People need Bt50m-plus to feel wealthy: survey

The survey discovered that globally, only three in 20 individuals consider themselves wealthy and believe an average of US$1.76 million (Bt51.5 million) in disposable assets is needed to qualify for that status. 

The study was carried out online late last year on 5,007 people with a net disposable income of 1,000 pounds (Bt45,400) or equivalent in 13 territories across Asia, Europe, Latin America and the Middle East. It was aimed at getting a better insight into the issues that are having an impact on saving, investment and spending decisions.

These results were more informative when broken down by territory. In Singapore, the average figure quoted for people to feel wealthy was $2.9 million, followed by Dubai at $2.5 million and Hong Kong at $2.46 million. 

Given the high cost of living in these territories, it should not be of great surprise that feeling wealthy comes at such a high price. 

Latin American countries were in the middle, though curiously they featured above the Europeans. While the economies among Latin American countries differ, the one thing they have in common is a small middle class and a wide gulf between the rich and the poor. Since high earners tend to be very well off, it is likely that those interviewed would fit into that category and thus consider “wealth” to constitute a lot of money.

However, there’s no doubt that the perception of wealth is largely coloured by the cost of living in a given country and, as Deutsche Bank global strategist Sanjeev Sanyal said, Brazil has become even more expensive than many developed economics. And it’s not the worst: Australia is now the most expensive country followed by Japan, according to Deutsche Bank’s research. 

In the Skandia survey, Europeans reported relatively modest and lower-than-average requirements to consider themselves wealthy. The Italians, French and British came in ninth, 10th and 11th out of 13 nationalities. The relatively high percentage of the population that earns a middle-class income is likely behind these results. 

In line with this, the two places where people needed the least to be deemed wealthy were Germany and Austria. There the respondents said it would take just $900,000 and $1 million respectively to be considered well off. Also, up to 20 per cent of the Austrian and German respondents reported an above-average sentiment of being “wealthy”. However, the highest overall feeling of wealth was in Brazil, where more than 25 per cent of those surveyed said they felt affluent. 

The survey also asked the respondents how much wealth they needed to feel “happy”. Though the notion of happiness is difficult to quantify, 80 per cent of the 5,000 respondents gave it a go. Results showed that globally a person would need to earn at least $161,810 per year to be happy – that is 15 times the global average income for an individual. 

Not surprisingly, the results followed a similar trend to those quantifying wealth, showing the highest levels of aspired income to be in Dubai ($276,150), Singapore ($227,563) and Hong Kong ($197,702). The Europeans on average required a lot less to be satisfied, with Britain, France, Austria and Germany all in the bottom half of the list, though Italy was much higher than when defining wealth.

In some territories, women required more money than men to feel content. For instance, women in Hong Kong said they needed 13 per cent more ($207,924) per annum than the amounts quoted by men to be happy. In Italy, women wanted 11 per cent more ($187,036), while in Brazil the desired premium was 55 per cent ($192,929). 

 

Paul Gambles, managing partner of MBMG International, is a regular event speaker and is featured regularly on CNBC’s “Squawk Box” and on Money Channel’s “News at Ten”. Gambles’ regular MBMG updates can be found at www.mbmg-group.com/mbmg/blog and he can be contacted via [email protected].