- Americans think $ 1.9 million is wealth – $ 700,000 less than they said before the pandemic, according to one new Charles Schwab report.
- They have also lowered the net worth bar that they believe is necessary for financial happiness.
- The changes are the result of Americans re-prioritizing their values during the pandemic.
- See more stories on the Insider business page.
The bar for being rich is not as high as it used to be.
Americans have changed their definition of the rich in the wake of the pandemic, say Charles Schwab Modern Wealth Survey 2021, which surveyed 1,000 Americans. Respondents said they believed it took an average of $ 1.9 million to be considered rich – $ 700,000 less than the $ 2.6 million that meant rich in the pre-pandemic 2020 version of investigation.
They also dropped the benchmark for the amount of wealth needed to achieve financial happiness and financial comfort. In their eyes, it now takes an average net worth of $ 1.1 million to be considered financially happy, up from $ 1.75 million a year ago. For greater convenience, expectations have dropped from $ 934,000 to $ 624,000.
These changes are part of a wider reassessment among Americans caused by the pandemic, according to the survey. The majority (68%) have redefined their priorities and 69% feel that mental health is more important than before, followed by 57% who place new ones. emphasis on relationships. Financial health comes third on the list, at 54%.
Rob Williams, vice president of financial planning at Charles Schwab, said in the report that while the pandemic has caused Americans to put more emphasis on health, the
also taught several about the importance of financial planning.
“The pandemic and its significant impact on the economy and the stock market have also taught us a valuable, and in many cases difficult, lesson about the importance of financial health and preparedness, including the importance of have an emergency plan and savings, ”he said.
Another recent survey that looked at perceptions of wealth in the United States, conducted by Boston Private, found that affluent millennials were the wealthiest cohort to say the pandemic had changed the way they defined wealth. More than three-quarters thought this way, compared to less than a quarter of wealthy baby boomers and members of the silent generation.
As the economy closed, those lucky enough not to lose their jobs were able to put away their discretionary savings or invest in a rebounding stock market. Savings increased at all levels during the pandemic as the U.S. household net worth hits record high high in the fourth quarter, up 5.6% from the third quarter. Americans were sitting on $ 2.6 trillion excess savings in mid-April, according to Moody’s Analytics.
The rich got richer as the coronavirus recession took a K-shaped recovery in which the rich were doing very well and the poor continued to struggle. As wealth inequality increases, wealth seems to mean less to some Americans than it once did.
Maybe during a pandemic people realized that money can’t buy everything.