The definition of 'wealthy' is a moving target, depending on the economy and prevailing politics. To some in the White House, a salary of $250,000 a year is wealthy, to others, it's barely a living wage.
But millionaires have their own benchmarks. According to a Fidelity Investments survey of more than 1,000 millionaires (households with at least $1 million in investible assets, excluding retirement accounts and real estate), 42% of respondents say they don't feel wealthy. Keep in mind that while $1 million is the threshold, this group has an average net worth of $3.5 million.
That 42% is slightly better than the 46% who said they didn't feel wealthy in 2009. So the recovery has, at least, made some miserable millionaires a little less miserable.
Those who don't feel wealthy were asked how much money they would need to feel wealthy. Their answer: $7.5 million. (That's the median asset level).
But here's the interesting twist. The 58% of millionaires who did feel wealthy were also asked how much money they had when the began to feel 'wealthy.' Their answer: $1.75 million.
So millionaires who don't feel wealthy say they would need $7.5 million to feel wealthy, while those who do feel wealthy need only $1.75 million.
Is this the hedonic principal in overdrive, suggesting that the more you have the more you need? Or did Fidelity stumble onto some sub-culture of Zen millionaires who have found inner peace at $1.75 million?
Fidelity's Mike Durbin, president of Fidelity Institutional Wealth Services and Sanjiv Mirchandani, president of Fidelity's National Financial unit, said the answer lies in the demographics of the two groups.
The 'not wealthy' group tended to be older, so they have less time to get richer and meet their expected retirement needs. The 'feeling wealthy' group is younger, so they have time to get richer before retirement.
'Those who felt wealthy at that lower amount tended to be younger, so time is their greatest ally in their pursuit and retention of wealth,' Durbin said.
Why do you think there's such a wealth gap between the millionaires who feel wealthy and those who don't? How much do you need to feel wealthy? |