Connect with us

Money

How Much Does it Take to Be Wealthy in America?

Published

on

How Much Does it Take to Be Wealthy in America?

How Much Does it Take to Be Wealthy in America?

Is it possible to pin down an exact number on what it takes to be wealthy, or is wealth far more complex and nuanced than that?

The above graphic looks at data from the 2023 Modern Wealth Survey by Charles Schwab, which asks respondents what net worth is required to be considered wealthy in America.

Later, we look at data that partially contradicts those findings, showing that wealth is more than just a number for many of those same respondents.

Wealthy in America: A Closer Look

Overall, the net worth that Americans say that is needed to be “wealthy” in the United States is $2.2 million in 2023.

Here are the average wealth numbers indicated by respondents across 12 major U.S. cities, based on a survey of 1,000 people between 21 and 75:

RankCityNet Worth to Be "Wealthy"
Net Worth to Be "Financially Comfortable"
1San Francisco, CA$4.7M$1.7M
2Los Angeles & San Diego, CA$3.5M$1.5M
3New York, NY$3.3M$1.2M
4Seattle, WA$3.1M$1.0M
5Washington, D.C.$3.0M$1.0M
6Boston, MA$2.9M$932,000
7Denver, CO$2.5M$710,000
8Phoenix, AZ$2.4M$653,000
9Atlanta, GA$2.3M$729,000
10Chicago, IL$2.3M$817,000
11Dallas, TX$2.3M$820,000
12Houston, TX$2.1M$606,000

In San Francisco, respondents said they needed $4.7 million in net worth to be wealthy, the highest across all cities surveyed, and more than double the national average.

This figure dropped from last year, when it stood at $5.4 million. The vast majority of people in San Francisco say that inflation has had an impact on their finances, and over half say that living in the city impedes their ability to reach their financial goals, citing steep costs of living.

In Los Angeles and San Diego, it takes $3.5 million to be wealthy, the second-highest across cities surveyed. In New York, it takes $3.3 million in net worth to reach this target. It is home to over 345,000 millionaires, the highest worldwide.

Houston, where the cost of living is less than half of San Francisco, respondents said a net worth of $2.1 million is needed to be wealthy. The average salary is $67,000 in Houston, while in San Francisco it falls at $81,000.

The Wealth Paradox

Separately, the survey asked whether respondents “feel wealthy” themselves.

Overall, 48% of all respondents said they feel wealthy, and those people had an average net worth of $560,000. This is a considerable divergence from the $2.2 million benchmark they said was needed to be wealthy.

Here’s the breakdown for major cities, illustrating the paradox:

Percent of Americans Who Feel Wealthy

Millennials were most likely to feel wealthy, at 57% of respondents, while 40% of boomers felt wealthy, the lowest across generations surveyed.

Explaining the Divergence

When digging deeper, it becomes clear that wealth is not simply a number.

In fact, the survey indicates that many Americans place greater importance on non-monetary assets over monetary assets when they think of wealth.

For instance, 72% said having a fulfilling personal life was a better descriptor of wealth than working on a career, which was only chosen by 28% of respondents. Meanwhile, enjoying experiences (70%) was a better reflection of wealth compared to owning many nice things (30%).

Interestingly, there was a narrower margin in choosing between the importance of time (61%) over money (39%).

Beyond monetary figures, these findings illustrate the layers that influence what it means to feel financially healthy today, and how this affects an individual’s overall quality of life.

Click for Comments

Personal Finance

Mapped: Federal Tax Paid Per Capita Across Canada

We show which provinces and territories pay the most and least tax after adjusting for the number of tax filers in each jurisdiction.

Published

on

A Canadian map of federal tax paid per capita with the values for BC, Alberta, NWT, Ontario and Quebec as question marks

Published

on

The following content is sponsored by Fidelity Investments

Mapped: Federal Tax Paid Per Capita Across Canada

Which parts of Canada pay the most personal tax? In 2021, according to the latest available data, people in Ontario paid by far the greatest share: 42% of the total. Of course, Ontario is also the most populated province.

But if we look at which parts of the country paid the most and least taxes on a per capita basis, the picture looks different. In this graphic from Fidelity Investments, we show the amount paid per tax filer for each province and territory.

A Breakdown of Tax Per Person

We took the total personal federal tax paid in each province according to 2021 tax filing data from the Canada Revenue Agency. We then divided the total tax paid by the number of people filing taxes in the province. Below, we rank the provinces and territories from least to most taxes on this basis.

Province or TerritoryFederal Tax Paid Per Person
New Brunswick$4,186
Prince Edward Island$4,491
Nova Scotia$4,708
Manitoba$5,001
Newfoundland and Labrador$5,033
Quebec$5,352
Saskatchewan$5,596
Nunavut$6,314
British Columbia$6,828
Yukon$6,897
Ontario$6,969
Alberta$7,608
Northwest Territories$7,876
All of Canada$6,368

All of Canada is calculated as the total federal taxes paid in Canada divided by the total number of tax filers in Canada.

New Brunswick paid the least taxes on a per capita basis. Within the province, 13% of people worked in retail jobs, the highest proportion nationally. Retail positions in New Brunswick earned $34,000 annually on average. As a whole, 71% of people in New Brunswick earned less than $49,000 per year.

The Highest Taxes Per Capita

The Northwest Territories (NWT) paid the most taxes relative to the number of tax filers. Public administration workers made up nearly a quarter of tax filers, four times the national share of 6%. These workers, which include local, provincial, federal, and aboriginal government employees, had an average annual income of $120,000 in the NWT.

Additionally, the territory also had a relatively high proportion of people working in mining, who earned $221,000 a year on average.

However, it’s important to note that the NWT faces a high cost of living. On average, households in the capital city of Yellowknife paid 28% more for food and 47% more for shelter than the average Canadian household in 2021.

On a per person basis, Ontario paid the third highest taxes in Canada. The province had the highest proportion of finance and insurance workers, who earned $106,000 annually.

Reducing Your Taxes

Generally, a higher income leads to higher taxes. However, you can explore allowable deductions such as RRSP contributions to save more of your money.

Visual Capitalist Logo

Use Fidelity’s income tax calculator to quickly estimate your taxes.

Click for Comments

You may also like

Subscribe

Continue Reading

Subscribe

Popular