Contrary to popular belief, millionaires and less wealthy investors across generations may be more alike than different when it comes to managing their finances, according to new research by Ameriprise Financial.
The research, part of the Ameriprise Modern Money study, which explores how investors navigate their financial lives, found that the No.1 financial priority for respondents is saving for retirement.
Boomers cited protecting accumulated wealth as their second priority, while millennials and Generation X investors are focused on paying down debt, the research showed.
The study found that a majority of people who have $1 million or more in investable assets do not consider themselves wealthy. In fact, only 13% of that group see themselves as being rich.
But 53% of millionaires said they have a specific target amount or a rough idea of how much they need to save and invest, with 43% indicating that they have a detailed plan. Only 4% of respondents said they do not have any type of financial plan.
“Building wealth is often a complex journey,” Marcy Keckler, vice president of financial advice strategy at Ameriprise, said in a prepared statement. “The reality is even people who have accumulated seven figures juggle many financial goals, wants and needs. It takes careful planning for investors to reach the financial milestones they’ve set out for themselves, even for those who’ve built sizeable nest eggs already.”
The study also found that respondents don’t want to mirror their parents’ investing practices. Forty-nine percent believe their approach to making long-term investing decisions is different or very different from what they saw their parents do growing up, compared with 42% who say it’s similar or very similar.
Forty-six percent of respondents said they handle investment decisions by themselves, 38% said they do it with someone else in their lives and 9% said their spouse or partner does it. Additionally, 51% of respondents agreed that aligning investments with personal values is more important today compared with 10 years ago – an attitude consistent across age groups, the study found.
As for their professional lives, respondents commonly cited their pay from their job as the most important factor in evaluating career options. They rank flexibility and work-life balance as the second-most valued job attribute, followed by benefits like health and dental insurance and vacation time, the report showed.
Moreover, today’s investors value experiences over things, the report said. More than half (58%) of respondents agreed that “experiences are more important than possessions” and that's where they would rather spend their money. The report noted that this is a more common belief now than it was a decade ago.