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Redefining "Wealthy"


Investors are redefining wealth so that it is less about having a certain amount of money and, instead, means they do not have to worry about financial constraints, according to a new survey.

Investors are redefining wealth so that it means they do not have to worry about financial constraints, according to a new survey.

The UBS Wealth Management Americas UBS Investor Watch asked over 4,000 people about how they view wealth and found that 69% of millionaires don’t consider themselves wealthy even though they are confident they can achieve their financial goals.

The investors surveyed were at least 25 years old, have at least $250,000 in investable assets and 40% were women. Half of the respondents have at least $4 million in investable assets.

“Investors are telling us that wealth isn’t just about having a certain amount of money,” according to the report. “The majority of investors define wealth as having no financial constraints on what they do.”

However, when asked to assign a dollar amount to being wealthy, the investors in UBS’ survey said it would take $5 million. While investors with $5 million or more are twice as likely to feel wealth as investors with less than $5 million in assets, both groups are almost equally confident in their abilities to achieve financial goals.

Even with all that money, these investors like to have a security blanket, according to the report. In particular, they maintain an average of 20% of their assets in cash and more than half expect to keep that same level for the next year.

“Holding a significant amount of cash seems to give investors confidence to invest,” according to the report. “As we noted last quarter, investors aren’t quick to forget the significant losses they endured in 2008. Therefore, it appears that having significant cash reserves enables investors to feel comfortable investing large portions of their remaining assets in equities.”

The two top concerns of the investor respondents are long-term care and the finances of children and grandchildren. More than a third (36%) of respondents said they are not prepared for long-term care planning. Meanwhile just 2% are not prepared when it comes to retirement planning.

Younger investors are more concerned than older investors about health care costs in retirement and affording long-term care, even though these issues are still decades away, according to the report.

“They are not any more concerned than their older counterparts regarding covering their medical expenses in the next five years,” according to the report. “But they are significantly more concerned about affording medical expenses in retirement and how expensive long-term care costs could be. In fact, the only related area where older investors are more worried is potential cuts/changes to Medicare.”

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