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UBS Investor Watch Report Examines What Drives Millionaires

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The Impact of Wealth and Success, How Much is Enough?

New York, NY - UBS Wealth Management Americas (WMA) today released its quarterly UBS Investor Watch report, "When is enough…enough?" revealing the anxieties that underlie the successes millionaires have achieved. The survey of 2,215 U.S. investors with more than $1 million in net worth revealed that while millionaires recognize their good fortune, they feel compelled to strive for more, spurred on by their own ambition, their desire to protect their families' lifestyle, and an ever-present fear of losing it all. As a result, many feel stuck on a treadmill, without a real sense of how much wealth would make them satisfied enough to get off.

Climbing the Socioeconomic Ladder
Investor Watch found that more than three-quarters of millionaires (77%) grew up middle class or below. Working their way up the socioeconomic ranks was a conscious aim, as 61% aspired to become millionaires and 65% felt it was an important milestone to reach the $1 million mark.

Nearly three-quarters of millionaires (74%) surveyed feel like they have “made it” and the vast majority (85%) attribute their success to hard work. Forty-four percent said hard work was the single most important factor in becoming a millionaire.  

Overall satisfaction with life rises considerably and consistently as net worth increases. The survey revealed that 73% of those with $1 - 2 million reported being “highly satisfied” with their life compared to 78% of those with $2 - 5 million and 85% of those with $5+ million. Millionaires recognize that their wealth buys them more than what their family needs: 37% of those with $1 - 5 million responded that their wealth allows them to live a fairly luxurious lifestyle, compared to 62% of those with $5+ million.

The Treadmill
However, with increased wealth come increased expectations. Investor Watch found that the wealthier people become, the more likely they are to have increased expectations for their standard of living. Fifty-eight percent of millionaires report feeling increased expectations for their standard of living over the last 10 years. As a result, millionaires keep striving for more.

Higher expectations cause stress for millionaires about their ability to maintain the life they've built. Among working millionaires with children at home, 52% feel like they are stuck on a treadmill, unable to get off without sacrificing their family's lifestyle.

“The majority of millionaires say they have worked hard to earn their wealth and appreciate the lifestyle it affords them and their families. But enough never seems to be enough—even the wealthiest continue on the treadmill to achieve a better life,” said Paula Polito, Client Strategy Officer, UBS Wealth Management Americas.

Investor Watch revealed that no matter how much wealth is accumulated, millionaires still fear they could lose it all with one wrong move. Half (50%) of those with $1 - 5 million are afraid that one major setback (e.g., job loss, market crash) would have a significant impact on their lifestyle, vs. 34% of those with $5+ million. For millionaire parents working full-time, the anxiety is even greater–63% feel that one major setback would have a significant impact on their lifestyle.

Success Comes at a Price
Reaching the millionaire milestone does come at a cost, as 64% of millionaires report that they have had to give up precious family time to achieve their dreams. Most millionaires (68%) admit to having regrets, most commonly around making mistakes in a relationship with their spouse or family and not spending more time with family.

Millionaire parents with children at home struggle to provide the best for their children without spoiling them. They worry that their children will grow up without the right values–two in three (67%) already feel that their children take things for granted and more than half (53%) are at least somewhat worried that their children act entitled. Millionaire parents expressed concern that their children do not understand the value of money (65%), lack motivation (54%), harbor unrealistic expectations (54%) and fear that they will embark on an unstable career path (50%). 

The Millennial Millionaires and the Joneses
Though they have achieved success at a relatively young age, Investor Watch found that Millennial millionaires experience more stress, fear and anxiety about their wealth than older generations. Millennial millionaires are more likely than other generations to fear losing their wealth entirely (52%). They also fear not living up to their potential (59% of Millennials compared to 54% of Gen Xers and 24% of Baby Boomers) and disappointing others close to them (59% of Millennials compared to 40% of Gen Xers, 25% of Baby Boomers and 20% of the WWII generation). 

Millennials are most likely to feel pressure to “keep up with the Joneses” (48% vs. 44% of Gen Xers vs. 22% of Baby Boomers vs. 14% of the WWII generation). They are the most conscious about how their wealth stacks up compared to peers (68% vs. 60% of Gen Xers vs. 53% of Baby Boomers vs. 46% of the WWII generation).

Achieving success at such a young age means that Millennials’ wealth has a longer lifespan and therefore a greater chance of being lost, so they have to be more diligent and put in more effort to maintain their fortune and lifestyle,” says Sameer Aurora, Head of Investor Insights for UBS Wealth Management Americas. “Millennials, more so than any other generation, are also very conscious of how their lives stack up against their peers’, so Millennials tend to put pressure on themselves to earn more and compete for a higher standing in the social hierarchy.”

Investor Watch found that Millennial millionaires also aspire to a higher wealth threshold–older generations said they would consider themselves wealthy when they acquired $5 million, while Millennials most frequently (38%) said they would feel wealthy once accumulating $10 million.

We invite you to read the full report here: www.ubs.com/investorwatch

About UBS Investor Watch
UBS Investor Watch is a quarterly publication analyzing the latest in investor sentiment and behavior. Dedicated to generating insights that help UBS Financial Advisors deliver exceptionally for their clients, UBS Investor Watch is the industry’s definitive guide to what’s on investors’ minds right now.

Methodology
For this eleventh edition of UBS Investor Watch, 2,215 U.S. millionaires responded to our survey from March 11 – 19, 2015. These investors have at least $1 million in net worth, including 610 with at least $5 million in net worth. With 90 survey respondents, we conducted qualitative follow-up interviews.

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Notes to Editors

About UBS Wealth Management Americas
UBS Wealth Management Americas provides advice-based relationships through financial advisors who deliver a fully integrated set of products and services specifically designed to address the needs of ultra-high net worth, high net worth and core affluent individuals and families. It includes the Wealth Management U.S. business, the domestic Canadian business and the international business booked in the United States.

About UBS
UBS draws on its over 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland. Its business strategy is centered on its pre-eminent global wealth management businesses and its leading universal bank in Switzerland, complemented by its Global Asset Management business and its Investment Bank, with a focus on capital efficiency and businesses that offer a superior structural growth and profitability outlook.

UBS is present in all major financial centers worldwide. It has offices in more than 50 countries, with about 35% of its employees working in the Americas, 36% in Switzerland, 17% in the rest of Europe, the Middle East and Africa and 12% in Asia Pacific. UBS Group AG employs about 60,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).