More than half, or 55% of Singaporeans do not consider themselves to be financially wealthy, according to a study by wealth management firm St James Place (SJP) Asia.
The study, titled “Accelerating the Wealth Journey - From Stability to Abundance” surveyed 1,000 affluent Singaporeans categorised across five different levels of wealth — namely financial stability, financial security, financial flexibility, financial freedom and financial abundance. It also looks at how they approach areas such as wealth creation and intergenerational wealth transfer.
Across the five different levels of wealth, the study finds that moving from each wealth level to the next takes progressively longer, with the average length of time to move from financial stability to abundance taking 32.3 years.
Overall, only 38% of Singaporeans are happy with their level of wealth, with 42% saying they would like to be wealthier while 19% believe they are too wealthy.
The study finds that from the stages of financial stability to financial flexibility, most will continue to believe they have too little wealth. They will only believe they have sufficient wealth when they attain financial freedom. At the point of reaching abundance, most will believe that they have accumulated too much wealth.
The majority (53%) of those surveyed said they would be willing to sacrifice spending on luxury items to generate more wealth over the long term, followed by work-life balance (51%) and family time (42%).
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The survey also reveals that the wealthier the individual, the more likely they are to advocate for sacrificing in other areas of their lives to attain goals. For instance, 76% of those who are financially abundant believe in making sacrifices in work-life balance compared to those from other levels of wealth.
Financial security top driver to wealth building
Of those surveyed, 26% believe that patience in investments is the most important aspect for growing and maintaining wealth over the long term, followed by a disciplined investment approach (24%) and financial literacy (22%). Over three quarters (76%) of Singaporeans believe that they would be more financially wealthy if they were more financially literate.
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Across the board, the thought of losing wealth makes 92% of Singaporeans anxious. However, the level and frequency of anxiety decreases with each level of wealth. This increases again when the individual becomes financially abundant, as 60% of them said they constantly feel anxious at the thought of losing wealth.
Financial security and protection is one of the top drivers (67%) for Singaporeans when it comes to building their wealth. This is closely followed by having a good personal lifestyle (61%), providing a good life for their family (57%) and intergenerational wealth creation (46%).
It is important for as many as 86% of Singaporeans that the next generation protects and grows their wealth. However, they remain split in terms of when they believe intergenerational wealth transfer should take place. The largest portion believe this should begin when a family member has retired (39%) followed by when a family member is deceased (30%).
Half of Singaporeans do not have or do not believe in having a wealth transfer plan, with only 29% who have already started transferring wealth to the next generation. In fact, less than half of Singaporeans (45%) have a formal will in place, a slight dip from last year at 47%.
“Amid ongoing challenges of inflation, we recognise the rising concerns when it comes to protecting one’s hard-earned savings. Despite these economic headwinds, there are still opportunities for investors to successfully navigate through inflationary times as well as protect and grow their wealth,” says SJP Asia partnership director Oliver Wickham.
“With a focus on long-term objectives and prudent decision-making, scaling the wealth ladder and progressing to the next level of wealth is not impossible even during uncertain times,” he adds.
