How much do you need in order to be considered wealthy? I’m sure people will answer that question differently. Some might base it off the income you have, the stuff you have, the investments you have or a combination of these and other things. Phoenix Marketing International published their annual Wealth & Affluent Monitor to help answer this very question.
They looked at investible assets which are stock, bonds, mutual funds, bank accounts, cash, etcetera. The amount that you need in order to be considered wealthy was not very high, only $100,000. Another key figure was that 70% of the population holds just 9% of the investible assets in this country. These results make sense to me, Americans are great at collecting stuff, homes, cars, boats, but not that great at saving and investing.
The group that had over $100,000 of investible assets but no more than 1 million, makes up 25% of the population and they hold 32% of the countries investible assets. What it typically considered the milestone for wealth in this country, having more than 1 million, makes up the other 5% of population but hold 59% of the investible assets in this country.
The reason I bring this study up is because it highlights a greater issue in our culture. When we say someone is wealthy it is usually because their net worth, not their investible assets, is over 1 million. Net worth however includes everyone’s stuff. When you strip out all of the stuff we have, Americans are relativity poor compared to what we could be. It is a cultural issue of over consumption. It is something that has plagued our society for several generations and it shows no sign of slowing.
In all honesty, $100,000 isn’t that much money. In most big cities that amount can’t even buy you a house. Yet the vast majority of Americans has failed to save even that small amount. It is another example that shows our desperate need for to develop savers and not spenders. The one thing missing from this study that would have been interesting to know is how much of the population has a negative investible asset base. I’m sure with debt nearing record highs, that number would be surprisingly high.