The examples and perspective in this article may not represent a worldwide view of the subject. (October 2024) |
In marketing and financial services, mass affluent and emerging affluent are the high end of the mass market, or individuals with, in 2004 terms, US$100,000 (equivalent to $161,311 in 2023) to US$1,000,000 (equivalent to $1,613,108 in 2023) of liquid financial assets[1] plus an annual household income over US$75,000 (equivalent to $120,983 in 2023).[2]
Mass affluent consumers are an important target market for sellers of luxury goods.
Difference from upper middle income
editThere may be a high correlation between the households in the upper-middle reaches of the income strata and the mass affluent, but there are differences. Social class is the result of a person's function within society rather than merely the income of the household in which he or she resides. Both terms refer to people whose wealth or income is above the average, yet below the top. As opposed to households with above average incomes the mass affluent are also defined through liquid assets such as stocks, bonds, cash, and mutual funds. Fixed assets such as real estate are not commonly counted. This is because liquid assets provide more financial flexibility, which is a desirable trait in customers.
The mass affluent have been characterized as those who save more than they spend and invest for their future. While they worry about funding their children's college education, they realize other savings and loan options exist and they are not opposed to their children paying some part of their educational costs. The mass affluent generally may worry about replacing their paycheck in retirement, and may need to be encouraged to spend more money during their retirement years. They often wish to leave an inheritance to their children. The mass affluent will have between US$500,000 and $1.5 million in investable assets upon retirement with a net worth between $500,000 and $2.5 million. They spend between $4,000 and $10,000 per month in retirement.[3]
In the United States
edit
In the United States there are roughly 33 million mass affluent households, and they own roughly 37% of America's liquid financial assets.[4] Among family households, approximately thirty percent could be described as being mass affluent.[5]
| Asset Class | Percentage |
|---|---|
| Principal Residence | 23% |
| Investment Real Estate | 14% |
| Liquid Financial Assets | 22% |
| Pension and Employee Retirement Plans | 16% |
| Insurance and Annuities | 9% |
| Privately Held Business | 16% |
See also
editReferences
edit- ^ "Schwab: Courting the mass affluent". Archived from the original on 8 April 2005.
- ^ Spinelli, Stephen (2013). Disrupt Together: How Teams Consistently Innovate. Pearson Education. p. 237. ISBN 9780133384116.
- ^ Marc S. Freedman. (Feb. 2, 2009). "Mass appeal" http://www.financial-planning.com/fp_issues/2009_2/mass-appeal2660846-1.html
- ^ a b Mass Affluent Investors Appear at Significant Risk Should Real Estate Bubble Burst, Spectrum Group
- ^ "US Federal Reserve, Wealth in the US" (PDF). Retrieved 2006-08-11.
Further reading
edit- Nunes, Paul, and Brian Johnson. Mass Affluence: Seven New Rules of Marketing to Today's Consumer, Harvard Business School Press. 2004.
- Silverstein, Michael J., and Neil Fiske. Trading Up: Why Consumers Want New Luxury Goods— and How Companies Create Them, Portfolio. 2004.
External links
edit- Here Come the Mass Affluent, CNN/Money
- You're Not Rich, but Now You Can Fake It, Slate
- Wealth Management: The Race to Serve the Mass Affluent, FinanceTech
- MasterCard Analysis of Mass-Affluent Consumers Reveals Importance of Customization, PaymentsNews
- Attracting the mass-affluent, business.scotsman.com
- Chasing the Mass Affluent Customers
- Mass Affluence: Seven New Rules for Marketing to Today's Customer
- Luxury goes mass market, Fortune
- A $400 Coach bag? Shoppers think twice, Fortune