Are You Feeling More Wealthy In The Time Of COVID?
COVID-19 has been devastating to Americans’ health. But it also appears to have improved their views on wealth. The Charles Schwab Corporation surveyed 1,000 Americans aged 21 to 75 to discover their perspectives on saving, spending, investing, and wealth. The survey was conducted in January (before the outbreak) and again in June. One of the biggest changes was in regards to wealth. When asked how much money it takes to be financially comfortable, the average amount reported by respondents in the January survey was $934K. In June they came up with only $655K, a drop of almost 30%. As far as the level needed to be considered wealthy, it was $2.6 million in January but only $2 million in June. In short, the participants indicated they felt they could get by with much less money since the pandemic struck as compared to previously.
Since the stock market had recovered much of its losses from its COVID-induced collapse by June, I think we can safely infer that the pandemic and its associated social impact was a major factor in shaping respondents’ changed perceptions. In fact 57% of survey participants stated that they or a close family member had been financially impacted by COVID-19.
In addition to the belief that the bar for financial security has been lowered, participants indicated positive changes to other financial behaviors as well. Forty percent said they’re likely to save more, 24% are more likely to have a financial plan, and 20% are more likely to invest more after the pandemic than before. Jonathan Craig, senior executive vice president at Schwab Investor Services, observed that “we’re seeing a high percentage of people engage with their money and investments, and in many cases seek more help and guidance to make sure they’re on the right track.”
On the darker side, in January as many as two-thirds of respondents had not felt confident about being able to reach their financial goals. By June that number had increased to three-quarters. This should be a wakeup call to federal leaders who – unlike the states – are the only ones with the ability to actually create money to provide economic support to their citizens when needed.
COVID-19 is likely to have a major impact on our society in many ways. Improving the way Americans manage their wealth would be an unexpected yet positive outcome.
Here’s a link to the Schwab survey press release: https://pressroom.aboutschwab.com/press-release/schwab-investor-services-news/covid-19-changes-american-perspective-wealth-and-finance.