• A study by UBS found that only 28 per  cent of investors with $1-$5 million feel rich
• Only 60 per cent with $5 million or more  think they are wealthy
• The average annual income in America is  $51,500
• The rich worry about losing their  fortune, looking after family members and ‘keeping up with the  Joneses’
• Millionaires would feel rich if they had  ‘no financial constraints on their activities’

By  Alex Greig

PUBLISHED: 12:08 EST, 28  July 2013 |  UPDATED: 12:09 EST, 28 July 2013

How much money would you need to have before  you considered yourself rich? Would it be $100,000? $500,000? According to a new  study, among millionaires, that number should be at least $5  million.

The study, entitled ‘What is Wealthy?’,  conducted by investment firm UBS, found that only 28 per cent of investors with  between $1 million and $5 million in investable assets considered themselves  rich.

Those with $5 million or more felt a little  more comfortable – for that group, 60 per cent felt rich.

 

Mo’ money, mo’ problems: People with between $1 million  and $5 million don’t think they’re rich

The study found that investors defined wealth not  as having a finite amount of money but rather having ‘no financial constraints  on their activities.’

This may seem strange to those of us who  don’t inhabit the rarefied world of millionaires, especially when you consider  that the median household income in the U.S. is $51,500 per annum.

But according to David Cay Johnston, a Pulitzer-prize winning author specializing in economics and tax, living as a millionaire among millionaires creates a chronic case of ‘keeping up with the Joneses’.

‘In New York City, being wealthy enough to  own upright a property worth $5 million doesn’t make you feel rich, because  you’re surrounded by people who can buy and sell you in a two hours income,’ he  told ABC News.

‘There are always some people around you who  have more. Also, having $5 million in Keokuk, Iowa, is a lot different than  having $5 million in New York or Silicon Valley or Seattle.’

 

Rich hitch: 60 per cent of those with more than $5  million concede they are indeed rich – others believe freedom from financial  constraints equates to true wealth

The study also found that among the rich,  there’s a lack of confidence about the future. It seems that for millionaires,  the more you have, the more you have to lose.

While the uber-rich fret about losing their  money, more than three-quarters of Americans are living paycheck-to-paycheck,  according to a study by Bankrate.com.

The Bankrate.com study found that half of all  Americans have less than three months savings to depend on in straitened times,  while a quarter have none at all.

‘To us, the surprise was that that many  people with $1 million or more did not consider themselves wealthy,’ Emily  Pachuta, head of investor insights at UBS Wealth Management Americas told ABC.

‘We think it shows a very interesting mindset  shift. People have certainly experienced a shock from the volatility of the  market, and they are very aware that it takes a significant amount of money to  have that dual feeling of having enough money and no financial  constraints.’

For many, being wealthy means the burden of  taking care of relatives falls squarely on their shoulders.

 

It’s all relative: While the median household income in  the U.S. is just over $50,000, those with millions often feel a need to keep up  with the Joneses and don’t feel wealthy compared to richer peers

Four out of five of the 4,450 investors who  answered the survey were providing financial support for aging parents and/or  grown-up children.

‘This has a real impact on the definition of  a comprehensive financial plan. The top two personal concerns for investors are  long-term care and the financial situation of children and grandchildren,’  states the study.

‘When a financial plan addresses those two  concerns, confidence in achieving goals skyrockets to 85 per cent [from 62 per  cent].’

For the millionaires surveyed, security comes  in the form of cash.

UBS found that investors maintain peace of  mind by holding onto at least 20 per cent of their money in cash to cover for  any emergencies and ensure they can make large purchases without having to sell  assets.

As for the rest of us, the American Dream is  becoming harder and harder to reach. According to a study by the Equality of Opportunity  Project, one-third  of those who are born into the top one per cent of wealth will earn $100,000 per  annum by the age of 30, while only one in 25 of those at the bottom end of  wealth will reach that income level.

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