Wealthy Defined as $5 Million-Plus, with 'No Financial Constraints'

Wealthy Defined as $5 Million-Plus, with No 'Financial Constraints'How do you define being wealthy? $1 million? $10 million?
How about at least $5 million with “no financial constraints on activities.” Oh, and plenty of cash on hand, about 20 percent.
That’s the consensus from the survey of 4,450 investors by the latest UBS Investor Watch.
“Investors are telling us that wealth isn’t just about having a certain amount of money,” the report says. “The majority of investors define wealth as having no financial constraints on what they do.”
But they were asked to peg a dollar amount to being wealthy. And they said it takes at least $5 million. But the security that comes with cash also plays a critical role, and UBS has seen investors holding 20 percent in cash on average over the past three years.
Why the substantial cash cushion? It allows them to be more aggressive with their other investments.
UBS said that a surprising result from the survey is that four out of five investors are providing financial support for adult children or aging parents. And one in five is sharing a home with those adults.
“This has a real impact on the definition of a comprehensive financial plan,” the report says. “The top two personal concerns for investors are long-term care and the financial situation of children and grandchildren. When a financial plan addresses those two concerns, confidence in achieving goals skyrockets to 85%.”
Even the recent market volatility caused by impending Federal Reserve action to end the stimulus has not spooked these confident long-term investors. They believe any actions will ultimately stabilize the economy in the long run.
Fifty-one per cent of investors expect this change to have a negative short-term impact on the economy, but will stabilize the economy in the long run.
Only 9 percent expect the Fed action to have a negative long-term impact.
The majority of investors (59 percent) are not changing their investment strategy as a result of the Fed announcement.
Regarding timing, investors expect the Fed to start pulling back on the stimulus in late 2013 or early 2014, and end the program in late 2014 or in 2015.
Wealthy Defined as $5 Million-Plus, with No 'Financial Constraints'
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Source: UBS.

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