We hear a lot about the rich getting richer and the wealthy getting wealthier in America, but what defines "rich" or "wealthy?" Charles Schwab's annual Modern Wealth Survey attempts to do this every year, and this year it found the average American believes "wealthy" means a net worth of about $2.2 million. That's significantly higher than the average American household net worth of $1.06 million.
Even though the average American net worth is now over a million dollars, that number is a bit misleading. "When you look at the median, which is the middle point of household net worth in the U.S., it's about $192,000," says Bill Dendy, financial expert with Raymond James. "But it also has a lot to do with your age, which means all of this is very subjective."
Subjective is the operative word when it comes to wealth. Surveys in recent years have shown that up to one-third of people defined as "rich" still live paycheck-to-paycheck. "There are those who are getting by with a whole lot less than average who are quite content, and there are those who have a lot more than average who will never be content," says Dendy. "Regardless of the number of dollars you have, the question is are you able to maximize your enjoyment of those dollars?"
For many Americans, maximizing your dollars can mean cutting debt or improving your investments, rather than chasing more income. "A lot of this has to do with aligning our values with our dollars," says Dendy. "That means making sure we're getting maximum enjoyment out of the dollars we spend, and putting us in position where we don't stress over the dollars."
Regardless of surveys and salaries, Dendy believes wealth ultimately is in the eye of the beholder. "From the Buddhist monk who says I'm rich beyond belief but has nothing, to the person with a ton of money who says I can't get enough, greed is good---you have that full spectrum and everything in between."
Photo: EyeEm