Study Finds Only 28 Percent of Millionaires Think They're Rich

July 28, 2013— -- If you had investments worth a million dollars, would you consider yourself rich? How about $5 million? Well, hold on to your wallet because a new study has found that the majority of millionaires don't consider themselves rich.

According to a study from investment bank UBS, entitled "What is Wealthy?," 40 percent of those with $5 million in investable assets said they didn't feel they were rich. And only 28 percent of investors who had between $1 and $5 million in investable assets viewed themselves as rich.

"To us, the surprise was that that many people with $1 million or more did not consider themselves wealthy," said Emily Pachuta, head of investor insights at UBS Wealth Management Americas. "We think it shows a very interesting mindset shift. People have certainly experienced a shock from the volatility of the market, and they are very aware that it takes a significant amount of money to have that dual feeling of having enough money and no financial constraints."

According to the opt-in, online survey of 4,450 Americans ages 25 plus with a minimum of at least $250,000 in investable assets (half with at least $1 million in investable assets), 50 percent of investors define wealth as "having no financial constraints on what they do." However, although the $5 million-plus investors are twice as likely to feel wealthy as investors with $1 million to $5 million in assets, only 64 percent of the former and 62 percent of the latter felt confident that they would achieve their goals.

If this outlook seems a little odd—especially when you consider that the median household income for May 2013 was $51,500 and the average 401(k) account has about $80,000—experts are not especially surprised.

"It's shocking to those of us who are not personally in that range, but it's not surprising when you take into the account the costs and expenses that are associated with people at that level of wealth," said Cliff Goldstein, a personal finance associate at Nerd Wallet, a cost comparison website.

Indeed, of those who have adult children, 80 percent said they are providing financial support for adult children, grandchildren or aging parents. "Unemployment, the economy and aging parents cause concern about the financial situation," he said.

David Cay Johnston, the Pulitzer Prize-winning author of books including The Fine Print and Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich—and Cheat Everybody Else, said he wasn't surprised by the Poor-Me-Millionaires.

For starters, research has shown that many rich people are afraid they will lose it all. Secondly, wealth is relative, especially in a world that is trying to keep up with the Jones's (whoever they are).

"In New York City, being wealthy enough to own upright a property worth $5 million doesn't make you feel rich, because you're surrounded by people who can buy and sell you in a two hours income," he told ABC News. "There are always some people around you who have more. Also, having $5 million in Keokuk, Iowa, is a lot different than having $5 million in New York or Silicon Valley or Seattle."

What's more, he says, most people don't understand money. "Handling assets and understanding what they are is a skill very few people have," he said. "To most people money is a stream and not a pool of assets."

One thing that does make investors feel confident is holding a significant amount of cash. According to UBS, despite significant market gains over the past year, investors keep an average of around 20 percent of their assets in cash, as they have for the past three years. Sixty-four percent feel they have the right amount of cash, and 56 percent expect to keep the same level of cash for the next 12 months.

Wealthy investors' two top personal finance concerns are long-term care and the finances of their children and grandchildren. While most feel highly prepared in their retirement planning (62 percent), 36 percent said they were not prepared at all.

"These people have a lot of money," said Goldstein. "But the reason they don't feel wealthy is because they don't feel like they have a comprehensive financial plan in place to take care of all of these longer-term costs."