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Friday, Feb 23, 2024

The Number

According to survey results for the 2018 Modern Wealth Index from Charles Schwab Corp., people in Los Angeles think it takes a net worth of $2.8 million to be considered “wealthy.” However, more than half of Angeleno respondents, or 58 percent, live paycheck to paycheck and only 25 percent have a written financial plan. By comparison, the national average for wealth consideration was $2.4 million. “There are many factors – home prices, proximity to and knowledge of others’ net worth, experience with financial planning and what kind of number to strive for – that figure into the consideration of wealth,” said Casey Mervine, senior financial consultant at Schwab’s Torrance office. About 500 people participated in the survey in L.A. and Orange counties. Participants received feedback on how well they manage their money and investments. When the survey asked for descriptions of a wealthy lifestyle, most of the top indicators had nothing to do with money. The top characteristic was “living stress free/peace of mind,” cited by 30 percent of respondents. The second factor essentially defined wealth: “Being able to afford anything I want,” cited by 18 percent. The third was “loving relationships with my family and friends” at 16 percent. “Wealth is often thought of as a sum of money that most of us don’t have,” Mervine said. “But in the modern world, wealth means the ability to pursue passions. … Many people don’t even want to talk about money; they talk about experiences.” Among those who scored high on the index, Mervine said “there’s a consistent theme that they’re planners.” For those without a formal financial plan, 43 percent say it’s because they don’t think they have enough money. But “the idea that financial planning and wealth management are just for millionaires is one of the biggest misconceptions,” Mervine said. – Joel Russell

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