Four Out of Ten Millionaires Do Not Feel Wealthy
Four out of ten millionaires say they don't feel rich.
March 14, 2011— -- The nation's millionaires have spoken, and the magic number above which they feel wealthy is $7.5 million. Four out of 10 millionaires surveyed say they do not feel wealthy, even though they reported an average of $3.5 million in investable assets.
Among the 58 percent of responders who do feel wealthy, they said they began to feel so at $1.75 million in investable assets.
Gail Graham, an executive vice president in Fidelity Institutional Wealth, the group that conducted the survey, said the she believes different definitions of "wealthy" are can be attributed "how much retirement influences how people feel."
The average responder was 56 years old, closing in on retirement age. The responders' definitions of wealth are based "where you are in your life cycle compared to retirement, and what you believe your spending patterns will be in retirement," Graham said. For a 30-year-old, $1.75 million seems wealthy compared to peers' wealth. But for those closer to retirement, their relative view of their wealth changes.
Three quarters of millionaires feel financially secure, but 81 percent of participants say they are careful about their spending. One of the most pressing financial concerns shared by 43 percent of millionaires is being able to support their lifestyles in retirement.
The fourth annual Fidellity Millionaire Outlook results indicate America's richest were unshaken by the market's downturn, and are not concerned about current market volatility. Forty-three percent of those surveyed say they plan to invest more in the stock market over the next 12 months. One third of all millionaires say they made back all of the money they lost in the market from the fall of 2008 through the first half of 2009.
While their near-term confidence in the U.S. economy remains negative, their outlook is at the highest level since Fidelity began tracking millionaires' views in 2006.
Their optimism is based on a belief that both business spending and consumer spending will increase this year, and with the exception of the stock market, the 2011 future outlook figures exceeded last year's survey.
Graham said the attitudes of millionaires are both a "leading indicator and a causal factor" of the direction of the economy. Representing 56 percent of the nation's wealth, she said the millionaires "have the power to make what they believe happen."
Their responses "help us understand the present situation, and their outlook, we believe, does affect the reality that comes," said Graham, who has been involved with the survey since it began. Past years' results reflect that trend, she said. "In 2006, responders were worried about the future," she said. "In 2008, they were more optimistic, and that certainly came to pass in 2009."
The millionaires surveyed are "inherently optimistic people," Graham said -- 81 percent are self-made -- but they are "not unrealistic about things that aren't working well." The responders still have a negative view about real estate, but they indicated increased confidence in their outlook from the previous survey.
The survey of 1,011 financial decision makers in U.S. households with investable assets of at least $1 million, excluding any real estate holdings and workplace retirement accounts, was conducted online Oct. 18-29, 2010.
Average Millionaire Surveyed is 56 with Annual Household Income of $379 Thousand
The average millionaire who participated in the survey is 56 years old, male, and has $3.5 million in investable assets with an annual household income of $379 thousand. The majority -- 86 percent -- have college degrees, and 46 percent hold graduate degrees.
Those surveyed represent only 5 percent of U.S. households. Sixty percent of participants were male, while 40 percent were female.
The majority of millionaires surveyed -- 64 percent -- are either "extremely or very concerned" about the impact of potential tax changes on their investments.
Participants in the survey asked to rate their outlook on a variety of topics, including financial concerns and the economy, on a scale where +100 represented the most favorable outlook, zero a neutral outlook, and -100 the most negative outlook. As a group they rated the economy at -54 -- very weak, but far better than the -91 they averaged less than two years ago.
By the fourth quarter of 2011, they said they expected a big upturn -- to a +37 on the survey's scale.