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Does One Million Dollars Make You Wealthy?

One million dollars may seem like a lot of money, but is it enough to make you wealthy? The answer is not so simple, because wealth is a subjective term that can have different meanings for different people. In this blog post, we will at net worth percentiles by age and see how one million dollars stacks up. 

One of the most reliable sources of data on net worth and income in the US is the Survey of Consumer Finances, conducted by the Federal Reserve every three years. The latest survey, with data from 2022, was recently released and analyzed by the website DQYDJ. The table below shows net worth percentiles by age, based on the survey results:

So where does one million dollars stack up? It depends on how old you are and what you define as wealthy. Personally, I think being in the top 5-10% of your age cohort puts you in the wealthy category.  By that definition, one million dollars would make you wealthy if you are under 40 years old. But if you are between 55 and 70 years old, one million dollars would not even put you in the top 25%!

Regardless of how you define wealth, it is important to remember that money is not the only factor that contributes to your happiness and well-being. According to a Schwab survey on wealth, people more often describe wealth as enjoying experiences, relationships with loved ones, and being in good health than maximizing earnings or having a lot of money. 

Therefore, instead of focusing on whether having a million dollars makes you wealthy, you may want to focus on how much money you need to achieve your financial goals and live comfortably according to your values and preferences. Wealth is often as much a state of mind and living as it is a number. 

Scott Caufield CFA, CPA