How much does it take to feel wealthy these days? For many millionaires, it's about $7.5 million, according to a survey by Fidelity Investments.
"Wealth is relative, and to some extent, the more you have the more you realize how much more you need," Sanjiv Mirchandani, president of National Financial, said in an interview before the survey's release Monday. National Financial is a Fidelity subsidiary that provides clearing and custody services to broker-dealers.
The more than 1,000 households surveyed had an average of $3.5 million of investable assets. About 42% said they did not feel wealthy; they said they would need about $7.5 million to feel rich. The 58% of respondents who said they did feel wealthy were younger on average and have a greater number of remaining years in the work force, Mirchandani said.
A 65-year-old millionaire is "looking at potentially the loss of a paycheck as they retire, and 30 years in retirement, with inflation on the horizon," Mirchandani said. "So they kind of go, 'Well, $3.5 million, $4 million, isn't what I thought it would be; I'd like to have more.' "
About 5.5 million U.S. households (about 5% of the population) have assets of at least $1 million. Millionaires control 56% of the country's wealth, according to Fidelity, which is the second-largest U.S. mutual fund company after Vanguard Group Inc. Household wealth was $56.8 trillion at the end of 2010, according to the Federal Reserve.
The survey found millionaires' outlook for the future is the most positive it has been in at least four years.
"They're beginning to feel that perhaps we're turning the corner on a more consistent basis," said George Walper Jr., president of Spectrem Group, a Chicago consulting firm that tracks attitudes among millionaires.
About 56% of registered investment advisers, who manage or advise individual investors' money, are bullish on the stock market's prospects over the next six months, according to a January survey by Charles Schwab Corp. Of the advisers surveyed, 23% said they were providing reassurance to their clients about reaching their investment goals, down from 49% in January 2009.
About 83% of millionaires surveyed by Fidelity said the financial crisis didn't shake their confidence in investing, and a majority said a primary goal for their money was preservation of capital, rather than growth. "They're still fairly conservative in terms of what they'll buy," Mirchandani said.
Millionaires in Fidelity's survey planned to give $38,000 on average to charity in 2010, up from $36,000 in 2009.
The asset management firm hired Northstar Research Partners of New York to do an online survey in October of 1,011 households with at least $1 million of investable assets.
