An intriguing survey by Empower, a financial services firm, has revealed that the average American defines financial success as earning approximately $270,000 in salary or having a net worth of about $5.36 million. Financial experts believe these expectations are achievable, depending on factors like geographical location, lifestyle, and financial plans.
The survey, dubbed 'Secret to Success', questioned 2,203 adult US citizens. The data was then adjusted for nationwide representation. Rebecca Rickert, Empower's head of communications and consumer insights, notes a shift in success metrics among younger generations, particularly in terms of personal and financial growth.
The financial success bar is set higher by younger Americans. According to the survey, for Gen Z, an average salary of $587,797 and a net worth of about $9.47 million represent success. Millennials, on the other hand, view it as an average salary of $180,865 and a net worth close to $5.64 million. Certified financial planner John Bell indicates that these expectations are attainable, pointing out, however, that the unique financial circumstances and geographical location would affect an individual's ability to reach these goals.
The survey also measured the success expectations for older generations. Gen X participants considered a salary of $212,321 and a net worth of about $5.29 million successful, while baby boomers only required a net worth of $1.05 million and a salary of $99,874 to feel financially accomplished. Interestingly, the survey revealed that 59% measured success in terms of happiness against 27% who cited wealth.
Patrick Huey, with two decades of experience in the financial industry, and Bell both observe that societal attitudes towards money have shifted over the years. Instead of money being the end goal, it is seen as a means to achieve personal aspirations. Moreover, the survey identified well-being and leisure time as core components of financial success.
Despite facing financial obstacles, 58% of Americans remain optimistic about achieving financial prosperity in their lifetime. This sentiment is stronger among younger generations, with 71% of Gen Z and 70% of millennials feeling confident about their future financial status. According to Rickert, establishing financial resilience is paramount for this younger generation, such as proficiency in managing student debt, affording housing, and creating a safety net.
Navigating financial obstacles may require a defined financial plan tailored towards specific goals. Huey endorses writing a comprehensive plan and reviewing it biannually, advising his clients to do so especially before committing to major financial decisions. Concomitantly, Bell highlights the importance of setting short-term goals and understanding the potential sacrifices involved in achieving these objectives.
While financial success might mean different things to different people, this survey by Empower has provided insight into American sentiments concerning prosperity, indicating that high salary, a substantial net worth, and the willingness to take risks are all integral to financial success. Lastly, for individuals who aren't sure about their financial direction, consulting a financial expert might prove beneficial.