Apparently, “Are you wealthy?” is a complicated question to answer.
In Spectrem’s Wealth Segmentation Series study Financial Behaviors and the Investor’s Mindset, Millionaires with a net worth between $1 million and $5 million were asked that question, and were allowed to place themselves on a scale from 0 to 100, ranging from “poor’’ to “wealthy’’.
Millionaires placed themselves at 64.72, not even two-thirds of the way on to being wealthy. Interestingly, they placed their parents’ wealth status at 45.10, and their spouse’s parents’ wealth status at 42.37. Oddly, the younger the Millionaire, the higher they rate themselves on the “wealthy’’ scale, and the same holds true for their parents and their spouse’s parents.
Ultra High Net Worth investors, those with a net worth between $5 million and $25 million, rate themeslves at 75.60 on the scale, while Mass Affluent investors, with a net worth between $100,000 and $1 million, rate themselves at 55.98
Among the Millionaires, 94 percent report having investment income from such sources as interest, dividends, trust income, capital gains and rental income. The average mean value of that income is $60,000.
Almost three-quarters report retirement income including Social Security and retirement distributions, with an average value of $78,000. Sixty-nine percent report annual income from salary and bonuses, and that mean value is $135,000.
The attitude of investors is improving as the economy improves. Sixty-five percent of Millionaire’s said their financial situation today is better than it was one year ago, while 58 percent expect their personal financial situation to improve one year from now than it is at present. Seventy-six percent of Millionaire investors under the age of 36 expect the next year to improve their situation.
However, almost 30 percent of Millionaires under the age of 36 say they worry about their debt. That percentage drops as Millionaires get older. Ten percent of corporate executive Millionaires worry about their debt situation, while only 3 percent of professionals do so.
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