Individuals With Substantial Incomes Do Not Feel ‘Wealthy’

1. Rise of HENRYs (High Earners, Not Rich Yet): Despite an increase in average household net worth, a growing number of people find themselves identified as HENRYs due to rising inflation and financial instability, limiting their feeling of financial security and wealth.

2. Evolving Perception of Wealth: Only a small fraction of Americans, around 14%, consider themselves wealthy. The benchmark for feeling affluent has significantly increased, with 67% now believing that $1 million is necessary to feel rich, up from 57% a year earlier.

3. Financial Challenges Amid High Earnings: Despite high salaries, HENRYs face challenges related to the high cost of living and a widening savings gap. More than half of Americans earning over $100,000 a year live paycheck to paycheck due to increased market volatility and inflation.

4. Debt and Economic Pressure: Increased reliance on credit cards for daily expenses has led to a surge in credit card debt, while the personal savings rate has declined. High-cost debt is now cited as the most significant obstacle to building wealth.

5. Factors Influencing Financial Insecurity: Social media pressures and the desire to maintain appearances contribute to overspending, creating a sense of being overextended financially. Long-term goal setting and understanding the balance between spending and saving are crucial to achieving financial security.

Conclusion:

The concept of feeling wealthy has shifted, with a larger proportion of the population identifying as HENRYs despite increased net worth. High earnings do not equate to financial comfort due to rising living costs, increased debt, and evolving perceptions of wealth. Challenges in achieving the American dream, especially regarding homeownership, have added stress to individuals' financial well-being, requiring a reevaluation of long-term financial goals.

Reference:

Dickler, Jessica. "The Elusive Feeling of Wealth: High Earners Struggle Despite Net Worth Growth." Financial Insights Today 16 Dec. 2023, pp. 8-12.