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How much money do you need to be considered "Wealthy"?

| June 18, 2018
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Survey reveals becoming wealthy is more achievable with a financial plan

When asked to assign a specific dollar amount, respondents to a recent survey singled out $2.4 million as how much money you need to be considered wealthy. That’s nearly 30 times the average net worth of American households, according to the U.S. Census Bureau, making that an unrealistic achievement for many. However, the majority of those surveyed defined personal wealth as living stress-free and having peace of mind. When you consider personal wealth in terms of quality of life rather than dollar amounts, figuring out how to become wealthy  is an achievable goal even if you are in a more modest income bracket.

What do you consider “wealth”?

Charles Schwab’s 2018 Modern Wealth Index  surveyed 1,000 Americans between the ages of 21 to 75 on the concept of wealth.  28% listed peace of mind/ stress-free living, and 17% lauded “loving relationships with family and friends,” as the true definition of wealth. Less than a third of the survey’s respondents defined wealth specifically in terms of money. 18% cited “being able to afford anything I want” as being wealthy and 11% defined wealth as having “lots of money”.

How different age groups perceive wealth

Not surprisingly, the perceived amount of what you need to be considered wealthy varies according to your age. The average amount rose by $700,000 as respondents grew older. Millennials consider someone with $2 million to be wealthy, Gen X’ers cited a figure of $2.6 million, and Boomers regarded $2.7 million as the necessary net worth. Millennials are more optimistic about their finances, with 64% of respondents in their 20s and 30s believing that they will have enough money to be considered wealthy in their lifetimes. Just 22% of Boomers believe they will achieve that milestone.

Best personal finance advice for becoming wealthy: write a financial plan
So, what’s the best personal finance adviceif you want to become wealthy? Experts agree that whether you have a little to save or a lot, having a written financial plan is the best way to reach your financial goals. The Schwab survey results illuminate the value of this advice: three out of four of the top 10% of financial performers said they had a written financial plan.

 

Unfortunately, only 24% of Americans have a written financial plan. The reason that 45% of people give for not have a written financial plan is that they don’t believe they are wealthy enough to need a plan. That’s a classic case of backward thinking – having a written financial plan will enable you to save more money and become wealthier.

Why written financial plans hold the keys to becoming wealthy

Having a written financial plan is helpful in several ways. People with written financial plans tend to be more disciplined financially. They are more likely to be engaged with their wealth, and most importantly, people with written financial plans tend to demonstrate better saving and investing behaviors. While all these factors will help you save more money, written financial plans hold the keys to becoming wealthyin another way: they give you greater confidence in reaching your financial goals, relieving stress and increasing peace of mind.

If you would like help developing a financial plan, consider reaching out to skilled financial planner Matt Logan. We can take a look at your current financial behaviors and create a savings plan to help you reach your long and short term financial goals and enjoy greater wealth in the future.

Learn more about financial and other economic-related topics at www.MattLoganInc.com Matt Logan is a Representative with Matt Logan Inc. and Summit Brokerage and may be reached at http://www.mattloganinc.com/, 336-540-9700 or [email protected].  

Matt Logan Inc. is an independent firm with Securities offered through Summit Brokerage Services, Inc., Member FINRASIPC. Advisory services offered through Summit Financial Group Inc., a Registered Investment Advisor. Summit Brokerage Services, Inc., its affiliates and Matt Logan Inc. do not give tax or legal advice. You should consult an experienced professional regarding the tax consequences of a specific transaction. These are the views of Matt Logan Inc., and not necessarily those of Summit Brokerage Services, Inc. and any of its affiliates and should not be construed as investment advice.

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