getting rich in houston
Take a stroll through areas such as River Oaks, Memorial, The Woodlands, Sugar Land, or West University — named one of the richest neighborhoods in America — and one thing becomes clear: the Houston area is home to vast wealth. But just what is required to be considered wealthy here? A new report reveals the exact figure Houstonians believe it takes to be rich or financially comfortable.
Houston residents say it takes a net worth of $2.5 million to be considered wealthy and $1.5 million to feel financially comfortable, according to data released by Schwab’s Modern Wealth Index. Both numbers are slightly above the respective national averages of $2.4 million and $1.4 million — and also just ahead of the amounts that Dallas residents reported: it takes $2.4 million to be wealthy in Dallas and $1.3 million to feel financially comfortable.
Five hundred Houston-area residents participated in Schwab’s assessment, which scores participants on how well they manage their money and investments across four factors: goal setting and financial planning, saving and investing, staying on track, and confidence in reaching financial goals.
Valuations in the study include being able to pay bills on time and still save, have life insurance, feel financially stable, have an emergency fund, and living paycheck to paycheck.
Planning equals wealth
The stark reality is that nearly three in five Houstonians say they live paycheck to paycheck; only one in three have a written financial plan, according to data. The report notes a connection between planning and positive investing and saving behavior. The Schwab Index found that 71 percent of respondents who plan are able to pay their bills and save each month — compared to 40 percent of non-planners.
Planners are also more likely to stay engaged with their investments, be aware of the fees they are paying, and have confidence about reaching their goals.
Among those without a written plan, 39 percent reveal that they don’t think they have enough money to merit a formal plan. The data also notes that nearly a quarter say getting a financial plan simply never occurred to them and another 19 percent say they wouldn’t know how to go about getting a plan.
(Not) all about the money
Houstonians aren’t exactly materialistic, the Schwab survey finds. Locals described being wealthy as living stress-free/having peace of mind, being able to afford anything they want, and having loving relationships with family and friends.
In ranking their top ways to feel wealthy in their day-to-day lives, Houstonians most value spending time with family (56 percent of respondents), having time to themselves (54 percent), and owning a home (49 percent).