Tuesday, July 23, 2013

The Rich Feel Poor If They Have Less Than $5 Million

Rich investors say that it takes at least $5 million to feel wealthy, according to a new investor sentiment report from UBS. Meanwhile, two-thirds of millionaires don’t consider themselves to be wealthy.

They also define being wealthy not as having a certain amount of money, but having “no financial constraints on what they do.” That does indeed likely come with a large price tag.

The good news for the uber rich is that less than 20 percent have a pessimistic view of the long-term economic outlook. That differs sharply from the general population, as half of Americans say the economy is getting worse.

The inflation of how much the rich thinks it takes to be rich comes at a time of skyrocketing income inequality. The country’s CEOs now make 273 times what their workers do, while incomes for the wealthiest 20 percent are eight times greater than those in the bottom 20 percent. And while wages in top-paying jobs have been holding pretty steady, those for the lowest paying jobs are falling further and further behind.

While the rich worry about whether they can make enough to do whatever they want, most Americans are worrying about whether they can make their next rent payment. Three-quarters of the general population is currently living paycheck-to-paycheck with little stored away in emergency savings.

Meanwhile, the American Dream has become even more mythical as the social class someone is born into heavily determines how much they’ll make later in life. A third of those who grow up in the top 1 percent will make $100,000 by age 30, while just one out of every 25 people in the bottom half of the income distribution will do so. The rich may not have to worry too much about reaching that $5 million threshold.

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