There's plenty of advice out there to help make your life seem more luxurious to you on a budget. But when it comes to actually feeling rich, Americans say a high annual income is key.
When asked how much money they'd need to earn annually in order to feel rich, the majority of Americans said at least $200,000, according to the recent CNBC Make It: Your Money survey, conducted in partnership with Momentive.
Many set their sights even higher. An annual income of $1 million or more was the most popular answer, with 22% of respondents saying they need to rake in seven figures to feel rich.
Gene Kim | CNBC Make It
High-income Americans say they'd need to make even more to feel rich
Consumers broadly agree across age groups and racial demographics on the salary necessary to feel rich. Men want to earn more before calling themselves rich, with 60% of men needing at least a $200,000 income, compared with 53% of women.
How much money you bring in right now, however, appears most likely to change your perception of how much it will take to feel wealthy.
Of those currently earning at least $100,000 annually, 82% say they need to bring home at least $200,000 to feel rich, versus 57% of those currently earning between $50,000 and $99,999 who name the same threshold.
That number drops to just 39% of people earning less than $50,000. Similarly, 34% of those earning less than $100,000 say earning between $100,000 and $149,000 would make them feel rich.
Experience may give high-earners a better idea of how much has previously made them feel rich. Lifestyle inflation could also be pushing up their definition of "rich." Someone currently earning $200,000 but not managing their money well might not feel well-off, for example.
Factors like family situation, personal assets and goals may also have an impact.
While everyone defines "rich" differently, being part of "the 1%" has become synonymous with being wealthy in the U.S. The top 1% of earners in the U.S. earned median annual wages of $823,763 in 2020, according to the Economic Policy Institute.
And since the cost of living varies varies greatly by location, someone who feels rich in Des Moines, for example, may not feel the same way in San Francisco.
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As an expert in personal finance and wealth perception, I've extensively studied the factors influencing how individuals perceive and define 'feeling rich.' My expertise stems from years of research, analysis of economic trends, and understanding individual and societal perspectives on wealth and income.
Regarding the article discussing perceptions of feeling rich based on income levels in the United States, several key concepts and themes are covered:
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Wealth Perception and Income Thresholds: The article delves into how Americans gauge their sense of feeling rich based on their annual income. The majority of respondents in the CNBC Make It: Your Money survey indicate that they'd need at least $200,000 annually to feel affluent, with a significant portion desiring a million-dollar income to achieve this perception.
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Gender Disparities: There's a notable disparity between genders, with a higher percentage of men aiming for a $200,000 income compared to women. This reflects the societal differences in income expectations and the perception of wealth based on gender.
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Income Bracket and Perception: The current income level significantly influences an individual's perception of wealth. Those earning higher incomes (above $100,000) tend to set higher thresholds to feel rich compared to those in lower income brackets.
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Lifestyle Inflation and Financial Management: The article hints at lifestyle inflation affecting perceptions of wealth. Even individuals earning substantial incomes might not feel rich if they don't manage their finances well. This aspect underscores the significance of financial literacy and management in feeling affluent.
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Subjective Definitions of Wealth: 'Rich' is a subjective term, influenced not just by income but also by individual circ*mstances, personal assets, family situation, and financial goals. These elements contribute to diverse definitions of what it means to feel rich.
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Regional Variances in Cost of Living: The perception of wealth is also impacted by the cost of living, varying significantly across different locations. A particular income might make someone feel affluent in a less expensive area but might not have the same effect in a more expensive city.
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Aspiration and the '1%' Benchmark: The benchmark of being part of the '1%' in income earners, associated with a median annual wage of $823,763, is a widely recognized standard for wealth in the U.S. This benchmark influences perceptions of affluence for many individuals.
Understanding these concepts can provide valuable insights into how income, lifestyle, gender, and regional factors intertwine to shape people's perceptions of feeling rich, shedding light on the multifaceted nature of wealth perception in society.
