Broker Check

Are you High Net Worth or Mass Affluent?

November 25, 2023

Are you High Net Worth or Mass Affluent?

 

Everyone wants to assess their financial standing and understand where they fit regarding wealth. In Capgemini’s Wealth Report, individuals with a net worth ranging from $1,000,000 to $5,000,000 are categorized as high-net-worth individuals (HNW).  Those with a net worth exceeding $5,000,000 net worth are referred to as very-high-net-worth individuals (VHNWI), while those reaching the rarified air of $30 million and above net worth fall into the ultra-high net worth (UHNW) category. For comparison purposes, mass affluent individuals have a net worth of less than $1,000,000.

Wealth Defined in America:

According to Charles Schwab’s 2023 Modern Wealth Survey, respondents felt you must have a $2.2 million net worth is required to be considered wealthy in America.  However, the survey noted that 48% of Americans said they feel wealthy at a much lower $560,000 net worth.  It’s interesting to note that a net worth of $1.6 million would place you in the top 10% range in the United States, according to the US Census Bureau. The median household wealth in the US is approximately $166,900.

Shifting Perspectives on Wealth:

Over the years, the definition of being rich has evolved. The Schwab survey noted that well-being and peace of mind outweighed money and assets when it came to feeling wealthy.  Across generations, respondents defined personal financial success as having a fulfilling life, lower daily stress, experiences, good health, and time spent with loved ones ahead of financial scorekeeping.

The Power of Financial Planning:

Whatever wealth category you fall into or aspire to join, I recommend trying to be like the 35% in the Schwab survey that felt more confident with their finances.  The survey noted that 35% of respondents having a written financial plan feel more in control of their finances and confident they would reach their goals. Best-selling author and personal development guru Brian Tracy once said, “A clear vision, backed by definite plans, gives you a tremendous feeling of confidence and personal power.”   Having a clear plan for your life’s journey is an invaluable gift you can give yourself and your family.

In the end, remember that true wealth extends beyond your portfolio balance, whether you fall into the HNW, VHNW, UHNW, or mass affluent category. Be sure to take time to improve your relationships, experiences, and communities along the way.