Fidelity released its fourth annual survey on millionaires Fidelity Millionaire Outlook. The results made for interesting if unsurprising reading. Some key findings:
1. the outlook of millionaire households is the most optimistic since 2006. Given the intervening economic events it would be very surprising if the survey had produced any other result;
2. four out of ten millionaires do not feel wealthy. Again, this should not surprise anyone. In most developed economies, being a marginal millionaire does not make you wealthy enough that your standard of living cannot be adversely affected by rising taxation on incomes, rising property taxes, rising inflation and the potential for economic adversity to impact your business, your job and your investments. Add in the common perception that wealth is relative (usually to others) and the very substantial incremental costs of expanding living costs if you want to move "up market", and it is easy to understand why having USD1-2 million does not make you feel wealthy;
3. four out of ten millionaires are concerned about maintaining their lifestyle in retirement. Given the comments made in #2 above, this is understandable;
4. the average age of the millionaires surveyed was 56. For most of us, it takes time to accumulate wealth.
Fidelity's survey reinforces some of my long held beliefs:
A. preventing lifestyle expansion is essential. If you want to (i) retire early and (ii) feel comfortably off, living well below your means is critical - relying on rising income and/or investments to get you there will not work as often as people would like to believe. The more you spend the more you need and the greater the risk of being trapped into working for ever;
B. comparatives matter. If you want to feel wealthier, learn to enjoy a less expensive lifestyle. Move to a less affluent neighbourhood, hang out with less affluent people and keep reminding yourself that 99% of the world's population gets by with a lot less.