Yahoo Finance 5 Indicators of the True Definition of ‘Wealthy’ in 2023
In 2023, what does wealth mean anyway? With stubborn inflation and rising costs, it seems that you need a ton of money to be considered wealthy.
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USA Today indicated that in different ways, the average American family feels both wealthier and poorer as compared to a few years ago.
U.S. Family Wealth in 2023
USA Today also reported that from 2019 to 2022, the median net worth of U.S. families surged a stunning 37% to $192,900, adjusted for inflation — the largest rise in the history of the Fed’s Survey of Consumer Finances, which is conducted every three years. Median income, meanwhile, grew a relatively modest 3%, and debt was fairly stable.
At the same time, inflation has hit a 40-year high as of 2023, with record-setting federal interest rate hikes unlike anything seen in decades. As a result, the cost of everything has increased — and it takes significantly more money to buy the same things compared with 2-3 years ago, changing the definition of wealth.
Below are five key figures pertaining to U.S. wealth, according to recent reporting.
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The 5 Key Wealth Figures
$2.6 million: This is the net worth of the median American family in the upper 10% of income bands, which is a range that most people deem wealthy. Between 2019 and 2022, household wealth increased significantly for several reasons. These include a series of government stimulus checks sent to eligible Americans, people being stuck in lockdown at home (which led to less spending) and an overall increase in saving rates, home values and the stock market.
$483,000: This is the figure Americans believe they would need to earn in one year to be rich. This number is more than six times the $75,203 average salary earned by full-time workers in 2021. While this figure seems excessive, Americans are feeling financially insecure on the whole and the U.S. dollar has been greatly devalued since the onset of the COVID-19 pandemic.
$2.2 million: This is the overall net worth an American needs to be considered wealthy, per a Charles Schwab survey. While this same figure was reported to be $2.6 million back in 2020, the feeling among those who were polled more recently is different. Sometimes, people’s perceptions of wealth are founded on emotion, detached from prevailing economic indicators. It’s becoming more and more difficult to achieve a high net worth thanks to inflation and rising interest rates, which may be a factor.
$560,000: This figure is the average net worth of Americans who actually feel wealthy in 2023. Interestingly enough, this is about four times less than the $2.2 million figure quoted above. However, “feeling” wealthy can certainly be different than actually “being” wealthy. When determining wealth, it’s important to take into account your debt-to-income ratio, the value of your liquid and illiquid assets, etc. Many even consider their health and well-being, quality of life, and time spent with family and friends as part of their overall wealth.
$1 million: It’s no surprise that this figure is still the gold standard when it comes to the age-old benchmark of American wealth.
“There’s no question that $1 million is a magic number,” said Matt Schulz, chief credit analyst at LendingTree, as quoted by USA Today.
“It doesn’t mean your life is easy or that you’re Jeff Bezos or Bill Gates, but it does mean that you have a level of wealth that most people can only dream of attaining.”
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This article originally appeared on GOBankingRates.com: 5 Indicators of the True Definition of ‘Wealthy’ in 2023
