Feeling “wealthy” is becoming as difficult it’s to truly get wealthy, in accordance with a recent survey of Americans with not less than $1 million in investable assets.
Of the greater than 3,000 millionaires surveyed, just 8% — or roughly 240 — said they considered themselves wealthy, in accordance with data released this week by Ameriprise Financial, which noted that many high-earners are focused on “protecting accrued wealth.”
Amongst those millionaires, 31% put themselves in the center class and roughly 60% of respondents said they’re among the many upper middle class, per the info that was earlier reported on by CNBC.
The remaining 1% of the one-percenters actually said they were poor or very poor.
Though the sum can vary amongst states, the common annual earnings of the highest 1% of American taxpayers is roughly $652,657 — capping out at $952,902 for taxpayers in Connecticut, which boasts the best top-1% threshold, in accordance with financial advisory SmartAsset.
Thus, while having a seven-figure checking account does seemingly put a person earner within the “wealthy” category, there’s a number of economic headwinds that would make even the best of earners feel squeezed.
Except for Fed Reserve’s rates of interest currently sitting at a variety not seen since 2001 — between 5.25% and 5.5% — the housing market has also been stricken by sky-high borrowing costs which have only begun to fall from their 8% peak this week.
As of Friday, the common rate on the benchmark 30-year home loan fell for the second week in a row — positive news for prospective homebuyers who just last month were getting priced out of the housing market as rates creeped as much as 8%.
The newest decline brought the common rate on a 30-year mortgage all the way down to 7.5% from 7.76% last week, in accordance with mortgage buyer Freddie Mac.
It was the biggest weekly decline since late 2022.
Nonetheless, child-care expenses, auto loans, rental housing and even groceries remain high, especially for low- and middle-income earners who’ve been especially hit hard by soaring prices despite the Federal Reserve’s attempts to tamp down stubbornly-high inflation.
Thousands and thousands of Americans are also now facing one other kind of debt after student loan payments began accruing interest again on Sept. 1, with payments due starting in October.
Federal student loan borrowers haven’t needed to make payments in over three years because of pandemic-era federal assistance.
With any savings from pandemic-era government stimulus checks dried up, many stretched borrowers have turned to opening recent lines of credit to cover day-to-day expenses, causing delinquencies to hit a 10-year high.
This yr, bank card delinquencies have hit 3.8%, while 3.6% have defaulted on their automobile loans, in accordance with credit agency Equifax.
There are 70 million more bank card accounts open now than before the pandemic in 2019 and bank card debt surpassed $1 trillion for the primary time ever this yr, per the Recent York Federal Reserve.
Thus, it’s no wonder that Ameriprise Financial’s recent report is the second time in recent months that a survey has revealed that high-earning Americans don’t feel wealthy.
A survey conducted by Bloomberg in August of 1,000 Americans making not less than $175,000 a yr — putting them in the highest 10% of US tax filers — revealed that 25% say they’re either “very poor,” “poor” or “getting by but things are tight.”
The outlet said it surveyed individuals who have good jobs — including lawyers, construction company owners, doctors and franchise bosses — and who own their homes and have savings for retirement.
Still, only 50% described themselves as “comfortable” and only 1 / 4 said they felt “wealthy” or “very wealthy.”
Some of the respondents making upwards of $5 million were amongst those that said they felt broke, in accordance with Bloomberg.
Nearly 60% of the high-earning respondents said they worry about money, and about 25% don’t think they’ll be higher off financially than their parents.