US Markets
Friday, October 13th, 2023 6:33 pm EDT
Key Points
- Americans’ Perception of Wealth: A recent LendingTree survey reveals that a majority of Americans (nearly 60%) believe they will never become wealthy, and only 20% currently consider themselves wealthy. People’s definitions of wealth often go beyond financial aspects, with many valuing qualities such as financial security, comfort, and pursuing passions.
- Real Estate as a Wealth-Building Tool: Real estate is considered the most popular means of building wealth, with 45% of respondents naming it as the key wealth-building method. The survey found that real estate was the top choice for wealth accumulation across generations, and baby boomers, in particular, were more likely to invest in real estate. However, the emphasis on real estate as a wealth-building tool is in contrast to the fact that owning property itself is not a primary factor in how people perceive their wealth.
- Optimism Among Younger Generations: While 41% of Americans overall believe they will never become wealthy, younger generations are more optimistic, with nearly 70% of Gen Z and 54% of millennials expressing confidence in their future wealth. They also have more faith in the stock market as a wealth-building avenue, possibly because they have more time to benefit from market returns. Younger Americans recognize the value of time as a wealth-building asset, even though they may have lower income and less financial experience than older generations.
The article discusses Americans’ perceptions of wealth and their attitudes toward achieving it. A recent survey conducted by LendingTree reveals that nearly 60% of Americans believe they will never be wealthy, and only 20% currently feel wealthy. Interestingly, wealth, for most respondents, is defined more by financial security and comfort than by specific financial milestones like a six-figure salary or a million-dollar net worth.
The survey also found that real estate is considered the key to building wealth by 45% of respondents, making it the most popular choice for wealth-building. The stock market was the second-most popular choice at 32%. Baby boomers, in particular, were more likely to name real estate as crucial for building wealth, and they were also the generation most likely to invest in real estate.
Despite the emphasis on real estate as a wealth-building tool, the survey highlights an interesting contradiction: owning property itself isn’t the primary factor that makes people feel wealthy. Instead, Americans generally define wealth as being able to live comfortably without financial concerns (56%) or achieving financial security (45%). Only 33% of respondents believe that owning a home contributes to wealth, and just 14% believe that owning real estate outside of one’s primary residence does so.
The survey also reveals that, to many Americans, wealth is associated with a specific income level. Approximately one in three Americans believes that making at least $100,000 a year is necessary to be considered wealthy. Among those earning $100,000 or more, 31% think you need to make at least five times that amount to be considered wealthy.
There is some variation in optimism about future wealth, with younger generations being more hopeful. Nearly 70% of Gen Z and 54% of millennials believe they will be wealthy in their lifetimes. Younger generations also show more faith in the stock market as a means to build wealth. This optimism may be partly attributed to the understanding that they have more time to benefit from market returns, making time a valuable asset in wealth-building.
For full original article on CNBC, please click here: https://www.cnbc.com/2023/10/13/americans-say-this-is-the-best-way-to-build-wealth.html
