Americans now say they need less money to feel rich

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Nothing like a pandemic to focus the mind on what really matters.

Every year, brokerage giant Charles Schwab surveys 1,000 people between age 21 and 75 to find out what they think it takes to be considered wealthy. The magic number, across all the participants, was around $2.4 million for 2017, 2018 and 2019. Snore.

This year, however, the figure has fallen about 17% to $2 million. It dropped even more, by 23%, when measured over just the past six months — in January, people had said they needed $2.6 million to feel rich.

The survey also revealed some silver linings when it comes to personal finances. Thirty-six percent of Americans say they are more likely to have savings to cover emergency expenses, and 40% say they are more likely to be saving more in general compared to before the pandemic outbreak in the U.S. Twenty-four percent say they are now more likely to have a financial plan, and while around 30% of those surveyed express some apprehension about investing, roughly one in five say they are more likely to invest more in the stock market (19%) or start investing (22%) during this time.

Other perceptions have also changed. A question about which factors contribute the most to one’s overall happiness — relationships, health, money, lifestyle and career — shows that the importance of relationships rose over the past six months, while that of money stayed largely the same. When results were broken down by generation, the influence of money on happiness fell slightly for millennials and boomers, and increased for Gen X-ers.

And what about health? Millennials were the only group to say health was more important to overall happiness in June compared with January. Health’s contribution to overall happiness went down for older generations, particularly boomers. The value of careers was downgraded by millennials and Gen X-ers, and was not even a factor for boomers. The importance of lifestyle almost doubled for boomers from January to June.

A regrouping around relationships was also seen after another traumatic event in U.S. history, the terrorist attacks of Sept. 11, 2001. A Pew Research Center survey of 1,500 people found 37% of respondents wanted to spend more time with family that holiday season, and 54% of parents were making an effort to spend more time with their kids.

Bloomberg News
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