Finding Wealth in Well-Being

by | Jul 21, 2023

Wealth—like beauty, apparently—is in the eye of the beholder.

Because while 48% of respondents surveyed by Charles Schwab reported feeling wealthy, their $560,000 average net worth (total assets excluding real estate) was only about 25% of the $2.2 million they said was needed to be considered wealthy.

So given the numerical disparity, what has these Americans feeling wealthy?

It’s not so much about the money, but about how they feel—as in their well-being. That ranked No. 1 of 8 “feeling wealthy” attributes, outpacing money, assets and necessities, respectively.

High-ranking elements of well-being were:

  • Having a fulfilling personal life.
  • Enjoying experiences.
  • Having a healthy work-life balance.
  • Good health and family relationships.

Further indicative of respondents’ wealth perspective was a decided preference for having time (61%) over money (39%). This was true for all respondent groups (Gen Z, Millennials, Gen X and Boomers, all aged 21 – 75), with the largest margin, 67% vs. 33%, understandably occurring among Boomers.

The View of Financial Planning

Sadly, 65% of respondents reported having no formal financial plan in place. This can be troublesome because while well-being may not be a direct function of wealth, a lack of financial structure can ultimately impact or compromise the experiences or attributes that support or enhance one’s well-being.

The two top-stated reasons for not having a financial plan were “don’t have enough money” and “seems too complicated.” 

These are unfortunate perceptions because:

  • “Not having enough” is even more reason to have a plan, given the potential harm to one’s net worth due to, among other reasons, a market downturn; being misallocated (often with excessive risk); or having assets in a default, no-risk/low-growth saving option of an employer’s retirement savings plan.
  • “Seems too complicated” may be overcome or minimized given the widespread—even free—availability of expense or budget tracking tools via online banking, credit card issuers or by software download. For income or asset growth, low-expense index funds provide diversification and broad market participation. To mitigate risk, age-based savings accounts automatically reallocate assets over time.

Take it From Those with a Plan

According to the research, 92% of respondents with a financial plan are confident of reaching their financial goals. In fact, 70% reported feeling more in control of their finances.

While the study does not define the underlying confidence boosters to well-being, likely contributors include having an appropriate portfolio, maintaining a diversified asset allocation, knowing your expenses, and saving sufficiently—especially in near-retirement and retirement years.

An added benefit of having a plan in place is having up-to-date account beneficiaries or an otherwise current estate plan. Following an account owner’s passing, these may help avoid asset distributions via probate, which can be costly and disruptive.

Ask for Your Plan

Though the internet is a near-infinite source of financial information—with some of it unproven—financial planning will always be a very personal process capable of adapting to life’s changes.

Accordingly, we always recommend 1:1 guidance in creating a comprehensive plan, with assets visible at verifiable and accredited institutions like Charles Schwab.

At MS Financial, our licensed practice is certified with the coveted CFP® designation, one that requires extensive rigor, ongoing training and the highest of ethical standards. If you or someone you know might be interested in our financial planning services, please reach out. We are happy to discuss our no obligation process.

Note: The Charles Schwab Modern Wealth Survey 2023 was conducted in March 2023 among 1,200 adults, representative of the American population nationally. Click here for the published study results

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