Money Expert Explains Why ‘Wealth’ Is Subjective — and the No. 1 Factor That Trumps Dollar Amount
Written by
Adam Palasciano
Edited by
Cory Dudak
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Most people dream about being “wealthy.” Not having any financial worries seems like an unattainable reality for most Americans. With the elevated cost of housing, groceries and other everyday expenses, it might be more difficult today than ever to be wealthy.
But, wealth is about more than just the figures in your bank account.
Most Americans Millionaires Don’t Feel Wealthy
According to Northwest Mutual’s Planning and Progress Study 2024, only 32% of American millionaires consider themselves “wealthy,” and 48% believe that their financial plans need improvement. Generally, those with $1 million or more in investable assets can consider themselves wealthy.
So, if you’re an average American, you probably don’t feel wealthy at all. However, the way you think about wealth makes a huge difference.
Wealth Is Subjective, Not Just About How Much Money You Have
One of the most common misconceptions about wealth is that it’s all about how much money you have. The reality? Wealth itself is subjective.
“The misconception is that there’s an actual number and when people hit that number, they’ll suddenly feel wealthy,” Charles Chaffin, co-founder of the Financial Psychology Institute and a professor at Iowa State University explained in a CNBC Make It article. “Wealth is a subjective experience and is more than just how much money you have.”
You can get a raise at work or come into a financial windfall. Then, you might be able to save and invest more money. But after you hit your money goals, you could find yourself saying “Well now what?” Being wealthy can be more about how you perceive your financial standing rather than the figures in your bank account.
Two ways to feel wealthy are to avoid obsessing over your spending and, at the same time, set financial goals so you can stay on track. You might just reach your financial goals early with persistence and hard work.
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