Who qualifies as rich today? The bar for being considered wealthy is shifting, as most people now believe that merely being a millionaire doesn’t cut it.

An annual survey from Charles Schwab asks Americans how much net worth it takes to be wealthy. This year, the average answer was $2.5 million, up from $2.2 million in the last two iterations of the survey.

Older generations and residents of expensive cities like San Francisco had the highest thresholds for what net worth qualified as wealthy. Generally, the survey found significant variance in answers based on age and city of residence.

“‘Wealth’ means different things to different people,” Rob Williams, managing director of financial planning at Charles Schwab, said in a release. But for many Americans, reaching “a certain dollar amount” is a key part of how they think about achieving wealth, he added.

The results of the Schwab survey suggest only a tiny portion of people are rich. If $2.5 million is what it takes to be wealthy, about 2% of Americans actually meet the criteria.

Americans are also somewhat pessimistic about their chances of becoming wealthy. About 10% say they’re wealthy now, and 21% say they’re on track to get there. “Younger Americans, including Millennials and Gen Z, are the most optimistic about being wealthy in their lifetimes (29%),” Schwab said in the release.

It takes a lot less wealth to be considered “financially comfortable,” according to the survey. The average net worth people think it takes to be comfortable is $778,000, which is actually down from a peak last year of about $1 million.

Average net worth it takes to be wealthy, by generation

Here’s how much money each generation says it takes to be wealthy:

All Americans: $2.5 million
Boomers: $2.8 million
Gen X: $2.7 million
Millennials: $2.2 million
Gen Z: $1.2 million

Average net worth it takes to be ‘wealthy’ by location

Here’s how much money residents of major cities say it takes to be wealthy:

San Francisco: $4.4 million
Southern California: $3.4 million
New York: $2.9 million
Washington, D.C.: $2.8 million
Denver: $2.8 million
Seattle: $2.8 million
Boston: $2.7 million
Atlanta: $2.4 million
Chicago: $2.3 million
Houston: $2.3 million
Phoenix: $2.3 million
Dallas: $2.2 million

More from Money:

Best Gold IRA Companies of 2024

What Is the Great Wealth Transfer? (And How Could You Benefit?)

Homeowners Are Refinancing Again as Rates Dip. Should You?

According to a recent survey conducted by Charles Schwab, the definition of wealth is changing. The survey, which is conducted annually, found that the average American now believes that being a millionaire is no longer enough to be considered wealthy. In fact, the average answer for how much net worth it takes to be wealthy has increased from $2.2 million to $2.5 million in the last two years.

The survey also revealed that older generations and residents of expensive cities like San Francisco have the highest thresholds for what net worth qualifies as wealthy. This suggests that there is significant variance in opinions on wealth based on age and location.

Rob Williams, managing director of financial planning at Charles Schwab, stated that “wealth means different things to different people.” However, for many Americans, reaching a certain dollar amount is a key factor in achieving wealth.

The results of the survey also show that only a small percentage of Americans actually meet the criteria for being considered wealthy. If $2.5 million is the benchmark, then only about 2% of Americans would qualify.

The survey also revealed that Americans are not very optimistic about their chances of becoming wealthy. Only 10% of respondents said they are currently wealthy, and 21% believe they are on track to become wealthy. Interestingly, younger generations, such as Millennials and Gen Z, are the most optimistic about their chances of becoming wealthy in their lifetimes.

The survey also looked at the amount of net worth it takes to be financially comfortable. The average answer for this was $778,000, which is significantly lower than the benchmark for being considered wealthy. This number has also decreased from last year’s peak of $1 million.

The survey also broke down the average net worth needed to be considered wealthy by generation and location. Boomers had the highest threshold at $2.8 million, while Gen Z had the lowest at $1.2 million. In terms of location, San Francisco had the highest benchmark at $4.4 million, followed by Southern California at $3.4 million.

In conclusion, the survey conducted by Charles Schwab suggests that the definition of wealth is changing, and it takes a significant amount of net worth to be considered wealthy. However, there is also a significant difference in opinions on wealth based on age and location. 

Source:Read More