A new study suggests that everyone views millionaires as wealthy, except the millionaires themselves.
Only 8% of million-dollar investors consider themselves wealthy, and that’s recent Found a report from Ameriprise Financial. Instead, 60% classified themselves as upper middle class, and 31% considered themselves middle class. The study revealed that wealth is more than just achieving a specific dollar figure or a specific lifestyle. Rather, it is a mentality and a feeling of security.
“I think high-net-worth people tend to be cautious, they tend to be open, they tend to be intentional,” said Kimberly Mayes, a private wealth advisor at Ameriprise Financial. “Though it’s not necessarily some of the things we always think it is. It’s a little bit more focused on the behavioral mindset.”
The study surveyed 3,000 Americans between the ages of 27 and 77, 600 of whom were millionaires, and revealed insights into their perception of wealth.
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According to the study, 85% of millionaires believe that wealth means “a feeling of financial security.” Meanwhile, 66% believe that wealth is the ability to provide for themselves and their families, while 58% link it to the freedom to do what they want.
Mayes pointed out that the wealthy’s concept of wealth is not necessarily based on luxury.
“It’s not necessarily like driving supercars,” she said. “It’s just a matter of them being a little more careful and cautious in trying to make sure they protect what they have because the wealthy also have a little bit of fear. They know how difficult it is to build this project and they know it can disappear quickly.”
However, the study revealed a stark contrast between investors with more than $1 million and those with less.
Among the millionaires surveyed, 62% said their top financial priority was “protecting accumulated wealth,” 43% said “saving for retirement,” and 32% said “managing market volatility.”
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Meanwhile, the study found that 49% of investors with less than $1 million in assets prioritized “saving for retirement,” and 42% said “managing daily living expenses.” The study also found that 35% said “increasing income” and “paying off debt” were top priorities.
Travis Sholin, a financial advisor at Keystone Financial Services, noted that regardless of financial situation, saving for retirement remains a priority for both the wealthy and the less wealthy. He noted that “there is an emotional scarcity mentality ingrained in all people” and that a million dollars no longer has the same value due to inflation and the rising cost of living.
“Those who have accumulated more do not want to lose it, and those who are still accumulating are still worried about daily expenses,” he said. “Both people want security in their retirement. With inflation and the cost of living rising, everyone is feeling the pinch now. Even millionaires.”
Wealthy people tend to avoid risk more than they have access to credit, Mayes said. Hence, they focus on protecting their wealth rather than living lavishly. She said many of her customers look for deals when shopping and avoid unnecessary expenses.
“Some of the wealthier people I work with are also some of the more sedentary people. So they don’t do that, they’re not involved in a lot of things that you could get caught up in.”
There is a “chicken-and-egg problem,” Sholin said.
He acknowledged that the rich may not have acquired their wealth through their priorities, but rather acquired their priorities by virtue of their wealth. However, he said Americans could learn from the millionaire mentality in the long run.
He added: “Even for the elderly… they should educate themselves, their children and grandchildren about the importance of thinking long-term regarding investments and wealth.” “Because that’s what it’s really about. If they can create a long-term mindset psychologically, that’s how families become successful.”
Dylan Kroll is a Yahoo Finance correspondent.
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