Money can't buy love, happiness or, as it turns out, financial freedom, according to millionaires who no longer feel like they're rich.
What's more, the wealthy are reaching record-high levels of pessimism and are becoming more risk-averse and "confused" as they reconfigure their portfolios, according to two recent surveys of the well-heeled. And at a time when consumer spending couldn't be more important to rebuilding a broken economy, those with means are tightening their purse strings.
"They all recognize that they are wealthy on a relative basis to the rest of the population," said Michael Durbin, the president of Fidelity Institutional Wealth Services. "But when asked, 'You're a millionaire; do you feel wealthy?' almost half of the respondents would say, no, they don't feel wealthy."
An average household wealth of $3.5 million in investable assets and $306,000 in annual income was not enough for some 46% of the more than 1,000 millionaires Fidelity polled to feel comfortable with their financial positions. As a result, they're spending less and there's a lot of "recalibration" going on, Durbin said -- of their lifestyles and investment decisions.
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Meanwhile, the Phoenix Wealth Survey, conducted by Harris Interactive, found that high-net-worth people's view of their financial security has flipped in recent years. In 2007, more than four out of five surveyed said they felt wealthier than they did in 2006. This year, a whopping 74% said the opposite, feeling less wealthy this year than last.
"The continuing economic turmoil has stripped America's millionaires of their confidence and sense of security," said Walter Zultowski, the senior vice president of research and concept development at Phoenix. "They are feeling far worse off than they did during the last economic downturn in 2003."
The Phoenix survey, in its 10th year, also found that 30% of the more than 1,700 people responding were downbeat, six times the 5% who felt that way in 2000.
Fidelity's wealth meter plunged to a minus 91, using a scale where 100 represents the most favorable outlook for the economy and minus 100 the most negative. Last year, that stood at minus 50.
Like most Americans invested in the stock market or funds tied to the markets, millionaires have suffered from the sharp drop in equities. Millionaires who spoke to Fidelity reported a 19% drop in investable assets. That's right in line with the drop Microsoft founder Bill Gates recently reported in the assets of his charitable unit, the Bill and Melinda Gates Foundation. (Microsoft is the publisher of MSN Money.)
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Nearly 77% told Fidelity that this economic environment is the worst they've ever seen -- and 78% of them lived through the 1973 oil crisis, 11% through the 1953 recession and 3% through the Great Depression.
"The stock market decline is weighing the most on their sense of and realism of loss of wealth," Durbin said.
Continued: Treading cautiously
