Would you “feel wealthy” if you were a millionaire? Surprisingly, over 70% of people who’ve reached millionaire status don’t actually feel wealthy, according to a 2013 survey by UBS.
The survey questioned 4 500 people about their wealth. All participants were not only millionaires. They each possessed at least $1 million that were “invested or available to invest”, which excludes the value of material assets and real estate. It’s likely that many of these people were worth well OVER one million…
SO… How much money does it actually take to be “wealthy”? It seems to be around $5 million. That’s the level at which most respondents claimed they had “no constraints on activities”.
However, there might be something else to the story… As one Redditor commented, wealth can be seen as a measure of how you can live off investments, not just how much you’re worth.
“$1MM invested conservatively will earn you around $50K/year in returns. An established household could live on that, but not without major economizing steps — and any occasion that caused them to dip into principal would have a major impact.
“$5MM invested conservatively will earn you around $250K/yr. An established household can live on this easily, and also easily adjust to making occasional dips into principal.
I think this is the best illustration of why $1MM investable isn't considered wealthy, while $5MM is.