These days, fewer people feel financially comfortable, let alone rich.
The average household’s net worth has soared in recent years, rising 37% between 2019 and 2022, according to the survey of consumer finances from the Federal Reserve.
Yet, even as households became wealthier, inflation and instability have left more people in the bucket of so-called HENRYs — short for “high earners, not rich yet.”
Only 14% of Americans would consider themselves wealthy, a recent Edelman Financial Engines report found, and the bar is only getting increasingly out of reach.
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Despite higher-than-average salaries, those HENRYs have struggled with a higher cost of living and a growing savings shortfall.
A prolonged period of high inflation and instability has chipped away at most consumers’ buying power and confidence. More than half of Americans earning more than $100,000 a year say they live paycheck to paycheck.
“Market volatility over the past two years has taken a financial and emotional toll on individuals and families regardless of wealth,” said Kelly O’Donnell, chief client officer at Edelman Financial Engines.
What would it take to feel rich?
In 2023, 67% of Americans said they would need at least $1 million to feel rich, up from 57% a year earlier, the Edelman Financial Engines report found. Roughly 20% said it would take $5 million or more.
“That million dollars is just not getting you as much,” O’Donnell said.
To bridge the gap, more people rely on credit cards to cover day-to-day expenses. In the past year, credit card debt spiked to an all-time high, while the personal savings rate fell.
When it comes to building wealth, most consumers say high-cost debt is now their biggest obstacle, according to the Edelman Financial Engines report.
However, feeling financially secure is often less about how much money you have…
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