Are you wealthy? Affluent investors describe themselves as less wealthy this year than last. Why the declining sense of financial well-being?
Are Are you wealthy? Fairly wealthy, but I was better off last year, say high net worth investors participating in a Millionaire Corner study completed in the first quarter of 2012 – research that indicates affluent Americans are feeling more sober about their personal finances and the U.S. economy.
The high net worth – as well as less affluent investors - were asked to define their wealth status using a sliding scale with zero representing “poor” and 100 representing “rich.” Across all wealth segments, investors rated themselves as less wealthy this year than last year.
High net worth investors – those with investable assets of $5 million to $25 million – rated themselves as 71.70 on the 100-point scale when asked “Are You Wealthy?” The score is down from last year, when the high net worth rated themselves as 73.18.
Millionaires – individuals with investable assets of $1 million to $5 million – rated themselves below 60 in the first quarter of this year, down from more than 63 for the same period in 2011. The Mass Affluent – non-Millionaire investors with investable assets of $100,000 up to $1 million – rated themselves below 48 this year, down from nearly 53 last year.
Why a less positive response to “Are you wealthy?” It appears that elevated personal and financial concerns are eroding the sense of well-being among affluent Americans. High net worth investors are expressing significantly higher levels of concern about maintaining their current financial position. The concern is shared by 61 percent of the high net worth this year, compared to 44 percent last year. Worry over the financial impact of health care costs and the financial well-being of children and grandchildren round out the list of top personal financial concerns. High net worth investors are also increasingly preoccupied with the national debt, political environment and prolonged economic downturn. Non-millionaire investors share similar concerns to Millionaires and high net worth investors, but also rank retirement security among their top concerns.
Affluent investors may be feeling less wealthy than they did last year, but Millionaire Corner research shows that the number of wealthy Americans continues to grow. Millionaire households now number 8.6 million following three consecutive years of increase, according to our Affluent Market Insights 2012. The number of high net worth households rose to 1.078, while the number of affluent non-Millionaire households rose to 13.8 million and the number of households with investable assets of $25 million or more rose to 107,000.
Despite three years of gains, the affluent market has yet to recover to pre-recession levels. The lingering effects of the recession may be contributing to the more subdued response to the question, “Are you wealthy?”