Inflation, geopolitical uncertainty and fears of a recession have undermined financial confidence across the board, according to a new report from Edelman Financial Engines.
Less than a quarter, or 23%, of more than 2,000 adults surveyed earlier this fall said they felt “very comfortable” with their finances. Fewer – just 12% – consider themselves wealthy, according to the report.
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Even with their high net worth, less than half of all millionaires, or 44%, felt ‘very comfortable’ with their finances and less than a third, or 29%, felt wealthy, according to the report. .
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“Becoming a millionaire has always been the pinnacle of financial success,” said Jason Van de Loo, head of wealth planning and marketing at Edelman Financial Engines.
But at a time when inflation and stress levels are up, and markets and wallets are down, “very few Americans actually feel rich.”
‘What would it take to feel rich?’
Today, fewer Americans, including millionaires, be confident in your financial situation.
According to a separate Bank of America report, 71% of workers believe their pay is not keeping up with the rising cost of living, bringing the number of people who feel financially secure to a low. lowest in five years.
Most adults said they felt less financially secure than they expected at this point in their lives, Edelman Financial Engines also found.
What would it take to feel rich? The short answer is more.
Jason Van de Loo
Head of Wealth Planning and Marketing at Edelman Financial Engines
To feel rich, most people said they would need $1 million in the bank, although wealthy people set the bar much higher: more than half said they would need more $3 million, and a third said more than $5 million would be needed. .
“What would it take to feel rich?” said Van de Loo. “The short answer is more.”
Americans are feeling the sting of inflation
Regardless of how much money they have, Americans in all walks of life are cutting back or compromising due to inflation and rising prices, including buying fewer things, spending less on food and entertainment and saving less for retirement or other long-term goals. .
Already, credit card balances rose 15% in the last quarter, the biggest annual jump in more than 20 years.
At the same time, the personal savings rate fell to 2.3% in October, a 17-year low.
“People are probably getting a lesson in frugality this year,” said Dave Goodsell, executive director of the Natixis Center for Investor Insight.