Even Millionaires Feel the Financial Strain: Survey Reveals Many Consider Themselves Middle Class
A recent survey conducted by Ameriprise Financial has found that even millionaires are feeling the financial strain and categorizing themselves as part of the middle class. The survey revealed that about 60% of investors with $1 million or more in investable assets consider themselves upper middle class, while 31% classify themselves as middle class.
“There is no standard definition of what it means to be wealthy, but in general, investors associate it with having the means to live life on their terms,” said Marcy Keckler, senior vice president of financial advice strategy at Ameriprise.
The survey sheds light on the increasing financial pressure faced by the wealthy, with rising costs impacting their ability to save for the future. Many Americans are questioning whether a seven-figure income is enough to navigate the current economic climate comfortably.
Several reports this year have highlighted the financial strain experienced by higher-income individuals, with expenses such as child care and grocery bills on the rise. As a result, many are finding it difficult to save, leading to an increase in household credit card debt. According to recent data from the Federal Reserve, household credit card debt has surpassed $1 trillion, and the savings rate among Americans is dropping.
Additionally, the survey reveals that the dream of homeownership is being abandoned by a growing number of millionaires and high-income earners. Rising prices and lower asset values have left many feeling squeezed financially.
The Pew Research Center has also provided insights into the realities faced by the “regular rich.” Using 2018 figures adjusted for the cost of living in 2020, the center defined middle-class households as those with incomes ranging from $48,500 to $145,500. However, a more recent study by Bloomberg shows that a quarter of America’s “regular rich,” who earn at least $175,000 a year, consider themselves either “very poor,” “poor,” or “getting by but things are tight.”
Despite their high incomes, close to 60% of these individuals still experience financial stress. This stress can stem from various factors such as mortgage and student loan payments, as well as the cost of daycare and college education for their children.
The survey also highlights the impact of location on financial comfort. Some cities and neighborhoods have higher concentrations of high-net-worth individuals, leading to increased prices for everyday amenities and less disposable cash. As a result, some wealthy professionals are choosing to move to areas with similar amenities but a lower cost of living.
Overall, the survey reveals that even millionaires are not immune to financial pressure and the challenges of maintaining a comfortable lifestyle.