What Does It Take to Feel Wealthy?

What Does It Take to Feel Wealthy?

Published: Thursday, 19 Jul 2012 | 10:49 AM ET
by: Robert Frank, CNBC Reporter & Editor
Yuri Kuzmin | iStock Vectors | Getty Images

What would you need to feel wealthy?

The question of how much people need to feel rich has been studied for ages, and just about every study comes to a similar conclusion: people need twice their current net worth or income to feel wealth.

The findings are remarkably consistent, no matter the wealth or income level. People worth $10 million say they would require at least $20 million to feel wealthy, while those with an income of $40,000 a year inevitably say they would feel wealthy with $80,000.

A new study from Fidelity is largely consistent with this Doubling Up Wealth theory. Fidelity asked more than 1,000 millionaires how much they would need to feel wealthy.

While most of the millionaires felt wealthy (probably the wealthier ones), the ones who didn’t said they would need $5 million in investible assets. The average wealth of the group was $3 million.

An earlier study from Fidelity found that millionaires needed $7.5 million to feel wealthy. So maybe millionaires are downsizing their expectations for being rich. What’s more, more millionaires this year felt they were wealthy, even though their average net worth is slightly lower.

How much would you need to feel wealthy?

The study also gave us some broader details about today’s millionaires. It found that 86 percent are self-made, as opposed to inheriting their fortunes. (Though  the term “self-made” has become controversial).

The average age of today’s millionaire is 61. So all those Silicon Valley whiz kids, celebrities and athletes are outliers. The real rich are old.

The top sources of wealth for the self-made millionaires were investments and capital appreciation; compensation and employee stock options or profit sharing. Self-made millionaires feel just as secure as the inherited rich, although inheritors were more likely to use financial advisors.

How much do you need to feel wealthy?

-By CNBC’s Robert Frank

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2 thoughts on “What Does It Take to Feel Wealthy?

  1. onedotconnect March 5, 2013 at 11:40 PM Reply

    Great post! What do you think the CEO’s of the future will look like? By say 2020 or 2030.

    • Jim March 5, 2013 at 11:47 PM Reply

      Good question. Since the Internet has leveled the playing field of business, I’m thinking ‘wealthy’ business owners may be more diverse perhaps? Perhaps spread out over gender, race, age moreso because it is easier for anyone to get into the game, barriers to entry are lower, and in general, this should continue. The opportunity will be there. We’ll see.

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