The magic number that Americans believe is necessary to be considered wealthy has increased significantly in the past year.
To feel rich, Americans believe you need to have a net worth of at least $2.5 million, according to A recent survey by Charles Schwab.
The figure has increased significantly from $2.2 million a year ago.
An individual’s net worth is a calculation based on the sum of his or her assets, such as a home and savings, minus his or her debts, such as credit card balances or a mortgage.
However, $2.5 million still may not be enough for residents of some of America’s largest and most expensive cities to consider themselves wealthy.
It takes a staggering $4.4 million net worth to feel rich in San Francisco
New York City, one of the most expensive cities in the US, requires a net worth of $2.9 million
A Southern California resident said a net worth of $3.4 million would make a resident wealthy
In fact, according to San Francisco residents, it takes a staggering net worth of $4.4 million to feel rich.
Only 16 percent of San Francisco residents surveyed believe they have their finances under control.
Most said high housing prices and the city’s high cost of living were the biggest obstacles to wealth creation.
For those living in Southern California, including the notoriously expensive cities of Los Angeles and San Diego, a net worth of $3.4 million was cited as the entry requirement to wealth.
East Coast cities such as New York, Boston and Washington DC needed more than the average of $2.4 million, with residents reporting a need of between $2.7 and $2.9 million.
Homeowners who have been in the process of purchasing a property for some time may have seen a significant increase in their net worth in recent years following rapid price growth since the pandemic.
There are more million-dollar homes in the United States today than ever before.
After a decade of ultra-low interest rates, slow housing construction and a lockdown-fueled “race for space,” home values have skyrocketed.
However, the recent higher mortgage rates over the past 18 months have not resulted in lower demand, as there are historically low numbers of properties available, pushing prices even higher.
So much so that now nearly 1 in 10 homes nationwide are worth $1 million or more.
However, the salary needed to be considered “rich” has increased in every state over the past five years.
| San Francisco | $4.4 million |
|---|---|
| Southern California (includes Los Angeles and San Diego) | $3.4 million |
| New York City | $2.9 million |
| Washington, DC | $2.8 million |
| Denver | $2.8 million |
| Seattle | $2.8 million |
| Boston | $2.7 million |
| Atlanta | $2.4 million |
| Chicago | $2.3 million |
| Houston | $2.3 million |
| Phoenix | $2.3 million |
| Dallas | $2.2 million |
The definition of rich has changed most in Washington state, according to Washington data, where Americans now need to earn $544,518 to be among the richest, up from $378,374.
The personal finance site defined the “rich” as those in the top 5 percent of earners in each state.
To fall into this category in 12 US states, workers must earn a salary of more than $500,000, it found, as household purchasing power has eroded.
Nevada experienced the second-largest increase over the time period: 40.41 percent, from $320,403 in 2017 to $449,872 in 2022.
Las Vegas residents say the once-affordable city has been priced out of their reach as wealthy Californians have migrated en masse to Nevada, driving up housing costs.