Here’s How Much You Need To Invest To Be Wealthy

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A recent Charles Schwab Modern Wealth Survey found that Americans now believe they need to have an average net worth of $2.2 million in order to be considered “wealthy.”

This is an increase from the magic number of $1.9 million in 2021, but still falls short from what net worth was considered wealthy in 2018, 2019 and 2020, according to survey results. It’s clear that, as economic situations have changed, Americans’ perception of wealth and money has changed as well.

While some people may have no desire to make millions of dollars — and that’s totally okay — others may find that the closer they get to reaching that number, the more feasible it becomes for them to afford new opportunities and eventually reach their lifestyle goals.

Beyond just thinking of net worth, however, it’s important to consider just how much savings are required to afford what you think you’ll spend each year in retirement — and this article helps illustrate that logic. For context, future retirees who plan to live off $50,000 a year will need to save $1,250,000, using the 4% rule, to carry them through the rest of their nonworking lives. (Naturally, different variables like market volatility and one’s cash reserve may affect this savings goal.)

Select wanted to see what it would take to reach this $2.2 million number that Americans consider “wealthy,” so we calculated how much you’d have to invest monthly over the course of 10, 20, 30, 40 and 50 years to get there .

Keep in mind that your net worth is defined as the total assets that you own (the cash you’ve got in bank accounts, investments, retirement accounts, etc., as well as the value of any real estate) minus the total liabilities that you owe (debt, including student loans, credit card, your mortgage, etc.). Once you hit that $2.2 million portfolio mark, your true net worth will depend more on what your liabilities are.

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Here’s how much to invest to be considered ‘wealthy’

How to start building wealth now

Robin Hood

On Robinhood’s secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account or to start investing

  • fees

    Fees may vary depending on the investment vehicle selected. Commission-free trading; regulatory transaction fees and trading activity fees may apply

  • Bonuses

    Robinhood will add 1 share of free stock to your brokerage account when you link your bank account and fulfill the conditions in your promotion (you’ll be able to keep the stock or sell it after 2 trading days)

  • Investment vehicles

  • Investment options

    Stocks, ETFs, options trading, fractional shares, IPOs, plus certain cryptocurrencies through Robinhood Crypto (depending on where you live)

  • Educational resources

acorns

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account, $5 minimum to start investing

  • fees

    Fees may vary depending on the investment vehicle selected. Monthly plans include: Personal ($3 per month) and Family ($5 per month)

  • Bonuses

  • Investment vehicles

  • Investment options

    Diversified ETFs which include more than 7,000 stocks & bonds

  • Educational resources

Another option is to work with robo-advisors, such as Wealthfront and Betterment, to help you determine which investments make the most sense based on personalized factors such as your risk tolerance, time horizon and overall financial goals. The best robo-advisors will also automatically rebalance your portfolio as you get closer to the target date for your goals. That way, you won’t have to worry about adjusting the allocations yourself.

Wealthfront

On Wealthfront’s secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts

  • fees

    Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance

  • Bonuses

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks

  • Educational resources

    Offers free financial planning for college planning, retirement and homebuying

Betterment

On Betterment’s secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For Betterment Digital Investing, $0 minimum balance; Premium Investing requires a $100,000 minimum balance

  • fees

    Fees may vary depending on the investment vehicle selected. For Betterment Digital Investing, 0.25% of your fund balance as an annual account fee; Premium Investing has a 0.40% annual fee

  • Bonuses

    Up to one year of free management service with a qualifying deposit within 45 days of signup. Valid only for new individual investment accounts with Betterment LLC

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash

  • Educational resources

    Betterment RetireGuide™ helps users plan for retirement

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Publisher Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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