SINGAPORE: A recent study conducted by wealth management firm St James Place (SJP) Asia has found that a significant number of Singaporeans do not consider themselves financially wealthy.
The study, titled “Accelerating the Wealth Journey – From Stability to Abundance,” surveyed 1,000 affluent Singaporeans across various levels of wealth and shed light on the financial insecurities experienced by many Singaporeans, highlighting the need for greater financial literacy and planning to ensure long-term financial well-being.
According to the findings, 55 per cent of respondents stated they did not perceive themselves as financially wealthy. The study categorized respondents into five levels of wealth: financial stability, financial security, financial flexibility, financial freedom, and financial abundance.
It revealed that transitioning from one wealth level to the next took increasingly longer periods, with an average of 32.3 years to move from financial stability to abundance.
The study also highlighted that only 38 per cent of Singaporeans were content with their current level of wealth.
In contrast, 42 per cent expressed a desire for greater wealth, while 19 per cent believed they were already too wealthy. Notably, individuals tended to feel they had insufficient wealth until they reached financial freedom, and at the point of abundance, many felt they had accumulated too much wealth.
When it comes to prioritizing wealth accumulation, the majority of respondents (53 per cent) expressed a willingness to sacrifice spending on luxury items in favour of long-term wealth generation. This was followed by prioritizing work-life balance (51%) and family time (42%).
Interestingly, the study revealed that individuals with higher levels of wealth were more inclined to advocate for making sacrifices in other areas of life to achieve their financial goals. For example, 76 per cent of those categorized as financially abundant believed in sacrificing work-life balance compared to respondents from lower levels of wealth.
Among the drivers for wealth building, financial security emerged as the top priority for Singaporeans (67 per cent), closely followed by achieving a good personal lifestyle (61%), providing for their families (57 per cent), and intergenerational wealth creation (46 per cent).
The survey also indicated that 86 per cent of Singaporeans considered it important for the next generation to protect and grow their wealth.
However, opinions were divided regarding when intergenerational wealth transfer should occur, with 39 per cent believing it should begin when a family member retires and 30 per cent suggesting it should happen after the death of a family member.
Regarding financial literacy, the study found that 76% of Singaporeans believed improving their financial knowledge would contribute to increased wealth. However, only 45 per cent of respondents had a formal will in place, and half of them either lacked or did not believe in having a wealth transfer plan.
SJP Asia’s partnership director Oliver Wickham acknowledged the rising concerns about protecting savings in the face of inflation and emphasized the importance of long-term objectives and prudent decision-making in navigating uncertain economic times while scaling the wealth ladder.