The term “mass affluent” refers to a demographic that is wealthier than the middle class but not as wealthy as the upper class. This group has typically earned their wealth through hard work rather than inheritance. Politicians often focus on the middle class because it’s a large voting bloc, but the mass affluent rarely face the same level of scrutiny or negative attention.
Being “mass affluent” involves both a substantial income and considerable assets. To be classified as mass affluent based on income, one would need to earn at least 50% more than the median household income in their area. For instance, if the median income is $75,000, a mass affluent income would start at $112,500. The threshold varies significantly by location due to differences in the cost of living.
In terms of assets, the financial industry typically defines the mass affluent as individuals or households with liquid assets ranging from $100,000 to $1 million. This broad range accommodates varying ages and potential for asset growth. For example, a service like Empower targets individuals who can aggregate at least $100,000 in investable assets.
The mass affluent also have a distinct net worth breakdown. A significant portion of their wealth is often tied up in their primary residence and investment real estate, with another substantial part in liquid financial assets. They also tend to have investments in pensions, insurance, annuities, and privately held businesses, showcasing a diversified portfolio.
Overall, the mass affluent are not just wealthy but also have diverse income sources and assets, making them a robust economic group. They are mostly well-educated, continually seeking to improve their financial standing through education and investment. This group believes strongly in the value of saving and investing, aiming to build enough wealth to move into the ranks of the truly wealthy eventually.
