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Are You Wealthy? Not as Much as Last Year

Are you wealthy? Affluent investors describe themselves as less wealthy this year than last. Why the declining sense of financial well-being?

| BY Adriana Reyneri

 

Are you wealthy? Fairly wealthy, but I was better off last year, say high net worth investors participating in a Spectrem’s Millionaire Corner study completed in the first quarter of 2013 – 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 70.93 on the 100-point scale when asked “Are You Wealthy?” The score is down from last year, when the high net worth rated themselves at 71.70.  

Millionaires – individuals with investable assets of $1 million to $5 million – rated themselves at 60.46, up only slightly from the previous year (59.60). Non-Millionaire investors with investable assets of $100,000 up to $1 million – rated themselves at 48.35, basically unchanged from 2012, but down from nearly 54 in 2011.

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. More than half (57 percent) of high net worth investors are concerned about maintaining their current financial position. 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 9 million following three consecutive years of increase. The number of high net worth households rose to 1.14 million, while the number of affluent non-Millionaire households rose to 28.4 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?”

Affluent households who work with a financial advisor are more likely than self-directed investors to be more confident about their financial situation, according to Millionaire Corner research. Six-in-ten said that improving their investment returns is among the top three benefits of working with a personal financial advisor. Another is peace of mind. Check out Millionaire Corner’s exclusive “Best Financial Advisors” service to connect with a financial professional best suited to meet your financial needs and investment attitudes.