Achieving “wealth” isn’t unusual goa. Unfortunately, the act of doing so is one game in which the goal posts keep moving — at least, according to one influential survey.
According to Charles Schwab’s recently released annual Modern Wealth survey, the threshold for “wealthy” in America increased 15% in the last year. In some major metro areas, the threshold moved even higher.
Big City Blues
Americans say they need an average net worth of $774,000 to live a “financially comfortable” life, according to the report, which surveyed 1,000 people between the ages of 21 and 75 earlier this year. And to be considered wealthy, Americans now say one needs a net worth of $2.2 million, up from $1.9 million last year and $1.4 million in 2018 (which, adjusted for inflation, would be just $1.6 million today).
For those in buzzy big cities, the wealth summit is an even higher mountain to climb:
- In San Francisco, the threshold for wealth is now $5.1 million, up 34% year-over-year. Next up is Southern California (which includes Los Angeles and San Diego) at $3.9 million, then New York City at $3.4 million.
- Of the twelve major metro areas surveyed, Denver reported the lowest net worth needed to be wealthy: just $2.3 million. It might be time to buy some ski gear.
Sharing is Caring: When asked what personal values influence wealth-management decision-making, 21% of respondents responded with “putting others first” — a nebulous category that includes making the best decision for their family and environmental values. Only 3% of respondents said their priority is “being risk-averse.” That might explain the memestock, crypto, and legalized gambling booms.
Rent Relief: While nearly every major city has seen rents soar this year, prices in SF remain 10% lower than in March 2020, the steepest discount in 100 metro areas according to data from home-search website Apartment List. A mass exodus of tech workers is partly the cause — so expect the wealth threshold to soon increase in Austin, Miami, Salt Lake City, and wherever else the techies end up next.