Is a net worth of $2 million “wealthy”? It depends on whom you ask: Younger Americans are likelier to answer “yes” than their elders — and likelier to believe they’ll join the ranks of the wealthy.
Schwab’s 2019 Modern Wealth Survey polled 1,000 Americans between the ages of 21 and 75, and provided some interesting contrasts among the generations when it comes to financial planning, social media, and whether becoming rich is an attainable goal.
And how much is needed to be considered wealthy?
Turns out the answer to that depends on your age. The older you get, the higher the bar for being wealthy. The average answer to that question among all participants was $2.3 million dollars; boomers and Generation X collectively set the mark at $2.6 million and $2.5 million, respectively.
Those averages were significantly higher than the average answers for respondents in Generation Z ($1.5 million) and millennials ($1.9 million).
And while boomers have a different standard of wealth from younger generations, they are also more realistic about achieving it. When asked if they expect to become wealthy in their lifetime, only 36% say yes, compared to 54% of Generation Xers and 80% of millennials.
What’s more, millennials’ generational optimism (60% of respondents believe they will be wealthy one day or already are) stands in contrast to the harsher realities in other areas (59% of the participants live paycheck to paycheck).
Younger people are also likelier to spend on experiences than save for the future.
With lower standards for wealth and more time for reaching that bar, 49% percent of millennials report spending money on experiences solely based on something they’ve seen on social media, as opposed to just 16% of boomers.
That contrast extends to real-world social networks, too: Forty-eight percent of millennials say they spend more than they can afford to participate in activities with friends, compared to only 16% of boomers
But despite all the financial benchmarks, 72% of participants across the board defined wealth as the “way they live their life,” not achieving a specific dollar amount.
That’s a nice reminder that money isn’t everything — even in a survey about wealth.