While 15 million Americans are without jobs, and perhaps ready to join another 2 million Americans in foreclosure, don't think they're the only ones with worries. According to a just-released survey of millionaire households, having what would seem like a nice cushion of $3.5 million in investment assets -- outside a retirement plan and family home -- doesn't make a person immune from anxiety. The annual Fidelity survey reveals that many millionaires, nearly half of those in the survey, actually don't "feel wealthy" and that they are taking steps to review their financial planning and even adjust their lifestyles. The average age of those surveyed is 59, and many experienced the previous downturns from the 1970s oil crisis through the deep recession of the early 1980s with its double-digit unemployment rates. Still, 77% of those surveyed said the latest downturn is the "worst economic environment they have experienced." The survey is done by an independent research firm, and participants don't know the results will be used by Fidelity. But Mike Durbin, president of Fidelity Institutional Wealth Services, notes that of the 4.4 million U. S. households with at least $1 million in assets outside their retirement plans, 37% have at least one account with Fidelity.
Millionaires Generally OptimisticPerhaps the most surprising thing about the survey is the general level of optimism about the future and the stock market. Even though the survey was taken in late February, before the current market rally began, 39% said they felt confident about investing in the Dow Jones Industrial Average between 7000 and 7999.
And on a slightly longer time horizon, their optimism increases for 2010, bringing it to the highest level since Fidelity's "Millionaire Outlook" study began in 2006. In addition to anticipating a stock market rebound, there was increased optimism that business spending and consumer spending would rebound. The survey revealed one huge cloud on the horizon for millionaires: the likelihood of higher taxes. Those expecting higher capital gains taxes was at 72%, while 67% anticipate a higher dividend tax rate, and 62% predict higher federal income tax rates. They indicate they are taking action now, including accelerating plans to harvest remaining capital gains at the current low rates.