A household with $1.2M in assets does not belong to the same group as a household with $20M in assets.
Or at least it should be. Many people with $1.2M cannot go a few months without a pay cheque because it's all locked in a house and a retirement fund -- make sure you're not one of them. An emergency fund is the best way, but I also recommend having an open HELOC. They're a lot easier to get when you have a job, and you don't have to draw on them until you have an emergency.
I live in a HCOL area, so I get this sentiment. But it doesn't match at all with actual reality in the US. The median 65-69 year old has a net worth of $272k, with the average being $1.25M [0]. A lot of places are pretty cheap - especially since even modest earners could get thousands of $ in SS each month.
[0] https://dqydj.com/average-median-top-net-worth-percentiles-b...
In theory ultra high wealth buys the luxury of leisure. In practice, in the US today, leisure monotonically decreases with income and wealth. By far the bottom quintile works much fewer hours than the top 1%.
Edit: forgot link
[1] https://www.epi.org/publication/ib348-trends-us-work-hours-w...
If we define work as "hours spent doing something", then potentially. But I like my first definition better.
https://www.businessinsider.com/stress-effect-on-aging-healt...
Perhaps, though that effect must be offset by other things (and/or access to healthcare), since the life expectancy based on income graph is monotonically increasing for both genders.
http://www.equality-of-opportunity.org/health/
My hunch is that the well off might have stress on the job (though again, this is a subset of well-paid positions, and I think the subset is actually smaller than you think), but everyone else has a lot more stress outside of the job which is much more important. The stress associated with poverty cannot be understated - it lowers IQ by ~15 points.
(Poverty and IQ: https://www.pbs.org/newshour/economy/making-sense/analysis-h...)
Responsibilities cause stress, but power to address those responsibilities mitigates it somewhat. CEO's have much more of that power than middle managers do.
https://www.shrm.org/resourcesandtools/hr-topics/employee-re...
Lifestyle doesn't matter. You can be extremely wealthy and live austerely, if you desire. What matters is security, power/influence, and so the ability to pass wealth to further generations.
A person with $20M assets at 8% earns $1.6M per year. A 20x difference in assets is essentially an entire generation of wealth accumulation..
Indeed, imagine saying: “there's not that much difference between $50,000 in assets and $1,000,000 in assets.” Of course more money earns more money, but it's still important not to underestimate the importance of a factor of 20. One can try it the other way: “there's not much difference between $20,000,000 and $400,000,000.” Except that many of us here probably can't really grasp either, I think we wouldn't believe that.
Both of which do nothing for that persons daily life. Can’t unlock home equity because they need a place to live. Not unlocking 401k value because… we’ll they are frugal and that is a bad idea.
While they are definitely well off, perhaps upper middle class, it is a vastly different lifestyle than 20mm net worth.
Those lifestyles are no where near being the same.
*based on a conservative 3% withdrawal, but the point stands irrespective of the withdrawal percentage.
You could scrutinize loans based on assets to close the gap.
If you are retired with $1.2M in assets, even a 3% draw down rate only gives you $36K a year. You can make that work if you are frugal but that is a vastly different lifestyle from the $20M individual.
The lifestyle difference between 1.2 and 20 million in assets are not similar.
$1.2 million is comfortable and $20 million is generational wealth. Many people who have that level of assets are part of a multi family office that will literally do your chores for you.
https://www.wsj.com/articles/SB10001424127887323551004578441...
Of course wealth is a gradient, and any buckets are approximations.
None of which is to imply I’m not rich to most of the country. I am. But I still have to work 40+/week to pay my mortgage.
...and child care (for 3 children under 3 years old), elder care (my parents are over 70 with existing and emerging conditions), etc. I just don't really expect to retire, to be perfectly honest, despite what my net worth is on paper.
All simplifying assumptions necessarily group some unlike elements. But we need to simplify in order to describe complex systems.