Feeling “rich” is becoming as difficult as getting really rich, according to a new survey of Americans with at least $1 million in investable assets.
Of the more than 3,000 millionaires surveyed, only 8% (about 240) said they considered themselves rich, according to the data. published this week by Ameriprise Financialwhich noted that many high-income people focus on “protecting accumulated wealth.”
Among those millionaires, 31% are in the middle class and approximately 60% of those surveyed said they belong to the upper middle class, according to data CNBC previously reported.
The remaining 1% of the one percent actually said they were poor or very poor.
Although the amount may vary between states, the average annual income of the top 1% of U.S. taxpayers is approximately $652,657, with a limit of $952,902 for taxpayers in Connecticut, which has the highest threshold for the top 1%. according to SmartAsset financial advice.
So, while having a seven-figure bank account seemingly puts a person with an individual income in the “rich” category, there are a number of financial headwinds that could make even the highest earners feel squeezed. .
Aside from Federal Reserve interest rates currently in a range not seen since 2001 (between 5.25% and 5.5%), the real estate market has also been affected by sky-high borrowing costs that have barely started falling from its high of 8% this week.
As of Friday, the average rate on the benchmark 30-year mortgage loan fell for the second week in a row — positive news for would-be homebuyers who just last month were being priced out of the housing market when rates rose as high as 8%.
The latest drop lowered the average rate on a 30-year mortgage to 7.5% from 7.76% last week, according to mortgage buyer Freddie Mac.
It was the biggest weekly drop since the end of 2022.
However, expenses for child care, car loans, rental housing and even groceries remain high, especially for low- and middle-income people who have been hit especially hard by rising prices despite attempts of the Federal Reserve to curb persistently high inflation.
Millions of Americans are also now facing another type of debt after student loan payments began accruing interest again on September 1, with payments due starting in October.
Federal student loan borrowers have not had to make payments in more than three years thanks to pandemic-era federal assistance.
With savings from pandemic-era government stimulus checks exhausted, many struggling borrowers have resorted to opening new lines of credit to cover everyday expenses, causing delinquencies to hit a 10-year high.
This year, credit card delinquencies have reached 3.8%, while 3.6% have defaulted on their auto loans, according to credit agency Equifax.
There are 70 million more credit card accounts open now than before the pandemic in 2019, and credit card debt surpassed $1 trillion for the first time this year, according to the New York Federal Reserve.
So it’s no surprise that Ameriprise Financial’s recent report marks the second time in recent months that a survey has revealed that high-income Americans don’t feel wealthy.
A survey conducted by Bloomberg In August, among 1,000 Americans who earn at least $175,000 a year (putting them in the top 10% of American taxpayers) revealed that 25% say they are “very poor,” “poor,” or They fix them but things are difficult.”
The outlet said it surveyed people who have good jobs, including lawyers, construction company owners, doctors and franchise heads, and who own their homes and have retirement savings.
Still, only 50% described themselves as “comfortable” and only a quarter said they felt “rich” or “very rich.”
Some respondents who earned more than $5 million were among those who said they felt broke, according to Bloomberg.
Nearly 60% of high-income respondents said they worry about money, and about 25% do not believe they will be better off financially than their parents.
