Everybody sees millionaires as wealthy, except for millionaires themselves, a new study suggests.
Only 8% of investors with $1 million consider themselves wealthy, a recent report from Ameriprise Financial found. Instead, 60% categorized themselves as upper middle class, and a notable 31% considered themselves middle class. The study revealed wealth is more than just hitting a specific dollar number or lifestyle. Rather, it's a mindset and a feeling of security.
"I think that people of wealth tend to be cautious and they tend to be open minded, and they tend to be intentional," said Kimberly Maez, a private wealth adviser at Ameriprise Financial. "Whereas it's not necessarily some of the things we always think it is. It's a little bit more behavioral mindset focused."
The study surveyed over 3,000 Americans between the ages of 27 and 77, roughly 600 of whom were millionaires and revealed insights in their conception of wealth.
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According to the study, 85% of millionaires believed that wealth meant "a sense of financial security." Meanwhile, 66% thought of wealth as the ability to provide for themselves and their families, while 58% associated it with the freedom to do what they wanted.
Maez noted that the rich’s conception of wealth was not necessarily grounded in luxury.
"It's not like driving supercars necessarily," she said. "It's just being more cautious and careful in trying to ensure that they are protecting what they've got because people of wealth also have a little bit of fear. They know how hard it's been to build it and they know it can go away quickly."
Still, the study revealed a stark contrast between investors with more than $1 million and those with less.
Of the millionaires surveyed, 62% of them said their top financial priority was "protecting accumulated wealth," 43% said "saving for retirement," and 32% said "managing market volatility."
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Meanwhile, the study found that 49% of investors with less than $1 million in assets prioritized "saving for retirement," and 42% said "managing day-to-day living expenses." The study also found that 35% said "increasing income" and "paying down debt" were big priorities.
Travis Sholin, financial adviser at Keystone Financial Services, pointed out that regardless of financial status, saving for retirement remains a priority for both the wealthy and the less so. He observed that "there is an emotional scarcity mindset that is inherent in all people" and that $1 million no longer has the same value due to inflation and rising costs of living.