Posted on 09/09/2023 9:32:57 PM PDT by SeekAndFind
What does it take to be wealthy in America? It depends, of course, on where one lives.
According to the 2023 Modern Wealth Survey by Charles Schwab (see below), you need a net worth of at least $1.7 million to be "financially comfortable" in San Francisco, and $4.7 million to be considered "wealthy."
And in Houston? $606k is "financially comfortable," while $2.1 million is "wealthy."
As Visual Capitalist's Dorothy Neufeld notes:
Overall, the net worth that Americans say that is needed to be “wealthy” in the United States is $2.2 million in 2023.
Here are the average wealth numbers indicated by respondents across 12 major U.S. cities, based on a survey of 1,000 people between 21 and 75:
In San Francisco, respondents said they needed $4.7 million in net worth to be wealthy, the highest across all cities surveyed, and more than double the national average.
This figure dropped from last year, when it stood at $5.4 million. The vast majority of people in San Francisco say that inflation has had an impact on their finances, and over half say that living in the city impedes their ability to reach their financial goals, citing steep costs of living.
In Los Angeles and San Diego, it takes $3.5 million to be wealthy, the second-highest across cities surveyed. In New York, it takes $3.3 million in net worth to reach this target. It is home to over 345,000 millionaires, the highest worldwide.
Houston, where the cost of living is less than half of San Francisco, respondents said a net worth of $2.1 million is needed to be wealthy. The average salary is $67,000 in Houston, while in San Francisco it falls at $81,000.
Separately, the survey asked whether respondents “feel wealthy” themselves.
Overall, 48% of all respondents said they feel wealthy, and those people had an average net worth of $560,000. This is a considerable divergence from the $2.2 million benchmark they said was needed to be wealthy.
Here’s the breakdown for major cities, illustrating the paradox:
Millennials were most likely to feel wealthy, at 57% of respondents, while 40% of boomers felt wealthy, the lowest across generations surveyed.
When digging deeper, it becomes clear that wealth is not simply a number.
In fact, the survey indicates that many Americans place greater importance on non-monetary assets over monetary assets when they think of wealth.
For instance, 72% said having a fulfilling personal life was a better descriptor of wealth than working on a career, which was only chosen by 28% of respondents. Meanwhile, enjoying experiences (70%) was a better reflection of wealth compared to owning many nice things (30%).
Interestingly, there was a narrower margin in choosing between the importance of time (61%) over money (39%).
Beyond monetary figures, these findings illustrate the layers that influence what it means to feel financially healthy today, and how this affects an individual’s overall quality of life.
Interesting. I figure $1 million to retire and live comfortably. And not in overpriced Reno, either! Not sure where, but not in any of those listed cities. No way.
The measure I use is to add your expenses and a bit more, so you aren’t stuck at home all the time. Then I multiply by 25, to assume a 4% return if I were drawing the income from investments.
In my city, that would probably be about $1,2 million CAN, so you have enough income for a reasonable care and to pay your rent and buy groceries.
The only way you can be comfortable in San Francisco on $1.7 million is if you are out in the boonies, where the non-millionaires live. I cannot imagine living in San Francisco on just $1.7 million and making it.
10 mil
I must not be very bright either ...
cause I feel pretty happy and satisfied.
The lights are on ..AC too ...
Food in the house.
I got walking around money in my pocket..
Can't think of anything I would want that I couldn't go get.
Or anywhere I would want to go that I couldn't go.
Good wife.
Kids... grand kids.. neighbors ..
Plenty of projects to keep me busy.
Eternal life ...
Taxes did double over the last 2 years ... not a problem, but it is an aggravation.
Would I be better off wealthy?
The trick is to retire without debt. If house and cars have no debt, we live easily on about $5000/month. At 4% conservative ROI would need $1.5 million investment capital.
If you have no debt and own your own home, you should easily live on far less than $5K net, unless you blow a lot of money on entertainment.
6 Caribbean cruises/year.
👍
Those figures are far too low for every single place on the list!
It’s not how much you make or own. It’s how much you don’t spend or owe.
Inflation is the big unknown. Another stock market retreat and the the 60s-70s sideways movement will radically chang the equation. I think we will get all 3 (market correction, sideways movement and higher inflation). That radically changes the equation. Everyone might need a plan B where they live in eith a multigenerational home or a group home zLike them golden girls.
Your city revealed is a necessary piece of information on this thread. Are you in New York or Houston?
I would need more than even the San Francisco number of $4.7M to consider myself wealthy anywhere in the U.S., not just San Fran.
Well ... I’m way down the list.
Agreed. Never retire to a city. I am looking for a small town. Tennessee is the main target at this point.
Agree.
all these articles keep talking about “net worth” ... not sure if they actually mean “liquid net worth” or not ...
at any rate, net worth is NOT the measure of being able to live comfortably, whereas liquid net worth is such a measure ...
it matters not if you own a yacht or a mansion you live in if your income is at the social security level and/or your liquid savings (cash, bank accounts, money market funds, easily disposable securities) is minuscule ...
“Would I be better off wealthy?”
You made me smile. Almost 40 myself. I’ve seen so many foreboding financial articles through the years. Most would lead to despair if people compare themselves to the averages. Maybe that’s the point.
Like the dire warnings about the average costs of raising a child to 18, seemingly intended to convince aspiring parents they just can’t do it. I see many two-earner households “struggling” financially with their average 1.5 children, while large families with stay-at-home moms somehow have most of the things you described.
I don’t begrudge financial wisdom or prudence. Not in the least. But the “Eternal life” you mention hints at the God behind it all, who can and does provide all our needs through wisdom and (even) failings, in spite of all the mathematical “realities” of an economy.
“And I have led you forty years in the wilderness. Your clothes have not worn out on you, and your sandals have not worn out on your feet.”- Deuteronomy 29:5
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