You’d think that American households earning $100,000 or more a year wouldn’t be too concerned about rising inflation. After all, even in tough economic times, a six-figure income brings some benefits.
Well, think again.
Wealthy Americans aren’t immune to anxiety about the inflation cloud looming over the nation, according to a new study from CNBC.
A whopping 96 percent of high-income earners are concerned about inflation, and 65 percent of Americans with six-figure incomes are “very concerned” about rising prices.
The study, which surveyed 1,000 U.S. adults with an annual income of $100,000 or more, also noted that one-third (34 percent) of high-income Americans said they were “in better financial shape” than they were a year ago Worse, while 38% are slamming on the personal consumption brakes.
Declining demand for six-figure earners
Perhaps high earners have good reason to be concerned.
US inflation is at its highest level since 1981, with no clear path to relief in sight.
According to data reported by LendingClub and Pymnts, more than half of the U.S. population, or nearly 150 million adults, lives on a paycheck.
It’s not just people of average income who live on the fringe lifestyle.
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According to the same report, more than one-third (36%) of consumers making more than $100,000 a year report that by May 2022, one-third of Americans earning more than $250,000 a year will be Report yourself in this situation.
“Our data shows that high-income consumers tend to be college-educated, married and have children,” said Anuj Nayar, Lending Club’s financial health officer. “They also tend to have higher financial obligations and are more likely to use their capital to fund their lives.”
Add in expanding factors such as houses and mortgages, children, cars, debt and caring for aging relatives, and household finances become more complicated, even for big six-figure earners.
“Flexibility can become more difficult for people in this income bracket,” Nayar said. ‘They are more likely to be in financial distress’
Shards of Light?
Wealthy Americans are gnashing their teeth at high inflation, which is actually good news for the economy, some financial gurus say.
“Don’t confuse ‘anxiety’ with ‘insolvency,'” said Howard Dvorkin, chairman and financial advisor of Debt.com, who has been on the job for nearly three years. “I’ve noticed that the more you earn, the more you worry about the economy.”
In this regard, the CNBC study is actually reassuring because it tells Dworkin that six-figure Americans are already struggling to cope. “They are preparing for the worst while hoping for the best,” he said.
Meanwhile, those already struggling with debt may not have the resources to do more than just pray.
“The price of that blue-collar family making $50,000 a year is also going up,” Dworkin added. “Their inability to prepare for a recession means ‘anxiety’ is also a luxury they can’t afford.”