Investors south of the border show there are some assets that are harder to price
The United States has something of a global reputation for seizing on opportunities for wealth generation.
As the world’s largest economy and with a significant share of the world’s billionaires, Americans appear to aspire to unstoppable riches. But how much do they believe they need to be considered wealthy?
A recent poll by Charles Schwab found a contrast between how people define wealth for themselves compared to how they define it for others.
Putting a dollar-figure on how much it takes be considered wealthy in the US today, the average was US$2.2 million, but digging deeper among those who already considered themselves wealthy, the value of assets required is far lower.
Almost half of respondents said they are wealthy but their average assets totalled $560,000.
But their perception of wealth was driven by non-financial assets: 62% said being able to enjoy healthy relationships with their loved ones better describes wealth than having a lot of money and seven in 10 say wealth is more about not having to stress over money than having more of it.
Wellbeing (40%) beats money (32%) and assets (26%) when poll participants described what wealth means to them.
Among seniors, 79% said that wealth is about enjoying experiences and 83% said it was about not having financial stress.
“Americans today aren’t as worried about keeping up with the Joneses, and more importantly, they understand that they can be happier with fulfilling experiences and relationships, even if they have less money than them,” said Jonathan Craig, managing director and head of investor services at Charles Schwab.
He added that clients are demanding lower barriers to managing their wealth such as low minimums and fees.
Financial plan
The Modern Wealth Survey also asked about financial planning.
It discovered that only about one-third (35%) of Americans have plotted their goals and documented a financial plan. Having a plan is also key to Canadians’ retirement preparation according to a recent report.
For those responding to the Charles Schwab poll without a plan, most say it’s because they don’t have enough money (44%), it’s too complicated (21%) or they don’t have enough time (20%).
