This is a question that many people ask themselves in quiet moments but would never have enough nerve to say out loud.
What does “being rich” mean? As it turns out, the definition seems to be changing.
What’s the Dollar Figure for Being Rich?
How much money do you need to be considered rich? Well, according to Schwab’s 2021 Modern Wealth Survey, Americans believe it takes a net worth of $1.9 million to qualify a person as being wealthy. (Net worth is the sum of your assets less your liabilities.)
To get a clearer picture of where you rank, check out this wealth report card:
- People with the top 1% of net worth in the U.S. in 2022 had $10,815,000 in net worth.
- The top 2% had a net worth of $2,472,000.
- The top 5% had $1,030,000 and the top 50% had $522,210.
- The top 10% had a net worth of $854,900.
If you still want to picture where you fit, consider that there are 6.7 million people with a net worth between $1 million and $5 million.
A Different Measure of Wealth: The American Dream
This was so imbedded into the American psyche that the dictionary deems it to be a “noun phrase.” The definition is: “A happy way of living that is thought of by many Americans as something that can be achieved by anyone in the U.S. especially by working hard and becoming successful.”
Successful was not defined, but the American Dream also typically includes the idea of owning your own home, being married and having 2.3 children.
Figure in the Racial Wealth Gap
Unfortunately, the American Dream is not available for everyone. Housing equity makes up about two-thirds of all wealth. We know that there is discrimination in employment and wages. But even for African-American families that do earn decent incomes, housing policies, redlining and other discrimination has prevented them from acquiring land and housing to achieve the American Dream. The average wealth for white families is seven times higher than the average for wealth for black families. More than one in four black households have zero or negative net worth, compared to fewer than one in 10 white families.
It’s shocking when you look at the U.S. wealth gap with minority groups. Net worth is more than just the dollars and cents. It also needs to be looked at through a kaleidoscope of education, race, ethnicity, homeownership, family size and access to credit, among other things.
The New American Dream for the Next Generation?
Gen Y and Gen Z seem to be more excited by …….