What Does It Take to Be Wealthy?

If you were to ask people for their personal definitions of “wealth,” you’d probably get a different answer from just about everyone. You might think “having lots of money” would be the standard definition, but according to a survey for the Modern Wealth Index from Charles Schwab, only 11% gave that answer.

Instead, people said “living stress‐free and having peace of mind” was how they viewed the concept of “wealth.” They brought up “loving relationships with family and friends” and “enjoying life’s experiences” as other indicators of wealth. When asked what makes a rich daily life, the most often cited answers were “spending time with family” and “taking time for myself.” Owning a home was another common answer.

But let’s face it: all of these things can be difficult to achieve without having a good amount of money saved up. So how much money is needed to be financially comfortable today in America according to the survey? That depends on which generation was answering the question.

Millennials said one needs $1.3 million to be comfortable and $2 million to be wealthy. For Gen Xers, $1.4 million is comfortable and $2.6 million is wealthy. And baby boomers? They say that comfort can be had at $1.6 million, while wealth is reached at $2.7 million.

Are any of these numbers accurate? It really depends on what you’re used to. Someone making less than $100,000 annually would probably feel pretty comfortable saving less than $1 million, while someone who’s making a couple million per year would likely say they’d need an amount that’s significantly higher.

Either way, the survey stressed that people who have a written financial plan tend to feel more stable and be more on top of their daily finances. Planning—whether it’s an exercise plan, a vacation plan, or a financial plan—is key to achieving your goals. The top performers on the Schwab Wealth Index had one common characteristic: they were all diligent planners.

So while money can’t buy happiness, it can buy you more options in life, which can lead to a lower level of stress. The real value of money is that it allows you greater opportunity to live the way you want. To do that, you’ve got to take control and manage your future.

So what’s your strategy?