Somehow during the past year, the concept of “wealth” got downgraded.
According to a recent survey from Charles Schwab that gauged investor attitudes about various financial issues and other topics, respondents said that on average being wealthy means having a personal net worth of $1.9 million. That’s down from $2.6 million in the prior year’s annual “Modern Wealth Survey.”
The survey was a national sample of 1,000 Americans examining how they think about saving, spending, investing and wealth.
Survey participants also lowered the bar for how much money is needed to attain “financial happiness” and to be “financially comfortable.” Financial happiness can be achieved with $1.1 million, according to the recent survey. That’s much lower than the $1.75 million pegged in last year’s survey.
As for being financially comfortable, the new amount is $624,000 while it was $934,000 in the previous year’s survey.
The lowered numbers suggest that people have recalibrated their priorities and definition of wealth following the Covid-19 pandemic, said Schwab. Fifty-three percent of the respondents said they were financially affected by Covid-19. In that vein, 31% said their finances were harmed, 26% experienced a salary cut or reduced hours, and 20% were laid off or furloughed.
As a result, 68% of respondents said the pandemic has changed their lifestyle priorities. The top priority, noted by 69% of survey participants, is mental health. That was followed by relationships and financial health (both cited by 57%), and physical health (39%).
“The past year has of course caused Americans to focus on their health, in particular their mental health, along with the health of their relationships,” Rob Williams, Schwab’s vice president of financial planning, said in the survey report. “But the pandemic and the significant impact it had on the economy and stock market also taught us a valuable, and in many cases difficult, lesson about the importance of financial health and preparedness, including the importance of having a plan and emergency savings.”
Elsewhere in the survey, respondents felt optimistic about various topics ranging from the U.S. economy and stock market to the country's healthcare system and technological innovation (all had positivity ratings greater than 50%).
In short, it appears the pandemic hasn’t deflated the American spirit.