Welcome to Extreme Investor Network, where we provide you with unique and valuable insights into personal finance. Today, we are diving into the topic of wealth and financial confidence among Americans.
According to a recent report by Edelman Financial Engines, only 12% of Americans consider themselves wealthy, even among millionaires, where just 33% share the same sentiment. This is surprising given the unprecedented wealth boom that the U.S. has experienced in recent years.
While the rich are indeed getting richer, with the total net worth of the top 1% reaching a record $46.2 trillion in the first quarter of 2024, much of this wealth is concentrated among homeowners. As Jean Chatzky, personal finance expert, points out, homeownership may not always feel like wealth as homes are assets we use daily.
However, with a prolonged period of high inflation and rising costs of living, many households are feeling the pressure. The consumer price index increased by 2.5% in August relative to a year earlier, signaling that while inflation may be cooling, prices are not necessarily falling.
One major financial challenge facing Americans is credit card debt. With a record $1.14 trillion owed on credit cards and the average balance per consumer at $6,329, many are struggling to make ends meet. High-interest credit card debt can be a savings killer, preventing individuals from building real wealth.
In a survey conducted by Edelman Financial Engines, it was found that most people would need at least $1 million in the bank to consider themselves wealthy. Additionally, 58% of those surveyed said they would need to earn $100,000 on average to not worry about everyday living expenses.
Ultimately, feeling financially secure is less about how much you earn and more about your commitment to saving, investing, and working with a financial advisor. As Isabel Barrow, the director of financial planning at Edelman Financial Engines, emphasizes, it’s about living within your means and avoiding debt.
At Extreme Investor Network, we believe that true financial confidence comes from a combination of smart financial decisions, strategic planning, and a clear roadmap for the future. Stay tuned to our blog for more tips and insights on personal finance.