Why $2.3 Million Isn’t Enough

I just came across an article with the headline: Is $2 million dollars enough to feel wealthy? Here are my thoughts, backed up by data and research. Enjoy. Add me on Instagram: GPStephan

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According to The Modern Wealth Survey conducted by Charles Schwab, the average number that someone felt they’d need to consider themselves “wealthy” is $2,270,000.

Now first of all, lets look at this objectively…$2,300,000 dollars IS a lot of money. Considering that the median net worth of the average US household is just under $100,000…at $2.3 million, you’re doing SIGNIFICANTLY better compared to most people.

However…when it comes to feeling “rich,” here are a few things that some people don’t consider:

The first is cost of living.
For example, in New York…$2.3 million dollars is REALLY equivalent to about $1,960,000 in terms of what you get for your money.
Whereas in Mississippi, $2.3 million dollars is REALLY equivalent to $2,610,000 in terms of what you get.

This is also backed up by another study by Charles Schwab which found that, in Charolette North Carolina, $1.8 million was the amount needed to feel wealthy. But if you move to San Fransisco, and that amount jumps to $4.2 million.

NOW SECONDLY…when looking at a sizable sum like $2.3 million dollars, it’s a lot less important to focus on the total amount you have, but instead how much that money will realistically last you for the rest of your lifetime.

Like I mentioned earlier, $2.3 million invested should be able to safely generate an income between $55,000 and $90,000 per year conservatively, depending on where it’s invested, for the rest of your lifetime without you ever having to worry about running out. However, feeling “rich” earning between $55,000 to $90,000 annually doesn’t quite cut it according to surveys, apparently…

This is because according to a study by YouGov, MOST people surveyed felt that someone earning $90,000 a year was “neither rich, nor poor.” And earning $100,000 or more per year became the crossing point where 56% of people surveyed felt like that would make them “Rich.”

And what’s even more surprising is that throughout ALL income brackets under $150,000…less than 10% of them felt rich. This was the same result when they surveyed people earning $40,000 per year as it was for people earning over $90,000 per year…despite how much they make, 90% don’t feel like they make enough to consider themselves rich.

The reason behind this, is that we ALWAYS compare our income with those who are doing better than us, and how much money we make quickly just becomes our new “normal.” A poll was conducted several years ago that highlights this perfectly…

Almost HALF of the people earning $30,000-$49,000 per year felt that making $100,000-$500,000 per year would make them rich. But if you asked people earning over $100,000 per year what income THEY would feel rich at, nearly HALF of those people felt like they’d need to make more than $500,000 per year to consider themselves “rich.”

Basically, YouGov found that the more money you make – the higher the bar is set, and the more you need to make to think of yourself as “Rich.”

This isn’t just my opinion, either…more studies have shown that even once you reach MILLIONAIRE status, that the majority of them now believe it’s $7 MILLION to feel wealthy:

At the end of the day, feeling “rich” is a state of mind NOT characterized by numbers, but instead by your own gratitude for appreciating what you have. This very much goes in line with the saying: wherever you go, there you are. That’s why I believe having $2.3 million is enough to BE rich…but not enough to FEEL it once you’re there. Because at the end of the day, feeling like you’re wealthy is the journey…it’s NOT the destination.

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