The net worth required to be considered wealthy in the US has reverted back to near pre-pandemic levels of $2.2mn, as inflation weighs on household finances and the rising cost of borrowing money puts pressure on prospective homebuyers.
The 2022 rise followed a stark drop in last year’s figure, which fell to $1.9mn in 2021 from $2.4mn before the coronavirus pandemic in 2020, according to a quarterly survey by brokerage Charles Schwab.
The decline in 2021 was the largest drop since the brokerage began collecting data in 2018. The fall was attributed to the pandemic, which caused American households to re-evaluate their expenses, as well as their values and how much money they considered to be sufficient.
In 2021, the net worth Americans said was required to be “financially comfortable” slid to a record low of $624,000, less than half of what was said to be required in 2018.
That increased in 2022, as respondents said that they would be financially comfortable with $774,000, more than 10 times the median income of American households, according to estimates by Seeking Alpha.
According to the Schwab survey, Americans have become less focused on money, despite the rise in expectations for their finances. Seventy-three per cent of those surveyed said their personal values guide their life decisions more today than they did two years ago. The percentage was highest among youngest respondents, millennials and members of Gen Z.
