What It Means to Be ‘Wealthy’ in America Today

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Correction appended: July 24, 2013, 11:03 p.m. E.T.

The rich don’t really think they’re rich. In a new survey, the vast majority of investors with $1 million in assets don’t consider themselves wealthy. Which brings up the question: What do the terms rich and wealthy really mean?

A new report from UBS surveyed investors who on the surface all appear to be pretty well off. Of the survey’s 4,450 participants, half had $1 million or more in investable assets, and all had at least $250,000 in investments. Compared with the huge portion of the population that barely has any savings — about half of Americans don’t have an emergency fund that’d cover three months of expenses — it sure seems like the people in the survey are doing quite well financially. But do these people think they’re rich? For the most part, the answer is no.

Of those with investable assets worth $1 million to $5 million, only 28% answered yes to the question “Do you consider yourself wealthy?” The majority of investors surveyed with $5 million or more in investable assets consider themselves wealthy, but perhaps not in the overwhelming numbers you might imagine: just 60% answered yes to the question. In other words, 4 in 10 Americans with assets of $5 million or more think they’re not truly rich.

What would have to happen for these individuals to consider themselves rich? Well, that’s another question asked in the UBS survey. The most popular answer, selected by half of those surveyed, was “no financial constraints on activities.” The idea that you’re rich, then, seems to have a lot to do with what kinds of things you’d like to do, rather than hitting some specific asset or income number.

(MORE: Who Is Happiest at Work? Probably Not Who You Think)

Or does it? The Chicago-based Spectrem Group, which has been publishing surveys about wealth for several years, asked “What defines a rich household?” Nearly three-quarters of respondents (73%) answered “wealth level,” with just 48% choosing “lifestyle” as an indicator of whether or not one is rich.

These surveys are among the many that deal with our fascination with “being rich” and trying to define wealthy — a term whose meaning has changed over the years, and that can mean very different things depending on where one lives and works and the lifestyle of the person next door. As the Wall Street Journal’s Wealth Report blog noted when the latest wealth-survey data hit the wires in 2008, people tend to look at individuals doing twice as well financially as they are as rich. “Those with $100,000 in incomes say $200,000, while those worth $5 million say $10 million,” the story explained.

One’s age — and peer group — has a lot to do with one’s perspective on wealth. In the Spectrem Group’s 2013 survey, 45% of Gen X and Gen Y investors (basically, those 40 and under) said a person needed a net worth of at least $1 million to be rich. Among investors ages 60 and older, however, only 22% said someone with $1 million was rich.

During the Occupy Wall Street demonstrations, those in the demonized top 1% income bracket were pointed at as undeniably rich. This elite 1% included anyone earning $343,927 or more in 2009, according to IRS data.

(MORE: The Happiness of Pursuit)

Yet everything’s relative, and the terms rich and wealthy can be applied in very different ways depending on the circumstances. Personal-finance writer Liz Weston noted that pulling in the median household income in the U.S. (around $52,000) would put you in the top 1% of earners worldwide. In a story published late last year, researchers for the Wall Street Journal quantified the concept that where you live in the U.S. has a lot to with where you land in the income hierarchy, and how rich (or not) you feel:

A prince of income in Danville, Va., is a relative pauper in New York City. In Danville, the threshold for the top 1% of earners kicked in at $179,000, while it took $588,000 to reach the top 1% in New York City and northern New Jersey.

During the debates about the fiscal cliff a few months back, the subject of who is truly wealthy — and who should be taxed as if they’re truly wealthy — came up again and again. Roberton Williams, a senior fellow at the Tax Policy Center, gave CNN Money probably as good an explanation of “rich” as there is — vague and variable as the statement is.

“Who’s rich? It’s a good question,” Williams said. “Rich depends on where you live and with whom you are comparing yourself.”

An earlier version of this article misstated the name of a research firm. It is Spectrem Group, not Spectrum.

64 comments
marvinlee
marvinlee

I am certainly rich, and for these reasons:  Good health, great wife, and good climate (the American NW).  Other wealth factors include being an American citizen, being happy, and having interest in things and thoughts outside my own narrow self.  Almost anyone can be rich if they realize what constitutes real wealth.

PedroVanPeter
PedroVanPeter

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cream
cream

Being rich only gives you more financial independence, security, and options than someone with less money.  I'm a self-made millionaire who worked, saved, invested, and lived below my means to reach this level.  I also didn't buy into the so-called American Dream that makes the average American a consumer slave.  Anyone can become rich but it takes sacrifice and disciplined saving over time.      

BeRich
BeRich

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MauriceAdelmon
MauriceAdelmon

to live in luxury for a lifetime you need about 30 to 50 million USD. I calculated it. at 5 you're comfortable. 

John
John

Some people in our family live like they really are rich.  I know for a fact that they are struggling to maintain that image.  We, on the other hand, live like we might be struggling a little, but our savings far outstrip theirs, because we don't try to look like we are rich.  Our cars are old when we trade them, and we buy new furniture only once in a blue moon. We live comfortably, but we watch the checkbook balance carefully, but don't touch the savings we painfully accumulated over the years by taking our lunches to work and eating thousands of baloney sandwiches and skimping in other ways.

What I'm trying to say is that appearances can be deceptive.  The people you perceive as rich may be just keeping their head above water.

queenofromania
queenofromania

The rich man is happy with what he has. If you desire more than you have, you are not wealthy.


paulgeorges
paulgeorges

For me the definition of wealth : I don’t work for my money. It works for me.

George286
George286

Here is the real problem, the net worth of who owns America, which has gotten much worse since Reagan and his low maximum income tax brackets.
The top 1% own 34.5% of America
Next 2-4% 27.3%
The top 5%, perhaps a couple percent of the population, owns 62% of all the wealth in America.
Top 1-10% owns owns 73%.
The bottom 60% own about 2% of the net wealth, 240 million people.
Nothing wrong with being wealthy but these numbers are not good for America or Americans unless plantation America is your  idea tomorrow. 
Source: https://en.wikipedia.org/wiki/Wealth_in_the_United_States
Gives tax cuts to businesses that create jobs, not fat cats and they are not the same group. Tax the rich.

CB
CB

It might be hard to define rich, but that doesn't mean it's hard to define poor. You are poor if you cannot provide for the basic needs of your family, food, shelter, health and education, plenty of people in the westernised countries are poor by this definition and we should be ashamed of this face as we could easily rectify the situation despite loud voices to the contrary.

George286
George286

The first thing the author and the UBS study needs to recognize is that no one is talking about the top 1% of income earners, (which in every other study I've seen is more like $500K per year).  That is the salary of top doctors and lawyers, big deal.  The 1% in question are the WEALTHIEST 1%, net worth, who derive most of their from income investments and have a minimum of about $15-$20 million dollars in assets.  Only about half of the top 1% of earners are also among the top 1% in the net worth category.
Here is the stunner: this 1%, a couple hundred thousand people, own about 34% of everything in the USA.

WilfTarquin
WilfTarquin

Wealth is realtive, not absolute. They compare their wealth to the perceived wealth of their friends and coworkers, and see that they're pretty average.

It's the flipside of the income inequality (google that term and watch the TED talks, very interesting stuff) argument, that compressed income space actually leads to everyone considering themselves well off.

lurch
lurch

I never really cared about being extremely wealthy. Would be nice if unexpected bill come up (car or home repairs, doctor, dentist etc), to never have to worry about rent, utilities or being able to feed the family. I think I would feel wealthy enough then.

danielcmalloy
danielcmalloy

“Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal.But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal.For where your treasure is, there your heart will be also.


JESUS

tfdrumm
tfdrumm

"Wealthy" means having control over one's own time.  Money is sometimes a factor in this, but not necessarily.

tfdrumm
tfdrumm

"Wealthy" means having control over your own time.

RunningWriting
RunningWriting

Someone with $500,000 or $1 million in assets is definitely well-off. But I'd hardly call them wealthy. Even those people are one disaster away from financial ruin, often because of a serious medical illness/accident combined with unemployment. If the breadwinner gets cancer or another debilitating condition and can no longer work, the family will learn pretty quickly that $1 million doesn't last that long.

Or an investment could go very bad and wipe out the finances of the family. This happened to many people during the financial meltdown of 2007-2008.

I wouldn't feel truly comfortable unless I had $10-20 million, at least. (FYI: I don't have $10 million myself.) I've read about many upper middle-class people struggling after a serious setback. You certainly can't retire on $1 million in assets.

ruhling7
ruhling7

Ron Blue, a CPA SPECIALIZING in MILLIONAIRES, told a group of Christian businessmen that his clients all wanted to know how much more they needed to be secure! Bill Gothard (IBLP) speaker says TRUE SECURITY is basing one's life on things that are eternal and cannot be taken from you. Health is one dimension of it and except for good food, it doesn't cost money. http://ChooseABetterDestiny.com

RogerMKE
RogerMKE

People need to realize is that once your basic needs are covered, wealth is a relative thing.  People tend to feel poor if those around them have more than they do.

A middle class family in America may not feel wealthy, but the reality is that they live far better lives than even the wealthiest of people ever did throughout most of human history.  We have heat, air conditioning and electric lights.  Plumbing means we don't have to use bed pans in the middle of the night.  Half our children don't die before age 5.  We have longer lifespans, and treatments for common ailments like cavities and broken bones.  We don't have marauding bands of barbarians burning our villages to the ground every few years.  We have television, the Internet, smart phones, and GPS systems in our cars.  We can fly somewhere for a vacation in hours, rather than than spending weeks on a ship or riding a horse.

So yes, maybe your neighbor has a BMW and vacations in Europe every year while you drive your pickup truck to the campground, but just be happy that you are middle class in 2013 and not wealthy in the year 1500.

RichardSlinniare
RichardSlinniare

The difference between wealthy and lower middle class workers is that lower middle class workers aren't scheming ways to keep wages lower than wealthy people.

Both Democrat & Republican politicians have failed the working class by rescinding or amending employee labor laws which allows BIG Businesses to greatly benefit from reduced employee protection due the working class for medical, sick, vacation, holidays and wage benefits. Why can Big Businesses eliminate a department by reclassifying it with a new department/job title and then force an already member of their company to reapply for the same job with a falsely claimed lay off, this is WRONG. Politicians from both parties can enact a law to protect employees from this unjustified lay off. Shame on both political parties for allowing BIG Businesses to reduce wages in this manner. The term lay off should only apply if the job NO longer exists and not by reclassification of a department or job title.

Hence, the false lay off practice should have politicians up in arms enacting new employer labor laws making it a CRIME and ILLEGAL to falsely eliminate a job or department title and offer a reclassified job as the same job, even if they add one or several new job requirements, the job is overall the same. Our Government sorely needs a new federal labor law enacted to PROTECT long term employees from this deceptive lay off practices by unscrupulous employers. In addition to this new labor law... Employers can not require employee(s) to reapply for the 'same work' reclassified job or re-titled department, since they are already an employee of said company. Companies must offer them the new job without lay offs or lost scaled wages earned by a senior employee. There is something seriously wrong with our politicians... politicians who side with unscrupulous big businesses that practice laying off their employees falsely without just cause. Politicians have become as corrupt as their unscrupulous business friends, who have perfected this deceptive wage reduction loop hole against NON-UNION employees.

Yet, state & town politicians CAN NOT themselves reclassify Police & Fire department/job titles and lay off their employees only later to inform them they have to reapply for the same jobs under a new department/job titles. There is no equal JUSTICE from our political system to penalize employers, because a fair employee labor law would penalize (themselves) state & town governments. Just ask Detroit's politicians were all the money went. Tax rates continue to go higher for the lower middle & poor workers. Meanwhile, BIG Businesses have perfected their loop hole wage reduction method. Shame on ALL corruptible politicians who have allowed BIG Business to conduct themselves in this shameful wage reduction method.

Padmore
Padmore

From a British perspective, I would argue that your lifestyle choices affect your class, whilst you wealth is simply how rich you are. So you could be hugely wealthy but still count as working class (working class does not just mean you work), whilst you could be very poor and still be upper class. 

BodinWilliams
BodinWilliams

You forget to talk about the relation between one's income and his expense. I really believe that no matter how much somebody earns but he still has high expense, he doesn't consider himself rich inevitably. 

paulgeorges
paulgeorges

 .Myself I used to be in third countries and I never considered myself not wealthy in such situation !  But for someone in our western world who 's wealthy we are the third world !And  to SAY the contrary is a lie, perhaps to cheat taxes and let the burden on others ,or an hypocrisy. Someone poor knows he is poor and very often because of  selfishness of the former. What's the main reason the world is upside down now.Big firms full of cash and middle class broken and sometime living in cars if lucky to have one . What a wonderfull world !

jhoughton1
jhoughton1

Nonsense.  A poll can get anyone to say anything.  We have enough money to live well on the interest and dividends.  Baby, that's wealthy by any real measure.  People who have five million bucks and feel poor have got their heads in a very dark and smelly place.

DaleRuff
DaleRuff

Here is my 2 cents worth:  being rich isn't about a certain amount of money but rather defines a condition in which you have enough to hire other people to do what you want done but don't want to do. In other words, you are rich when you  have enough that  you don't have to work because you can afford to hire others to work for you.


By this definition, a man with 100K might be struggling in NYC but  could live in royal luxury in some poor 3d world nation.  In other words, wealth is power: the power to get others to do what you yourself do not care to do  Being rich defines not a level of financial accumulation but rather the ability to impose your will on others.  Being rich means you are at the top of the hierarchy....a king.


The trouble is, we pretend to be a democracy based on equality. None rich, none poor.  

Being wealthy is a form of freedom from toil, owing to your ability to pay or persuade others to do your bidding.


Being rich is a relationship in which others are subservient.  Likewise, poverty is a total lack of power to make others do what you want.  Each crime is a mini-revolution in which the powerless poor person revolts, without being able to universalize the felt injustice (of being poor, of being powerless, of lacking hope or opportunity, education or privilete) of inequality which would consolidate into a mass movement of opposition to the status quo.

chuckspires_com
chuckspires_com

I know some people worth a million on paper and sweat every night they go to bed. I know people worth a million on paper and they are doing quite well. I know people who are worth $50.000 on paper and also sweat every night. I know people who are worth $25.000 and they sleep very good every night. 


The thing is. Are you doing the best you can and using the money wisely. Most people whom lose their backside and live day to day or paycheck for paycheck have mostly made bad money decisions. This means. How old were you when you got married? How old were you when you had children? Do you know what you are doing right now when you get your next day off? When did you start working? Are you content with your day today? A lot of people have no clue what these questions do with anything. And those people will never get it. But those people who think about this enough will see that the choices you make right now will affect your tomorrow. 


Will that right job or promotion make you rich. NO! You make you rich.

cjohnson
cjohnson

another "poor little rich people" apologia for the wealthy who aren't quite as rich as maybe they would like.

JonGibson
JonGibson

You're = You are

Your = Belongs to you

They're = They are

Their = Belongs to them

There = A place

We're = We are

Were = Past tense of 'are'

Where = A place

Then = A point in time

Than = A method of comparison


just saying....

AFPilot
AFPilot

Rich is when money works for you and you do not work for money. Some can live well on the interest of 1 million dollars, others can't.

KevinMowery
KevinMowery

"No financial restraints on activities" = infinite money.  That's kind of an unrealistic goal for "wealthy."

WilfTarquin
WilfTarquin

@danielcmalloy Really? I was under the impression he said that income tax is evil, and that it's OK to kill unarmed people (but not foetuses) to protect your property.

jhoughton1
jhoughton1

@DaleRuff A man with 100k in New York is not "struggling."  He might wish he had more, he might have to economize a little, his kids might not get the latest iPhone the day it comes out...but he doesn't know what "struggling" is.

racerkoi
racerkoi

@chuckspires_com I knew it was those damned poor people's own fault...the crash of 2008 had nothing to do with it.

traderjim7
traderjim7

@JonGibson  Very good!  Now you should e-mail that to all the "journalists" at the Huffington Post, and all the young college graduates, particularly the English majors. 

racerkoi
racerkoi

@JonGibson Rich people can afford to keep a personal spell-checker on retainer...

DaleRuff
DaleRuff

@jhoughton1 @DaleRuff 

The average rent in Manhattan is more than $3400 a month, or 40K a year.

If you make 100K and comes home with 75K, after rent, you have 35K.  Your son wants to go to a private college, which will cost 35 (tuition and living) a year.....you can't do it; you feel you don't have enough, you need more, you are struggling,and your other son will be ready for college in 2 years.  You worry.  


In Costa Rica, with 100K, you could live in a mansion with cook, gardener, and masseur, a pool, and healthcare from the CR state program for $100 a month.



jhoughton1
jhoughton1

@racerkoi @AFPilot That's a good saying, but I'd correct it.  Rich is when you're paid way more than makes any sense, like a movie star or a baseball player -- still working but ridiculous money.  Wealth is when money works for you. 

DaleRuff
DaleRuff

You support yourself like a king in Costa Rica by renting out your 3 apartments in Manhattan.  Or, perhaps you have an internet buisiness...your critique, sir, is nitpicky and sloppy.

DaleRuff
DaleRuff

@jhoughton1 @DaleRuff  

I said "might be struggling....in Manhattan."  You changed the local or mentioned downsizing.....I find your critique sloppy.

jhoughton1
jhoughton1

@DaleRuff Your post doesn't address mine.  But that's okay.  "Average" in NYC includes rents of 30-40k.  You can rent for less than 3.4k or live in Brooklyn.  And maybe your kid doesn't go to a private college.  I still think calling that "struggle" is putting it way out of perspective.  Also, you fail to mention how the person living in Costa Rica is supposed to be earning that 100k.  In all, sir, a sloppy post.

DarrenTomlyn
DarrenTomlyn

@jhoughton1 @racerkoi @JonGibson  

Nope, racerkoi is right, it's just a matter of spelling - getting the representation right for the information you want to communicate.

Basic slang (shortened language), such as "you are = you're" only affects the representation (spelling/pronunciation) and nothing else.  Since this is a purely written article, diction/pronunciation is not part of the problem.  Syntax and grammar is also not part of the problem, because how the language is (representations are) used is also unchanged.

(Note: The recognition of the difference between content (the combination of information and representations (words)), and grammar, (how such representations are used, because of the information they represent), is not fully recognised and understood at this time!)