Chat with us, powered by LiveChat

Financial Confidence Reaches A New Low As Only 12% of Americans Consider Themselves Wealthy

John Galt

Updated: December 15, 2022

financial confidence low
Editor’s Note:

EDITOR'S NOTE: A Crisis of Financial Confidence: According to a recent CNBC report, 88% of American adults feel financially less than adequate. And if you thought the millionaire class was somehow immune to this inflationary wealth plunge, you’re wrong, as 71% of the rich feel they have less-than-adequate wealth. Now, wealth can be defined in many ways, and not all can be quantified into dollar amounts (take the freedom to choose work time, workload, work environment, or simply, time away from work, time with family, etc.). But if one thing is certain, it’s that inflation is exerting a strong psychological effect on Americans; in addition to the monetary drain, we’re seeing a significant strain on morale. So, what would it take for these Americans to feel wealthy? Interestingly, their answers are just as confused and misguided. Read the article and decide for yourself if you share this opinion.

KEY POINTS
  • Inflation, geopolitical uncertainty and fears of a recession have undermined financial confidence across the board, according to a new report by Edelman Financial Engines.
  • Only 12% of Americans consider themselves wealthy, including just 29% of millionaires

Inflation, geopolitical uncertainty and fears of a recession have undermined financial confidence across the board, according to a new report by Edelman Financial Engines.

Less than one-quarter, or 23%, of more than 2,000 adults polled earlier this fall said they felt “very comfortable” about their finances. Fewer — just 12% — consider themselves wealthy, the report said.

Even with their high net worth, less than half of all millionaires, or 44%, felt “very comfortable” about their finances and fewer than one-third, or 29%, felt wealthy, the report also found.

More from Personal Finance:
35% of millionaires say they won’t have enough to retire
Congress may make it easier to save for emergencies
Inflation boosts U.S. household spending by $433 a month

“Becoming a millionaire was always the pinnacle of financial success,” said Jason Van de Loo, head of wealth planning and marketing at Edelman Financial Engines.

But at a time when inflation and stress levels are up, and markets and portfolios are down, “very few Americans actually feel wealthy.”

‘What would it take to feel wealthy?’

These days, fewer Americans, including millionaires, feel confident about their financial standing.

According to a separate report by Bank of America, 71% of workers feel their pay isn’t keeping up with the rising cost of living, bringing the number of people who feel financially secure to a five-year low.

Most adults said they feel less financially secure than they hoped to be at this stage in their life, Edelman Financial Engines also found.

What would it take to feel wealthy? The short answer is more.
Jason Van de Loo
HEAD OF WEALTH PLANNING AND MARKETING AT EDELMAN FINANCIAL ENGINES

To feel wealthy, most people said they would need $1 million in the bank, although high net worth individuals put the bar much higher: More than half said they would need more than $3 million, and one-third said it would take over $5 million.

“What would it take to feel wealthy?” Van de Loo said. “The short answer is more.”

Americans feel the sting of inflation

Regardless of how much money they have, Americans across the board are cutting back or making trade-offs due to inflation and higher prices, including buying fewer things, spending less on food and entertainment, and saving less for retirement or other long-term goals.

Already, credit card balances are up 15% in the most recent quarter, the largest annual jump in more than 20 years.

At the same time, the personal savings rate fell to 2.3% in October, a 17-year low.

“People are probably getting a lesson on frugality this year,” said Dave Goodsell, executive director of the Natixis Center for Investor Insight.

Originally published on CNBC.

No Investment Advice

GSI Exchange is a publisher and precious metals retailer. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Content on the Site is provided for information purposes only, and none of the information contained on the Site constitutes an offer, solicitation or recommendation to buy or sell a security. You understand that the GSI Exchange receives neither monetary or securities compensation for our services. GSI stands to benefit from the sell of retail cost precious metals on this site. To avoid hidden costs all prices are listed live 24/7 on this site. Read the full disclaimer

GSI Exchange Infokit - evergreen

GET YOUR FREE

GOLD SILVER INFO KIT

Precious Metals and Currency Data Powered by nFusion Solutions