Most Millionaires Don’t Consider Themselves RichBy: Mike Tuttle - July 28, 2013
What does it take to be rich in America? Does the word “millionaire” mean what it used to mean? We ran a story previously about a couple who won a million dollars in a lottery scratch-off. They were paying off their mortgage and taking a vacation. Presumably, it was back to work after that. A million dollars ain’t what it used to be.
Investment firm UBS has published the results of a study they did called “What is Wealthy?” Their findings about how millionaires view themselves may surprise you.
Some of the main points of the study include the fact that people with one to five million dollars do not generally consider them selves to be “rich”, at least not until they actually hit the $5 million mark. In the $1M to $5M range, only 28% of respondents said they thought they were “wealthy”. Once the $5M mark was attained, that number jumped to 60%, but still short of a full agreement on the nature of “wealthy”.
When further asked, “What does it take to be considered ‘wealthy’?” 50% of respondents answered, “No financial constraints
Another result of the study that is worth noting is that millionaires tend to keep about 20% of their wealth in cash, liquid and available. And they do not intend to change that tactic.
The majority feel they have the right amount of cash (64%) and expect to keep the same level of cash for the next 12 months (56%). More than one-quarter (27%) plan to reduce cash holdings in the next year, but 18% plan to increase their cash, so the net change will likely be minimal.
Millionaires also indicated that they often care for parents or adult children with their wealth, either paying for minor expenses, having someone living with them, or helping them to borrow so they can pursue their own goals.