5 Quiet Signs You’re More Financially Stable Than Most
Wealth can be subjective, and some indicators you might be "richer" than you think aren't easy to quantify. How do you change your perception from operating from a deficit to operating from abundance? What do you earn and what do you have in the bank?
In the concept's simplest form, the answers to those two questions will determine your comparative wealth. Here are five key signs you may be wealthier than many Americans.
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1. You've Met Basic Saving Milestones
Even the most impressive income is no indication of wealth if you spend more of it than you make, which many high earners do. The more accurate barometer, then, is how much you have in the bank.
"If you're making higher than an average salary and have saved four times your annual income, and you're in your 20s, you're doing very well," said Joel Ohman, certified financial planner and CEO of Clearsurance.
Ohman's benchmark is exceptionally high. The standard guideline is to have the equivalent of your annual salary saved by age 30, three times your salary by 40, six times by 50, eight times by 60 and 10 times by 67.
Several studies have shown more than half the country is behind on those milestones, so even being on par with your decade's goal lands you a spot among the more affluent half.
2. You're Not Drowning in Debt
Ben Richardson, financial expert, capital markets consultant and director of Acuity Training, feels that you're richer than you think if "you do not have debt or exorbitant bills weighing you down that need to be paid."
"Being 'rich' means something different to everyone," added Kendall Meade, certified financial planner at SoFi. "For some, this may just mean being able to comfortably afford their lifestyle. For others, it may be a specific target salary or savings amount. For others, it may be having the freedom to change careers or leave the workforce completely."
3. You're Not Living Paycheck to Paycheck
"In the current state of the economy, coupled with inflation, many families are surviving from paycheck to paycheck and have to anticipate when the next one is due to alleviate financial burdens," said Richardson.
The two most measurable indicators that you're wealthier than most Americans are that you earn more than 50% of them and have more money saved than 50%.
4. You Have a Healthy Cash Cushion To Invest
"You already have a sufficient amount contributed towards your retirement, and an emergency fund is not a concern or has already hit its target," said Richardson.
This means you also have money left over to invest.
Richardson continued, "Some people work two jobs to make ends meet, but it is different when you have money readily available to invest or put toward a passive income stream."
5. Vacations Are Within Reach
"Going on vacation can be considered a luxury, especially if you are traveling internationally," said Richardson.
People who don't have savings or are living paycheck to paycheck may dream of going on vacation, but can't afford it. However, if you are booking flights and hotels without anxiety and still have all of your expenses covered and then some, you might have a little more wealth than you give yourself credit.
Andrew Lisa contributed to the reporting for this article.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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