An examination of how Americans think about saving, spending and investing finds that the nation faces a wealth paradox, driven by the contrast between how people define wealth for themselves compared to how they define it for others.
When asked to express how much money it takes to be considered “wealthy,” respondents to Charles Schwab’s seventh annual Modern Wealth Survey say it’s an average of $2.2 million. But among the 48% of Americans who say they already feel wealthy today, the average net worth is $560,000—about a quarter of that loftier target.
What’s more, non-financial assets like health and family resonate far more when defining wealth than having large sums of money, according to the findings.
For instance, nearly two-thirds of Americans (62%) say being able to enjoy healthy relationships with their loved ones better describes wealth than having a lot of money. Moreover, 7 in 10 say wealth is more about not having to stress over money than having more of it.
In fact, when asked to characterize what it means to be wealthy in their own words, Americans mention their well-being (40%) more often than money (32%) and assets (26%).
| What wealth means to me…this or that: | |
|---|---|
| Enjoying experiences (70%) | Owning nice things (30%) |
| Not having to stress over money (70%) | Having more money than most people I know (30%) |
| Having a healthy work life balance (69%) | Maximizing my earnings (31%) |
| Being generous with loves ones now (67%) | Leaving an inheritance (33%) |
| Being in good health (63%) | Being successful (37%) |
| Enjoying healthy relationships with loved ones (62%) | Having a lot of money (38%) |
| Having the flexibility of working where and how I want (60%) | Having a higher salary (40%) |
Schwab found that these leanings are even stronger among older generations, with 8 in 10 Boomers saying wealth is more about enjoying experiences (79%) and not having financial stress (83%) than having nice things or accumulating more dollars.
“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,” says Jonathan Craig, Managing Director and Head of Investor Services at Charles Schwab.
Craig adds that they’re seeing these trends at Schwab as well. “First, when people think about managing their finances and building wealth, it’s so much more personal than just money and investments. How they invest and what they invest in reflects their unique goals and passions. Second, Americans want the ability to manage their money and investments without traditional barriers such as high minimums and fees to access financial services and help,” he says.
Social Media Distractions
Schwab’s survey also shows, however, that social media can create new uncertainty and doubts for Americans when it comes to how wealthy they feel and resurface the tendency to compare themselves to their social circles.
Nearly half (47%) say being able to afford a lifestyle comparable to their friends makes them feel wealthy, and among those who use social media, more than a third (37%) say they compare their lifestyles to what family and friends share on social media. In addition, about a third say they make purchases (34%) based on what they see on social media from friends and influencers, as well as financial decisions (33%) and investment decisions (33%).
Meanwhile, only about a third (35%) of Americans have plotted their goals and documented a financial plan, the findings further show. Among those who do, 7 in 10 say it makes them feel more in control of their finances, and 9 in 10 say they feel confident that they will reach their financial goals.
And while people feel wealthy, they apparently don’t think their wealth merits a plan: among those who don’t have 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%).
The online survey was conducted by Logica Research from March 1–13, 2023, among a national sample of 1,000 Americans aged 21 to 75. An additional 200 Generation Z Americans completed the study.
Detailed results can be found here.
