There was a time when someone earning a six-figure salary was said to be doing well. Is that the case today?
Towards the end of 2010, in a survey by WSL/Strategic Retail, we learned that 18% of American households earning between $100,000 and $150,000 said they could only afford the basics. Another 10% in that salary range reported that sometimes they couldn’t even meet their obligations.
The conclusion of the survey identified a magic number—$150,000. This was the level with which the vast majority of consumers (88%) said they could buy what they need while still being able to afford extra items and have some savings.
A more recent study by Pew Research Center puts the $150,000 figure at a higher standard of living than just being able to meet basic needs and afford a few extras. According to Pew, $150,000 earns a family of four the status of “rich”. This is geographical; Northeast and suburban respondents upped that amount to $200,000 while their rural counterparts said that a family making more than $125,000 could be considered wealthy.
Whether the income level is $125,000, $150,000 or $200,000 doesn’t really matter. Incomes this high are out of reach for the vast majority of Americans. In fact, according the Census Bureau’s September 2012 report, annual household income has fallen for the fourth straight year to an inflation-adjusted $50,054.
Let’s assume for a moment the majority of your clients earn more than $150,000. Do they all feel rich? Many probably do not, particularly if they are among 29% of Americans underwater on their real estate.
In fact, that rich feeling is fairly elusive. Many millionaires don’t even feel rich.
According to Fidelity Investments’ latest report on millionaires’ attitudes towards investing, 26%of millionaire respondents said they did not actually feel rich, and that they would need an average of $5 million of investable assets to begin to feel wealthy.
Politicians, economists, sociologists and even our brethren in the financial services industry continue to confuse comfort and net worth, and perception and reality. The fact of the matter is that the words “wealthy” and “rich” more aptly describe an emotional state than a statement of net worth.
 The Week, Real estate crisis: Americans Underwater 12.2.11