economic anxiety.
But it's also true that those feelings might be exacerbated by the superficial depictions of success and wealth they see on social media. An Instagram pic or TikTok video showing a luxe outfit or accessory might create a jolt of jealousy, and create the impression that everyone else has more money than they do.
The survey found, for example, that respondents across the US considered an average net worth (assets minus liabilities) of $2.2 million to be the mark of wealth for an individual.
That's especially striking when one considers that a household wealth of $1.4 million would rank in the top 10% nationally, per data from the Census Bureau. The average American family had a net worth of about $750,000 in 2019, per the Federal Reserve.
In other words, the perception of how much money is required to be wealthy most likely outstrips the reality.
One of the most interesting findings from the survey arrives when respondents were asked which statement best described how they thought about wealth.
If you've ever answered one of these questions in a survey, you'll know that having to choose one from two forces you to pick your priorities. You may want lots of money and a wonderful work-life balance, but you have to put one above the other.
And here, the vast majority of respondents of all age groups put having a joyful, balanced life filled with great relationships ahead of maximizing money, accumulating material possessions, and being wealthier than the next person.
For example, 72% said "having a fulfilling personal life" better described wealth than "working on my career."
Similarly, "not having to stress over money" was more than twice as popular as "having more money than most people I know."
And "enjoying healthy relationships with family and loved ones" was comfortably ahead of "having a lot of money."
What does this all add up to?
Obsessing over stylized social-media shots of your friends on vacation has the potential to warp your sense of financial well-being.
Putting the cellphone down to enjoy experiences and spend quality time with loved ones on the other hand might just boost your sense of wealth.
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