The Evolving Definition of Wealth in America
In a world where the cost of living continues to rise due to inflation and economic fluctuations, the perception of wealth is shifting dramatically. A recent report from Charles Schwab reveals that Americans now believe it takes an average of $2.3 million to be considered wealthy. This figure marks a notable increase from past years, reflecting the changing landscape of financial aspirations across generations.
The survey, conducted between April 24 and May 23, 2025, involved 2,200 adults aged 21 to 75, providing a comprehensive view of how different age groups perceive financial success. Interestingly, while the average threshold for wealth has dropped slightly from $2.5 million in 2024, it remains significantly higher than the $1.9 million reported in 2021. Respondents also expressed a feeling that the bar for achieving wealth is continually rising, with 63% stating that it feels more challenging to attain wealth today than it did the previous year. Factors such as inflation, a struggling economy, and increased taxation contribute to this sentiment.
Brad Clark, the founder and CEO of Solomon Financial, emphasizes that while there are numerous millionaires in the U.S., many of them include their homes in their asset calculations, which often leaves their investable assets below the million-dollar mark. This phenomenon helps explain why the average American now considers $2.3 million to be the new benchmark for wealth—an amount that can seem dauntingly out of reach for many.
However, the definition of wealth varies significantly across generations. The Charles Schwab survey indicates that Gen Z sets a lower threshold for wealth at $1.7 million, with a financial comfort level at $329,000. In contrast, millennials and Gen Xers estimate the wealth threshold at around $2.1 million, while baby boomers raise the bar to $2.8 million. This generational divide highlights differing priorities and definitions of financial success, with older generations often equating wealth with security through property and pensions, while younger individuals prioritize experiences and lifestyle choices.
Markus Schneider, an economics professor at the University of Denver, notes that millennials and Gen Z are understandably pessimistic about home ownership, a traditional pathway to building wealth. With soaring mortgage rates and home prices, younger generations face significant barriers that influence their perspectives on wealth and security.
Despite the stark differences in financial aspirations, experts agree that true wealth transcends monetary value. The Charles Schwab report reveals that many individuals associate wealth with happiness, health, quality relationships, personal achievements, and time freedom. Clark points out that defining wealth solely in terms of financial figures can lead to disappointment, as even the ultra-wealthy often struggle with unhappiness. Instead, he argues that true wealth lies in the ability to leverage assets to enhance one’s life and contribute positively to those around them.
As we navigate an increasingly complex economic landscape, the definition of wealth continues to evolve. It is essential to recognize that while financial security remains a priority, the pursuit of happiness and fulfillment plays a crucial role in how we define our own wealth. In this new era, achieving a sense of purpose and well-being may be just as important as reaching a specific financial milestone.