About five months ago, I mentioned on this site that making $250,000 a year does not make you rich. People got angry with me for saying that. In the comments and around the internet. Apparently stating an obvious fact in a society that is dealing with a widening gulf between the haves and have-nots is controversial.
But at least I confined my financial musings to people in the six-figure range. A new report from Fidelity Investments says that people who are sitting on seven figures of wealth don’t feel rich until they have about $7.5 million.
I TOLD YOU SO….
Of course, feeling rich are being rich are probably two different things. I don’t feel like I’m poor, but my net worth is well below zero (and I’m not alone — about one-third of ATL readers are in the same boat, according to last year’s survey). If you want to contend that whether or not a person feels wealthy has nothing to do with whether or not the person is wealthy, you are free to do so.
But I’m going to cast my lot in with Hamlet: “for there is nothing either good or bad, but thinking makes it so.” According to the San Francisco Chronicle, there are a lot of people with low seven-figure net worth who find their financial situation to be a prison:
“Wealth is relative, and to some extent the more you have the more you realize how much more you need,” said Sanjiv Mirchandani, president of National Financial, a Fidelity subsidiary that provides clearing and custody services to broker-dealers, in an interview before the survey’s release Monday.
The more than 1,000 households surveyed had an average of $3.5 million in investable assets. About 42 percent said they don’t feel wealthy, saying they would need about $7.5 million to feel rich. The 58 percent of respondents who said they do feel wealthy were younger on average and have a greater number of remaining years in the workforce, said Mirchandani.
This all makes perfect sense to me. If you are sitting on $3.5 million when you are still young, you probably do feel wealthy, specifically because you plan on earning even more in the future. But if your prime earning years are solidly in your rear-view mirror, and you are looking ahead to retirement, supporting your privileged and lazy children, keeping your second spouse happy (your first one undoubtedly left you while you were busting your ass acquiring the $3.5 million — and now demands alimony), and doing all the traveling and relaxing you missed out on during your youth, yeah, $3.5 million probably doesn’t make you feel “rich.”
And who’s to say that they are wrong? As I’ve said before, Mo’ Money, Mo’ Problems.