How Americans Define “Wealthy”? Revealed by Survey Results

Have you ever thought about what your standard is when it comes to talking about “poor” and “rich” people? In other words, how do you define “wealth” and “financial success”? Perhaps you believe that wealth means having a certain amount of money in your bank account or reaching a specific investment goal. However, the results of a recent survey conducted by Fidelity Investments on “defining wealth and financial success” revealed that people’s understanding of wealth can vary significantly.

According to Fidelity Investments’ study called “Wealth Navigation,” the majority of Americans have a relatively practical definition of being “rich.” The survey showed that 71% of respondents believe that being able to break free from living paycheck to paycheck is a sign of wealth.

Other criteria include the ability to afford travel and vacations, which 57% of respondents agreed with; 56% of people think wealth means leaving an inheritance for their descendants; 49% define “rich” as being able to own a home; and 41% believe that wealth entails being able to donate to charitable organizations.

The responses from high-net-worth individuals are similar. In this group, 65% of people see being able to travel and vacation as a hallmark of being “rich,” with 54% considering “not depending on a salary for living” as the second most important criterion.

If you feel that you are not wealthy enough, you are not alone. The survey found that 89% of Americans do not consider themselves “rich,” while 70% hope that their future generations will be wealthier.

The findings of the “Wealth Navigation” survey indicate that regardless of income or asset levels, respondents unanimously believe that it is essential to increase comfort in discussing family finances, as many American households feel uncomfortable talking about money.

More than half (56%) of respondents said their parents never discussed money matters with them; meanwhile, the majority (81%) believe that receiving financial education from parents at an earlier age would greatly benefit them.

Encouragingly, most Americans are now changing this trend. Four out of five people say that discussing financial topics with the younger generation is important, and two-thirds have already started actively engaging in such conversations at home.

Many American families consider money and wealth to be taboo topics that can lead to discomfort, partly because most Americans have learned and accumulated wealth on their own. The research found that 80% of Americans consider themselves as having started from scratch and obtained their current wealth through their hard work, while only 5% say their wealth was inherited.

This might explain why many people, especially older Americans, are often reluctant to involve the whole family in discussions about financial planning. In fact, one-third of Baby Boomers even do not see the need for financial planning, the highest proportion among all generations.

However, Baby Boomers’ families are poised to transfer trillions of dollars in assets to the next generation in the next one to two decades. According to Federal Reserve data, the average inheritance of assets passed down by American families to the next generation is $46,200.

This means that regardless of income and asset levels, many people will have a certain amount of wealth inheritance. Therefore, as the “great wealth transfer wave” is about to begin, discussing money matters at home and jointly developing family financial plans are crucial for intergenerational wealth inheritance and preservation.

The report on “Wealth Navigation” is based on a nationwide online survey with the participation of 1,900 American adults aged 18 and above. This includes data from 1,200 regular respondents, with a balanced distribution in terms of gender, age, income, geographic location, and race. The results for the High Net Worth (HNW) individuals are based on those with $1 million or more in investable assets (excluding real estate or retirement funds).