If you want to be considered wealthy in Luxembourg, you’ll need to earn an annual gross income of at least 365,000 euro. According to a recent survey, that’s the magic number that Luxembourg residents believe separates the wealthy from the rest.
Interestingly, men think you need to bring in 400,000 euro a year to be wealthy, while women are a bit more modest, pegging the figure at 300,000 euro.
These numbers come from a survey among 1,641 residents and reflect Luxembourg’s status as Europe’s wealthiest nation by GDP per capita. In 2022, Luxembourg had a GDP per capita of 120,200 euro, up from 91,424 euro a decade earlier. This dwarfs the Euro area average of 39,644 euro.
The survey, conducted by Swissquote Bank Europe and Luxembourg market research firm Ilres, also highlighted significant income disparities. For instance, the wealth benchmark is more than four times the median annual salary in Niederanven, the nation’s richest municipality.
‘Taboo subject’
“Our wealth survey challenges established notions of wealth by gathering insights and opinions directly from Luxembourg residents,” said Jeremy Lauret, head of direct investing at Swissquote, in a statement.
“For many, discussing wealth remains a taboo subject. Luxembourg is Europe’s wealthiest nation measured by GDP per capita, and a significant financial hub. Yet little is known about how everyday Luxembourg residents perceive wealth and make decisions that impact their financial position.”
Financially secure
What does it mean to be «financially secure»? According to respondents, you need to earn at least 165,000 euro annually. Financial security means having enough money to cover expenses, emergencies, and retirement without fear of running out. It’s not just about having a big bank account; it’s about peace of mind.
The survey also delved into how residents view wealth generation. Swissquote clients, known for their investment in financial markets, reported feeling wealthier, with 48 percent saying their financial position had improved over the past year, compared to just 17 percent of other respondents. This clearly underscores the benefits of active wealth management and investment.
So, how do Luxembourg residents grow their wealth? Buying property and investing in financial markets top the list. A whopping 62 percent of respondents believe investing in real estate is the best way to grow wealth, despite rising mortgage rates. Another 62 percent favour investing in the stock market. Surprisingly, 42 percent still see value in putting money in a savings account.
Inflation seen as main threat
However, it’s not all sunshine and rainbows. The survey identifies several threats to personal wealth, with inflation topping the list, cited by 58 percent of respondents. This is followed by fears of international conflict (54 percent), a recession, and rising interest rates, particularly among those aged 27 to 42.
The findings suggest a shift towards a more holistic understanding of wealth. Quality of life is paramount, with many residents prioritising health and personal freedom over mere financial gain. A substantial 74 percent equate wealth with the freedom and flexibility to pursue personal interests, and 62 percent link it to good health and well-being. Only 25 percent associate wealth with financial assets or large bank balances.