What Does It Mean to Feel Wealthy? The Answer Will Surprise You

When we think about wealth, many of us first think about money, assets, and a luxurious lifestyle. However, a recent study showed that Americans who feel wealthy have a much lower actual net worth than what we might expect. So, what does it really mean to feel wealthy? The answer is surprising.

$2.2 million vs. $560,000

According to the Charles Schwab Modern Wealth survey, Americans said that they need about $2.2 million to feel wealthy. However, the study also found that Americans who feel wealthy have a much lower actual net worth of $560,000.

Despite the fact that the median net worth of Americans is about $120,000, surprisingly half (48%) said they currently feel wealthy. This suggests that wealth may be determined not only by the amount of money and assets you have, but also by how you perceive your own wealth and well-being.

Wealth is more than just money

It is important to note that while financial stability is a crucial component of overall well-being, it is not the sole defining factor of being wealthy. Rather, individuals view having a fulfilling personal life, not stressing over money, having enjoyable experiences, and maintaining a healthy work-life balance as more indicative of true wealth.

These factors suggest that wealth can be subjective, and that it is possible to feel wealthy without necessarily having millions of dollars in a checking account. For example, 47% of individuals surveyed stated that being able to afford a similar lifestyle to their friends is a key part of feeling wealthy. Interestingly, there are significant differences in these preferences among different generations: 61% of Generation Z and millennials place a higher value on this particular factor, compared to only 31% of baby boomers.

Americans value this above all else

Time, the most cherished possession for most Americans, outranks money in terms of importance. A staggering 61% of Americans recognize that time is an irreplaceable and limited resource.

Unlike money, which can always be made, time is an asset that cannot be replenished. This explains why survey respondents willingly prioritize time over financial gain, as they desire a greater sense of freedom and autonomy. Interestingly, among the participants, a higher percentage of baby boomers (67%) deem time as more valuable than money (33%).

Here is the key to meeting financial goals

The survey revealed that a mere 35% of Americans have a written financial plan in place. Those who do, however, are significantly more likely to successfully attain their financial objectives. Astonishingly, 92% of individuals with a plan are more confident in their ability to reach their financial goals.

The primary reason for the majority of Americans not having a financial plan is a common misconception -- they believe that they lack the financial means necessary to justify creating one. However, this belief is, in fact, the opposite of reality.

The truth is that without a well-defined financial plan, individuals may struggle to find ways to increase their wealth and attain financial security. This can result in a never-ending cycle of living from one paycheck to the next.

The concept of wealth varies among individuals. Although Americans believe that $2.2 million is the benchmark, it is important to recognize that wealth is subjective and influenced by various factors. True wealth encompasses well-being and having a fulfilling personal life, as well as having a healthy work-life balance so one can enjoy experiences. As Americans get older, they value time above everything else.

Your personal finances are still important to building wealth, however, so it is important to develop a comprehensive financial plan.