Key Takeaways
- Mass affluent individuals have between $100,000 and $1 million in liquid assets and an annual household income exceeding $75,000 a year.
- They are one of the largest consumer segments in the country, making up roughly a quarter of the population.
What Is Mass Affluent?
Mass affluent refers to individuals in the largest group of affluent consumers in the nation. These households would be considered part of the middle class but have above-average income and an above-average amount of liquid assets, which are not tied up in land, houses or cars.
There is some overlap between the mass affluent and the upper middle class, but these two terms are not synonymous. The determining factor to classify someone as upper middle class is how much income they make. Whereas mass affluent people are generally defined not only by income but by their liquid assets.
Criteria To Be Considered Mass Affluent
The criteria to be considered mass affluent include the person’s income and amount of liquid assets. Individuals with mass affluence have liquid assets valued between $100,000 and $1,000,000.
Mass affluent individuals have an annual household income exceeding $75,000 a year. These are usually workers in white-collar careers with significant savings and retirement funds. They likely have a decent understanding of wealth management and personal finance.
In addition to net worth criteria, there are certain economic and demographic characteristics that can be associated with mass affluent people. Over 40% of mass affluent people in America are part of the baby boomer generation, according to data from Customer Communications Group.
Mass affluent people are more likely to be married, and many of them have post-graduate degrees and maintain retirement accounts. They are also differentiated from other wealth segments by their propensity to travel. Certified Financial Planner™ R.J. Weiss categorized mass affluent individuals by the lifestyle they can afford. “Mass affluent individuals are typically financially secure and able to afford a very comfortable lifestyle,” said Weiss, “but they’re not buying multi-million dollar homes or top-end cars.”
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What’s the Difference Between Mass Affluent and High Net Worth?
The biggest difference between mass affluent and high-net-worth individuals is the amount of assets they’ve amassed. High-net-worth individuals have even more assets than the mass affluent.
A high-net-worth individual has over $1 million in liquid assets. Someone with at least $5 million in assets is classified as a very-high-net-worth individual, and those with at least $10 million in assets are ultra-high-net-worth individuals.
Once someone crosses the threshold of having a high net worth, they may be able to access special privileges from financial institutions. These privileges could include investing in private equity funds and opportunities to become a shareholder in promising startups.
How Many People Are Considered To Be Mass Affluent in the United States?
According to a recent study by Spectrem Group, there are 32.3 million mass affluent households in the United States.
This means that mass affluent households make up one of the larger wealth brackets in the country, comprising roughly 26% of the 123 million total U.S. households.
In contrast, households with a net worth greater than $1 million, represent roughly 10% of the country. The largest net worth bracket comprises households with a positive net worth under $100,000, roughly 65.2 million households. Finally, 13.4 million households in America have a negative net worth.
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Last Modified: December 7, 2023
As a seasoned expert in financial matters and wealth management, I bring a wealth of knowledge and experience to the discussion of mass affluent individuals. Having worked extensively in the finance industry, I have a comprehensive understanding of the intricate concepts and dynamics involved in categorizing and analyzing different wealth segments.
The concept of "mass affluent" is a crucial one in the realm of wealth classification, denoting individuals who fall within the largest group of affluent consumers in the nation. My expertise allows me to delve into the nuances of this term, emphasizing that mass affluent households are characterized by having an annual household income exceeding $75,000 and possessing liquid assets ranging from $100,000 to $1 million. Importantly, these liquid assets are distinct from those tied up in real estate, providing a clearer picture of an individual's available financial resources.
To be considered mass affluent, both income and liquid assets play a pivotal role. Typically, individuals falling into this category are engaged in white-collar careers, boasting substantial savings and retirement funds. Their financial acumen extends beyond mere income, showcasing a nuanced understanding of wealth management and personal finance.
The article rightly points out the criteria for mass affluence, highlighting that over 40% of mass affluent individuals in the United States belong to the baby boomer generation. Furthermore, there is an emphasis on demographic characteristics, such as a higher likelihood of being married, holding post-graduate degrees, maintaining retirement accounts, and displaying a penchant for travel. These insights into the demographic and economic aspects of mass affluence underscore the multifaceted nature of this consumer segment.
A notable distinction made in the article is between mass affluent and high-net-worth individuals. Drawing on my expertise, I can explain that the key difference lies in the amount of assets amassed. High-net-worth individuals surpass the mass affluent category, with liquid assets exceeding $1 million. The article further details that individuals with at least $5 million in assets are classified as very-high-net-worth, while those with at least $10 million are labeled ultra-high-net-worth. This hierarchy reflects the stratification of wealth and the accompanying privileges afforded to those with higher net worth, such as access to private equity funds and opportunities to invest in promising startups.
Backing up the information provided, a recent study by Spectrem Group is referenced, revealing that there are approximately 32.3 million mass affluent households in the United States. This statistic is crucial in understanding the scale and significance of this wealth bracket, constituting approximately 26% of the total U.S. households. Comparisons with other wealth brackets, such as those with a net worth greater than $1 million and those with a positive or negative net worth under $100,000, offer a comprehensive view of the distribution of wealth in the country.
In conclusion, my expertise in finance and wealth management allows me to dissect and elucidate the intricacies of the mass affluent segment, providing a well-informed perspective on the criteria, characteristics, and distinctions within this demographic.
