If you're a Millennial, then you may remember the movie "Blank Check" from your childhood. Essentially, the cinematic masterpiece was about a kid who obtains a blank check and through a series of serendipitous events, cashes it in for $1 million; he then proceeds to buy himself everything from a mansion to a water slide.
While the movie came out in 1994 – when $1 million was worth more – it is still a testament to a belief many hold that $1 million is when someone crosses over from wealth to riches. However, according to a recently published report, many Americans' perception of wealth is changing. Fidelity Investments, which manages over $1 trillion assets, asked millionaires if they feel wealthy. A whopping 42 percent said they did not, in fact, view themselves that way.
The survey of 1,000 millionaire households, titled the "Millionaire Outlook," found the investment asset level needed to begin to feel wealthy is $7.5 million; that figure serves as a far cry from the median household income in the U.S. in 2009 of $49,777. Of the 58 percent of survey respondents who said they feel wealthy, they affirmed they began to feel that way at $1.75 million in investable assets.
The survey illustrates that there is no exact cutoff for when a person feels wealthy, said Fidelity's institutional wealth services president, Michael Durbin. "Our survey reinforces that the feeling of wealth is relative, based on factors such as the current market environment, a person's age, lifestyle and so on," Durbin said in a statement. "Regardless of what the market does, these factors are likely to change and, therefore, millionaires will continue to reassess what it really means to feel wealthy."
The survey also found that as a whole, millionaires are becoming more positive on the economic outlook for 2011, especially when compared to the past few years. The Fidelity survey used a scale where +100 represents the most favorable outlook, zero signifies a neutral outlook and -100 shows the most negative outlook, and found that millionaires' view on the current state of the U.S. economy remains -54, or "very weak."
Nonetheless, -54 is up significantly from the -91 recorded in 2009 and when asked how they feel the U.S. economy will fare by the fourth quarter of 2011, millionaires are decidedly more optimistic at +37. "Although millionaires are inherently optimistic, given their current views of the economy, we were surprised to see millionaires so optimistic about the future," Durbin asserted.
Many analysts contend the survey is an important indicator of future economic growth: In 2009, millionaires polled by Fidelity said they were negative on the economy at the time, but they projected it to begin to improve by early 2010 – which is exactly what occurred. Durbin averred: "Millionaires' outlook could be seen as a leading indicator of the direction of the economy, especially since the last time we conducted this survey in early 2009, they forecasted improvement in all aspects of the U.S. economy at the beginning of 2010."
The millionaires polled said they were confident in a sustained economy recovery by the end of 2011 because of business investment, which logged a +48 average score. Manufacturers have helped drive the U.S. economic recovery and according to a recently published report from the Institute of Supply Management, manufacturers recorded their strongest performance in February 2011 since May 2004, driven by the surge in business investment.
If you're a millionaire or you'd like to be one, the survey on the one hand shows an improving economy could facilitate your growth, but on the other hand that $1 million blank check you were hoping for may not be enough to satisfy your champagne wishes and caviar dreams.