Financial Success: What Does It Mean and How Do You Achieve It?
A new study by financial services company Empower asked 2,203 Americans, 18 and older, how they defined “financial success.” The results reveal some fascinating differences between how generations view their money. But the numbers also show that folks at every stage of their financial journeys share some common goals, worry about some common roadblocks, and have arrived at a common conclusion about the most impactful financial tool at their disposal.
"Success" is more than money.
On average, respondents to Empower's survey reported that "Financial success" means earning just over $270,000 per year and having a net worth of about $5.3 million. Break down those averages, and it seems that Americans' definition of success is on the rise: Boomers pegged success as earning around $100,000 per year and about $1 million in net worth, while Gen Z targeted earning almost $600,000 per year and $9.5 million in net worth.
Perhaps young people who have grown up through 9/11, the Great Recession, COVID, and rising inflation and interest rates are feeling like they need more wealth to achieve financial security. Those who grew up with social media might also be dealing with FOMO and "Keeping up with the Joneses," which might raise the price tags on some of their lifestyle goals.
However, when asked what types of success they value the most, 59% of respondents said "Happiness," which the survey defined as "being able to spend money on the things and experiences that bring the most joy." Only 27% selected "Wealth" in and of itself. When asked what they believed was the biggest factor in achieving financial success, 84% selected "Hard work." And over one-third of respondents said that, more broadly, success is as much about your "Physical well-being" as it is about how much money you have. That tells me folks from all generations have some very healthy ideas about what money is really for, and what they have to do if they want to achieve financial success.
What could get in the way?
35% of those surveyed reported that "The economy" is the biggest barrier to their financial success. "Income instability" (30%), "Not setting clear financial goals" (28%), and "Procrastination or delaying financial planning or decision-making” (26%) rounded out the top four.
In the past year, we’ve spent a lot of time on our blogs and podcasts discussing the disconnect between strong markets helping investors' portfolios and higher prices hurting their day-to-day purchasing power. And if you have adult children or grandchildren, it's likely you've heard them talking about making multiple moves in their young careers or spending their free time working side jobs in the "Gig economy." These survey results show that, regardless of the general positivity on Wall Street, folks are still struggling to adjust to the post-pandemic economy. That's especially true of younger workers who don't always have access to the same generous employee benefits and retirement planning many Boomers enjoyed in their careers. In fact, 60% of respondents -- including 69% of Millennials -- said that it's harder for their generation to achieve financial success.
How can I increase my chances of achieving "success"?
Longtime readers and listeners know that one of our mantras at Keen Wealth is, "Control the controllable." There's not much any of us can do about "The economy" or "Income inequality." But you do have the power to address the other two top challenges that respondents identified: not setting clear goals and procrastinating on financial planning.
When asked, "What are the top money moves that help people achieve more financial success?" 45% responded, "Having a financial plan," the number one answer. And the second and third-ranking answers, “Building up a retirement plan” (30%) and “Investing in stocks” (27%), both fall under that larger financial planning umbrella.
Of course, comprehensive financial planning isn't going to make any of the money challenges or worries you're facing in your life disappear completely. But when you know what you want to achieve and you have a plan that accounts for all your known goals and variables, you also gain flexibility to keep succeeding, despite the things we can't control: up-and-down markets, natural disasters, changes to your family dynamics, or even an unexpected job loss.
Call up Keen Wealth and let’s schedule your year-end review to discuss your definition of financial success and how you can achieve more with your money in 2025.
About Bill
Bill Keen is a financial advisor with over 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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