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How much do you need to be “wealthy”?

April 24, 2025

Category: News

Wealth is often associated with financial abundance. However, when you look at the things that bring you joy and give you purpose, it might not be the value of your assets.

Indeed, a February 2025 report from HSBC suggests the younger generation is less likely to define wealth by how much they have in the bank. It’s an approach that may help you identify what’s most important to you.

It’s not a new trend either. In fact, the new understanding of wealth could be returning to its roots. The origin of the word “wealth” links back to the Old English word “well”, which is also the same root as words like “wellbeing”, “welfare”, and “wellness”.

So, when you think about growing your wealth, you might want to look beyond your assets.

A £213,000 annual income is deemed enough to be wealthy

When asked what you need to be considered wealthy, participants in the HSBC report suggested an average annual income of £213,000 was the threshold in the UK – more than six times the national average salary.

Interestingly, many people who were paid six-figure salaries, placing them in the top 4% of earners, didn’t identify themselves as wealthy.

Many wealth signifiers focused on material assets too. For example, having a boat, private jet, or luxury car were among the items the general population believed someone would own if they were wealthy.

While your income and how you spend it may be a good indicator of your financial freedom, it offers only a narrow view of wealth. The income you need to feel financially secure can vary significantly depending on your lifestyle, and many other non-financial factors might affect how wealthy you feel, like the time to focus on what you want.

Your lifestyle will affect what wealth means for you

One of the key challenges when giving wealth a monetary value is that it’s likely to be different for everyone.

Even if you’re earning a high salary, you can still feel financial pressure. For example, a significant portion of your income might be used to pay a mortgage, school fees, or car repayments. A higher income doesn’t necessarily mean you feel financially confident or that you’re free from worries about how financial shocks could affect you.

So, if your goal is to build wealth, it’s worth thinking about the lifestyle you want and what financial wealth means to you.

For some, it might be defined as having a certain amount in the bank saved for a rainy day. For others, it may be about the income they earn through work.

Non-financial items could add wealth to your life too

When you’re setting out your desired lifestyle, you may want to think about non-material wealth, and it might be something you could learn from younger generations.

According to the HSBC report, almost half of Generation Z see wealth as best understood in non-material terms, such as having a strong work-life balance. Among those aged 35–44, this understanding of non-material wealth falls to 35%.

Considering what gives your life purpose or what you simply enjoy could be a useful exercise and help you make decisions that will enrich your life.

A strong financial foundation is often needed to support non-material wealth.

For instance, being able to spend more time with your children or grandchildren may make your life wealthier. However, if you want to reduce your working hours or enjoy days out together, you’ll usually need money to support this.

Alternatively, you might love learning more about other cultures and visiting incredible sights around the world. While this type of wealth isn’t material, having a higher disposable income could allow you to make it a greater part of your life.

As a result, when you’re thinking about how to increase your life’s wealth, you may need to consider financial wealth with lifestyle wealth to strike a balance that makes your life richer.

Get in touch to talk about a financial plan that makes your life richer

As your financial planner, we could work with you to build financial wealth and manage your assets. After all, your finances are likely to play an important role in creating the lifestyle you want.

In addition, we may create a financial plan that makes your life richer in other ways, from providing more free time to dedicate to the things you love to supporting causes that are close to your heart. So, a financial plan doesn’t just focus on material wealth, but on improving your wellbeing too.

If you’d like to arrange a meeting, please get in touch.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

Approved by The Openwork Partnership on 14/04/2025.

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