We live in a world where the financial landscape changes on a daily basis. What is considered wealthy one day might not meet the mark the next. In the United States, your wealth is measured by your net worth, which is the total value of all of your savings, investments and your non-financial assets, i.e.personal property minus whatever debts you have.
Whether out of curiosity or because of a financial decision you need to make, you might be wondering if your net worth is considered wealthy in the United States. We help break it down below:
$1 million dollars is not what it used to be
Do not get us wrong. Anybody would love to have $1 million dollars. However, breaking the $1 million dollar ceiling in your net worth is no longer considered the standard of what is wealthy. These days, you would have to have about $1.9 million dollars of net worth or earn about $299,810 per year to be considered a member of the top 5% of earners in the United States of America.
However, the top 5% might not be what you consider as the standard for the wealthy. How about the top 20%? To fall under this bracket, your net worth will need to be at least about $500,000 dollars.
Your location dictates the value of your wealth
Different parts of the country have different costs of living. For example, in a study of 2019 living expenses, CNBC found that Hawaii is the most expensive state to live in. That means that $1.9 million dollars in Hawaii will not go as far as it will in Pennsylvania or Michigan.
If you are wondering about the cost of living in your state or the cost of living of a state where you are hoping to retire, you should consult this 2019 chart by the World Population Review.
Different people have different views on what is considered wealthy
Wealth is somewhat subjective. While there are standards as to what is considered wealthy enough to fall under a top 20%, 10%, 5% or 1% bracket, what is wealthy enough for your standards might be much less.
People from different generations have different views on what is considered wealthy. According to this study by Senior Living, Baby Boomers and Gen Xers consider $2.6 million dollars to be wealthy, while millennials consider $2.2 million dollars to be wealthy.
Calculating your net worth
You can calculate your net worth against the national average for your age group using this tool by Harness Wealth. This information might be simply interesting for you to know, but it also might help you make some decisions involving your finances.
Reach your financial goals with the help of a ProVise financial advisor
Do you aspire to increase your wealth so you can live a comfortable life and have a happy retirement? Not many people would say no to that. At ProVise Management Group, it is our mission to help people like you manage your finances to reach your long-term goals and live comfortably now.
Our CERTIFIED FINANCIAL PLANNER™ professionals can help you determine the best financial strategies to meet your long-term goals without exceeding your risk tolerance or sacrificing your values. We will work closely with you to assess your current financial circumstances and your goals to develop a personalized financial strategy for you.
We create personalized plans at a fiduciary standard of care and offer an unconditional money-back guarantee if you are unsatisfied with your written plan. All you have to do is return your plan to us and we will refund 100% of the fee paid.
Are you ready to talk to a ProVise financial advisor and start working on your personalized financial strategy to increase your net worth? Contact our ProVise team today to schedule a consultation.