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Americans Think It Takes $2.2 Million To ‘Be Rich’ – Here’s How Much You Need To Invest To Get There

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A recent Charles Schwab survey of modern wealth found that Americans now believe they need to have an average net worth of $2.2 million to be considered “wealthy”.

That’s up from the magic number of $1.9 million in 2021, but still below what net worth was considered rich in 2018, 2019 and 2020, according to results from the investigation. Clearly, as economic situations have changed, Americans’ perceptions of wealth and money have also changed.

While some people may not want to make millions of dollars – and that’s completely normal – others may find that the closer they get to that number, the more possible it becomes for them to afford new opportunities and eventually achieve their lifestyle goals.

However, beyond just thinking about net worth, it’s important to consider how much savings you need to pay for what you think you’ll spend each year in retirement — and this article helps illustrate that logic. For context, future retirees who plan to live on $50,000 a year will need to save $1,250,000, using the 4% rule, to see them through the rest of their lives out of work. (Naturally, different variables like market volatility and cash reserve can affect this savings goal.)

Select wanted to see what it would take to reach that $2.2 million figure that Americans consider “wealthy”, so we calculated how much you’d have to invest monthly over 10, 20, 30, 40 and 50 years to get there .

Keep in mind that your net worth is defined as the total assets you own (money you have in bank accounts, investments, retirement accounts, etc., plus the value of any real estate ) minus the total liabilities you owe (debt, including student loans, credit card, your mortgage, etc.). Once you reach that $2.2 million threshold, your true net worth will depend more on your debts.

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Here’s how much to invest to be considered “rich”

How to start building wealth now

Robin Hood

On Robinhood’s secure site

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account or start investing

  • Costs

    Fees may vary depending on the investment vehicle selected. Trade without commission; regulatory transaction fees and trading activity fees may apply

  • Prime

    Robinhood will add 1 free share of stock to your brokerage account when you link your bank account and meet the terms of your promotion (you can keep the stock or sell it after 2 trading days)

  • Investment vehicles

  • Investment opportunities

    Stocks, ETFs, options trading, fractional shares, IPOs, plus some cryptocurrencies through Robinhood Crypto (depending on where you live)

  • Educational resources

tassels

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account, $5 minimum to start investing

  • Costs

    Fees may vary depending on the investment vehicle selected. Monthly plans include: Personal ($3 per month) and Family ($5 per month)

  • Prime

  • Investment vehicles

  • Investment opportunities

    Diversified ETFs including over 7,000 stocks and bonds

  • Educational resources

Another option is to work with robo-advisors, such as Wealthfront and Betterment, to help you determine which investments make the most sense based on personalized factors like your risk tolerance, time horizon, and overall financial goals. The best robo-advisors will also automatically rebalance your portfolio as you get closer to your goal target date. This way, you won’t have to worry about adjusting the allocations yourself.

wealth front

On the Wealthfront secure site

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts

  • Costs

    Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront’s annual management advisory fee is 0.25% of your account balance

  • Prime

  • Investment vehicles

  • Investment opportunities

    Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks

  • Educational resources

    Offers free financial planning for planning college, retirement and buying a home

Improvement

On Betterment’s secure site

  • Minimum deposit and balance

    Deposit and minimum balance requirements may vary depending on the investment vehicle selected. For Betterment Digital Investing, minimum balance of 0 USD; Premium investment requires a minimum balance of $100,000

  • Costs

    Fees may vary depending on the investment vehicle selected. For Betterment Digital Investing, 0.25% of your fund balance as an annual account fee; Premium Investing has an annual fee of 0.40%

  • Prime

    Up to one year of free management service with qualifying deposit within 45 days of signup. Valid only for new individual investment accounts with Betterment LLC

  • Investment vehicles

  • Investment opportunities

    Stocks, bonds, ETFs and cash

  • Educational resources

    Betterment RetireGuide™ helps users plan for retirement

At the end of the line

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.


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