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It takes $10 million to be wealthy in 2007, research reveals

A new report published today by Barclays Wealth, entitled Insights: The True Value of Wealth, reveals that more than a third (35 per cent) of respondents believe individuals need to have assets of at least $10 million (£5 million) to be considered wealthy. “This is the perceived level at which people believe they are truly wealthy as it gives them influence within their community and a greater sense of control over their own destiny,” said Gerard Aquilina, Head of International Private Banking at Barclays Wealth. “Being wealthy is about much more than what you can buy. Our research shows that wealthy individuals want to pursue personal goals such as philanthropic causes and influence change within their community.” Having liquid assets of $10 million (excluding one’s home) also gives people a sense of security and makes them feel protected from the hazards of the world, the report shows. Having this buffer means people with assets of at least $10 million act and enjoy their wealth differently from those whose assets fall below this threshold, according to the report. This level of wealth elevates their status so they behave more like people with assets of US$50m, than people with US$5m, the report reveals. A million dollars isn’t what it used to be The term “millionaire” – once almost a gold standard of wealth – has lost its cachet in a world that is experiencing a wealth boom. In the UK alone, there are more than 400,000 households with financial wealth in excess of US$1m and this figure will more than double to 940,000 households by 2016, according to Barclays Wealth’s research**. There has also been a dramatic rise in the number of billionaires around the globe who have earned their wealth through entrepreneurial endeavours. Even though more people are acquiring wealth, there has been an increase in the cost of goods and services that people want such as concierges, butlers and travel services together with commitments such as private school fees and health insurance. This is influencing the level of assets that people think they need to sustain their lifestyles. Wealth is more than money The report also shows that wealth is about more than simply money; it is about having a better quality of life. Across the globe, more than half of respondents say that wealth has given them more leisure time. Those in Hong Kong (81 per cent), France and Switzerland (each 79 per cent) are most likely to say that their wealth has allowed them more time for leisure pursuits. Wealth has also had a positive impact on people’s well-being with the majority of respondents saying it has increased their happiness. Europe scores highest, with 87 per cent of people living in Portugal and Italy, and 85 per cent of those in Spain, reporting a greater sense of happiness as a result of their wealth. Helping charitable organisations is particularly important to wealthier individuals. Support for charitable causes has long been part and parcel of being wealthy, and the report suggests this is strongest among the most affluent sections of society. When asked what proportion of their estate they planned to leave to charitable causes, a quarter (26 per cent) of respondents with assets under US$1m said that they planned to leave more than 10 per cent of their estate to charitable causes. This rose to more than one-third (37 per cent) for those respondents with wealth in excess of US$3m – each of whom would therefore be leaving a minimum of $300,000 to charity. The report is a global survey of 790 wealthy individuals[1], produced in partnership with the EIU that examines how wealthy individuals perceive and value wealth. It also considers the revolution in the luxury goods and services market as companies adapt their offerings to meet the demands of the wealthy. The report includes comments from a panel of experts drawn from academia, industry and financial circles who provide unique insights. The wealth treadmill Interestingly, the report shows that many high-net worth individuals do not feel that they are truly wealthy because they compare themselves with people who have more money than them. This attitude is placing many people on a wealth treadmill, as they try to catch-up to their more prosperous peers. Some 69 per cent of those surveyed with assets of less than US$1m do not believe that they are wealthy. That compares with less than a quarter (22 per cent) of those with assets of more than US$3m. “People often tend to think about wealth in terms of assets and money,” says Mr Aquilina. “But being wealthy is not just about the money. There are many other dimensions. For some, it can be political power or influence, while for others it is about their role in the community. Certainly status and freedom are important. But it goes beyond a monetary definition; it is a state of mind.” - ENDS -
[1] With investable assets in excess of £100,000 (US$200,000)