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Rich Americans say it’s getting harder to get richer

The housing market helps fuel many wealthy Americans’ pessimistic feelings about their future.
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  • Two-thirds of Americans with investable assets over $500,000 don’t feel wealthy, according to a new survey.
  • Some people with more than $10 million in assets are also feeling the effects.
  • Many fear their investments will lose value due to inflation and the climate crisis.

Even the richest people in America don’t feel too rich these days, and some say that’s because it’s increasingly difficult to increase their reserves.

A new investigation by an insurance company Chub asked 800 wealthy North Americans, all of whom have investable assets of at least $500,000, how they view their wealth and what keeps them up at night. The survey, conducted in September and October, found that more than two-thirds of respondents don’t consider themselves actually wealthy, including some with more than $10 million in investable assets.

About two in three respondents indicated that creating wealth is much more difficult than ever. The reasons for this include concerns about inflation, stock market volatility, fear of losing a job, and the climate crisis damaging or harming home values.

Rich Americans don’t feel rich

Many wealthy Americans, some of whom have saved millions, still worry about their financial future, according to the Chubb survey. Even though they are doing much better than most Americans, the majority of wealthy Americans surveyed are worried about economic uncertainty and the loss of value of their investments.

80% of those surveyed fear that a loss of value of their investments will pose a risk to their assets and lifestyle. About 74% said the impact of inflation is another risk, given that inflation levels are still above average for house prices, dining out and concerts.

To be sure, the economy is on track to achieve what economists call a “soft landing.” Inflation is at 3.1% year-over-year, a bit above the Fed’s 2% target, but down from this year’s peak of 6.4% in January. The Fed is expected to cut interest rates three times next year, and with unemployment levels between 3% and 4% in 2023, the economy is outperforming many economists’ expectations.

More than two-thirds of those surveyed fear the climate crisis and weather events could damage their property. More than three-quarters of those surveyed believe extreme weather from climate change remains the biggest risk to their home. They are not wrong here; Weather events are increasing and causing greater property damage and an increase in insurance premiums.

Other risks highlighted by respondents include being a victim of financial fraud, competitiveness of the national economy, loss of employment and decline in corporate profits.

Still, many wealthy Americans plan to spend more on their homes next year, as well as on travel, education and collections. About 73% plan to spend more on real estate next year, while 65% plan to spend more on entertainment.

The middle class is in even more difficulty

Even as America’s richest worry about their wealth, they remain far better off than the middle class.

A few HENRY – high earners, not yet rich – have previously told BI they are putting off buying a home or starting a family, citing inflation and long-term economic uncertainty. Additionally, some wealthy Americans live “financial dysmorphia“, believing that they don’t have enough, no matter how much they have. Among millennials, a survey found that $525,000 is the annual salary they need to be happy.

Much lessWealthy Americans have been hit harder by an inaccessible housing market and rising costs. According to recent Fed data, the richest 0.1% of Americans have gained $1.3 trillion in wealth since the start of 2023, compared to $330 billion for the poorest 50%. Additionally, the number of households with net assets of more than $1 million increased by 63% between 2019 and 2022.

Experts previously told Business Insider that wealth creation is made more difficult by the increasing difficulties of buying a home, as well as inflation and high borrowing costs. A Fannie Mae Investigation of December found that 86% of Americans said it was not a good time to buy a home with 30-year fixed mortgage rates around 7.5%.

Wealth among Americans as a whole has skyrocketed during the pandemic. The net worth of the average American increased 37% between 2019 and 2022, according to the Survey of Consumer Finances, with the median net worth jumping to $192,000 when accounting for inflation.

Net worth gains benefited the richest Americans the most, as those in the bottom 20th percentile saw only a 24% increase, compared to a 69% increase for those in the 80th and 90th percentiles. This is partly because people in the bottom 20th percentile — with a median net worth of $14,000 in 2022 — likely don’t own big assets like homes.

Are you a higher-income American worried about the future? Contact this journalist at nsheidlower@businessinsider.com.

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