Bay Area defines $1.7M as amount needed to be 'financially comfortable,’ survey says, ranking region at top

SAN FRANCISCO, CALIFORNIA (Photo by Justin Sullivan/Getty Images) (Getty Images)

A new survey showed the Bay Area had the largest net worth threshold to define financial comfort, with a figure more than a million dollars higher than the survey’s lowest ranked metro area of Houston.

The annual Modern Wealth Survey, conducted by financial services company Charles Schwab, looked at 12 major U.S. metro regions and measured the average net worth it took for residents to feel "financially comfortable," as well as gauging the amount it took to feel "wealthy."

The figure for the Bay Area's average net worth for financial comfort came out on top at $1.7 million. To be considered "wealthy," in the Bay Area, that figure stands at a whooping $4.7 million.

SEE ALSO: New study says high housing costs, low income push Californians into homelessness

The Southern California region, which clumped together the Los Angeles and San Diego metro areas, had the second-highest figure for financial comfort at $1.5 million. The amount needed to be considered "wealthy" was $3.5 million.

The New York City area came in third for financial comfort at $1.2 million, with the average net worth for wealth at $3.3 million.

Compare those regions with the Greater Houston area, where survey participants put the price point for financial comfort at $606,000 and for wealth, it was $2.1 million.

Researchers noted that their findings showed a wealth paradox among Americans, driven by the contrast between how people defined wealth for themselves compared to how they defined it for others, 

Among the 48% of Americans who said they already felt wealthy today, their average net worth was $560,000. 

That was only about a quarter of the average $2.2 million figure respondents gave as the amount of money it took to be "wealthy." 

Researchers said that in the San Francisco Bay Area, the contradiction was stark. Among the 39% of residents who said they were "wealthy," the average net worth was $721,000. When respondents were asked how much was needed to be considered "wealthy" that figure skyrocketed to $4.7 million. 

The survey noted that a significant 45% of respondents in the San Francisco Bay Area also reported living paycheck to paycheck.

Furthermore, the analysis found Bay Area respondents identified important markers for defining wealth weren't necessarily money related. 

"It’s clear that non-financial assets like health and family resonated far more when defining wealth than having large sums of money," researchers said. 

When asked to choose which statement best described how residents thought of wealth in their own daily lives, the definition was less about achieving a certain dollar amount. 

The top answers were: not having to stress over money (78%), enjoying experiences (74%), having a healthy work-life balance (74%), and being in good health (68%).

Additionally, when residents in the Bay Area were asked to explain what defined "being wealthy," affording the lifestyle they want topped the list with 37%. No debt was also a popular answer (35%). The survey showed 21% defined it as having a high income and 20% said it meant having a lot of money in investments.

Metro areas ranked by average net worth considered "financially comfortable" 

1. San Francisco: $1.7M  

2. SoCal (Los Angeles and San Diego): $1.5M 

3. New York: $1.2M  

4. Seattle: $1M 

    Washington, D.C.: $1M 

5. Boston: $932K 

6. Dallas: $820K 

7. Chicago: $817K 

8. Atlanta: $729K 

9. Denver: $710K 

10. Phoenix: $653K 

11. Houston: $606K 

Metro areas ranked by average net worth considered to be "wealthy"

1. San Francisco: $4.7M

2. SoCal (Los Angeles and San Diego): $3.5M 

3. New York: $3.3M  

4. Seattle: $3.1M 

5. Washington, D.C.: $3M 

6. Boston: $2.9M 

7. Denver: $2.5M 

8. Phoenix: $2.4M 

9. Chicago: $2.3M 

    Atlanta: $2.3M 

    Dallas: $2.3M 

10. Houston: $2.1M 

Source: Charles Schwab 2023 Modern Wealth Survey