Feeling “rich” is becoming as difficult it is to actually get rich, according to a new survey of Americans with at least $1 million in investable assets.
Of the more than 3,000 millionaires surveyed, just 8% — or roughly 240 — said they considered themselves wealthy, according to data released this week by Ameriprise Financial, which noted that many high-earners are focused on “protecting accumulated wealth.”
Among those millionaires, 31% put themselves in the middle class and roughly 60% of respondents said they are among the upper middle class, per the data that was earlier reported on by CNBC.
The remaining 1% of the one-percenters actually said they were poor or very poor.
Though the sum can vary among states, the average annual earnings of the top 1% of American taxpayers is roughly $652,657 — capping out at $952,902 for taxpayers in Connecticut, which boasts the highest top-1% threshold, according to financial advisory SmartAsset.
Thus, while having a seven-figure bank account does seemingly put an individual earner in the “rich” category, there’s a number of economic headwinds that could make even the highest of earners feel squeezed.
Aside from Fed Reserve’s interest rates currently sitting at a range not seen since 2001 — between 5.25% and 5.5% — the housing market has also been plagued by sky-high borrowing costs that have only begun to fall from their 8% peak this week.
As of Friday, the average rate on the benchmark 30-year home loan fell for the second week in a row — positive news for prospective homebuyers who just last month were getting priced out of the housing market as rates creeped up to 8%.
The latest decline brought the average rate on a 30-year mortgage down to 7.5% from 7.76% last week, according to mortgage buyer Freddie Mac.
It was the largest weekly decline since late 2022.
However, child-care expenses, auto loans, rental housing and even groceries remain high, especially for low- and middle-income earners who have been especially hit hard by soaring prices despite the Federal Reserve’s attempts to tamp down stubbornly-high inflation.
Millions of Americans are also now facing another kind of debt after student loan payments started accruing interest again on Sept. 1, with payments due starting in October.
Federal student loan borrowers haven’t had to make payments in over three years thanks to pandemic-era federal assistance.
With any savings from pandemic-era government stimulus checks dried up, many stretched borrowers have turned to opening new lines of credit to cover day-to-day expenses, causing delinquencies to hit a 10-year high.
This year, credit card delinquencies have hit 3.8%, while 3.6% have defaulted on their car loans, according to credit agency Equifax.
There are 70 million more credit card accounts open now than before the pandemic in 2019 and credit card debt surpassed $1 trillion for the first time ever this year, per the New York Federal Reserve.
Thus, it’s no wonder that Ameriprise Financial’s recent report is the second time in recent months that a survey has revealed that high-earning Americans don’t feel rich.
A survey conducted by Bloomberg in August of 1,000 Americans making at least $175,000 a year — putting them in the top 10% of US tax filers — revealed that 25% say they are either “very poor,” “poor” or “getting by but things are tight.”
The outlet said it surveyed people who have good jobs — including lawyers, construction company owners, doctors and franchise bosses — and who own their homes and have savings for retirement.
Still, only 50% described themselves as “comfortable” and only a quarter said they felt “rich” or “very rich.”
Some of the respondents making upwards of $5 million were among those who said they felt broke, according to Bloomberg.
Nearly 60% of the high-earning respondents said they worry about money, and about 25% don’t think they’ll be better off financially than their parents.