How much money would you need to feel rich? The answer probably depends on how much you’re earning now.
According to a consumer survey by Mississauga-based Empathica Inc., the idea of what constitutes “wealthy” varies based on one’s income.
Of the nearly 4,800 U.S. and Canadian survey participants polled, almost half of those with a household income of between $50,000 and $60,000 (U.S) said they’d consider themselves wealthy if they earned $100,000 or more a year. Yet only 16 per cent of respondents who actually made that amount thought of themselves as wealthy.
Of that higher income bracket, 43 per cent believed they’d need at least $250,000 a year to be wealthy, 24 per cent said they’d need $500,000 a year, and 11 per cent said they’d need at least $1-million a year.
As the poll results suggest, those among society’s 1 per cent probably feel just like the rest of us. No matter how much we earn, it seems, wealth is always just out of reach.
Gary Edwards, chief customer officer of Empathica, which helps businesses and brands improve customer experiences, says even high-income earners may not consider themselves rich because it’s human nature for people to want what they don’t have. Moreover, he says, there’s a tendency in our society for people to live at least a little bit beyond their means. Thus, the more we earn, the more we spend.
“Even if we’ve got a big house and a pool and two great cars, we don’t consider ourselves wealthy because we think, ‘God, I hope the pump doesn’t break in the pool,’ and ‘I’ve got to make the car payments this month,’” Dr. Edwards says.
“I think wealthy, then, is a state of mind. It’s a perception of financial freedom. And as people make more money, they don’t necessarily free themselves from financial burdens; they take on larger burdens.”
John Helliwell of the Canadian Institute for Advanced Research, and professor emeritus of economics at the University of British Columbia, says another reason people often underestimate their own wealth is because they tend to compare their own standards against those of others.
So rather than asking your boss for another pay raise, there may be an easier solution to boost your sense of wealth: Quit trying to keep up with the Joneses.