The amount of money you need to consider yourself “financially comfortable” is certainly a subjective number. However, a new report by financial services company Charles Schwab aims to quantify this amount by surveying people living in various regions of the United States.
In their Modern Wealth Survey for 2022, Schwab asked 1,000 American participants aged 21 to 75 a variety of questions regarding wealth, values at work, and personal values regarding major life decisions.
The survey asked participants what level of personal net worth a person in their area would need to have to be considered “financially comfortable.” The survey then asked participants what the amount was to be considered “wealthy.”
On average, those surveyed said you would need a personal net worth of $774,000 to be financially comfortable and $2.2 million to be considered wealthy. Not surprisingly, those numbers spiked significantly when the survey focused only on respondents from San Francisco.
San Francisco survey participants said you would need an average net worth over double that of the rest of the nation to be considered financially comfortable or wealthy. They believed you would need an average net worth of $1.7 million to be financially comfortable and $5.1 million to be wealthy.
San Francisco’s high cost of living
Of course, a region’s cost of living has a huge impact regarding how much money equates to being financially comfortable or wealthy. It’s no secret that San Francisco has some of the highest costs in the nation. So, it makes sense residents here have a completely different perspective on what it means to be wealthy.
Rents in San Francisco consistently rank among the highest in the U.S. According to rental platform Zumper, the median rent for a one-bedroom unit is a staggering $3,000 per month, making San Francisco the second most-expensive major rental market in the country. New York City ranks number one, with median one-bedroom rent coming in at $3,600 per month.
According to Zillow, the typical U.S. home value is $349,800 (as of May 2022). Compare that to San Francisco’s typical home value of $1,633,651, and you can understand why the area’s residents say you need to be a multi-millionaire to be financially comfortable.
The high cost of housing isn’t the only drain on San Franciscan’s wallets. Inflation in food, transportation, clothing, and medical care have all hit the area hard as well. The latest Consumer Price Index (CPI) report for San Francisco reveals energy prices have soared over 31 percent in the last year and food prices have jumped 10 percent.
What do you think about Schwab’s wealth survey?
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